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Quick Hits: Get Into Gaming With Activision

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Brief scrutiny of today's headlines.

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Video game stocks are gaining steam. We all saw what Take-Two (TTWO) did this week with Grand Theft Auto IV, and Activision (ATVI) just joined the party with a huge earnings report off of sales of its flagship titles Call of Duty and Guitar Hero.

It was interesting to see a gaming stock jump on sales data (a sign of things to come), but what's apparent is that more people are buying more games. With a solid pipeline of titles, Activision is poised for growth. It's these games that keep the expanding gamer demographic buying consoles like Microsoft's (MSFT) Xbox, Nintendo's (NTDOY) Wii and Sony's (SNE) Play Station 3.

Some risk is inherent as results like this add pressure to sustain momentum, but with the above titles and others, Activision is able to service both the hardcore and casual gaming demographic - and keep serving them yearly.

When you look at the amount of music that's already poured into the Guitar Hero franchise, coupled with scores of tracks that can be leveraged via the Vivendi clan, you have a franchise with legs that can run for miles.

With over ten million gamers online, downloadable content is emerging as the go-to method for getting consumers to continue to spend on franchises after the initial $60 purchase. Activision is all over this strategy with new songs, artists, game maps and other add-ons for each title.

More eyeballs also makes for more advertising opportunity...Todd Harrison has more on this in his latest from Yahoo Tech Ticker.

Consider all this, plus the fact that the stock has remained a rock through this tape, and you have a good player to dive into the gaming universe.

Position in TTWO
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