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Xbox One and PS4: New Consoles Are Nice, but New Gamers Would Be Even Better


Microsoft and Sony need to grow the population of gamers, and their new consoles are not equipped to do so.

For investors, the video game sector has been mostly full of doldrums since late 2007/early 2008.

During those glory days, consumers were carpet-bombed with an astonishing quantity of high-quality titles that spanned from the super hardcore to the truly casual. Among the stars of the day were Activision's (NASDAQ:ATVI) generation-defining Call of Duty 4: Modern Warfare and its Guitar Hero series, Microsoft's (NASDAQ:MSFT) Halo 3, and of course, we can't forget the Nintendo (OTCMKTS:NTDOY) Wii, which was a blockbuster commercial success at the time.

We've seen individual gaming stocks have their ups and downs since then (lately, mostly ups), but only one (Activision) has come even remotely close to exceeding its past highs, courtesy of the staying power of the Call of Duty series:

Now, let's go chart by chart with the rest of the industry's stocks, along with some brief history that will nicely lead us into today's topic of discussion: the Microsoft Xbox One and Sony (NYSE:SNE) Playstation 4.

Electronics Arts (NASDAQ:EA) was down for the entirety of the last cycle as it was outgunned in shooters by the aforementioned Activision(serious overvaluation was also an issue):

GameStop (NYSE:GME) peaked during the aforementioned glory days, just as the financial system was falling apart:

Same for Nintendo, which was riding high on the booming Wii, as well as the DS handheld, which was a monster in its own right:

THQ (NASDAQ:THQIQ) once rode high on the success of its video game adaptation of Pixar's (NYSE:DIS) Cars, as well as hardcore titles like Saints Row and Company of Heroes, but recently filed for bankruptcy:

Sony was once the 900-pound gorilla of the industry, but the success of the Microsoft Xbox 360 and Nintendo Wii resulted in market share destruction for the Playstation franchise, which was once Sony's primary profit generator.

Last but not least, there's Take-Two Interactive (NASDAQ:TTWO), which has had some serious ups and downs over the years courtesy of an erratically-timed lineup of absolutely brilliant games (such as the Grand Theft Auto and BioShock series), and a failed 2008 bid for the company from EA.

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