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The 'Halo' effect -- Stock Watch

Filed under: Video Game Business | Xbox 360
Posted by Jeremy on September 19, 2007 3:39 PM
Comments (0) |

I've assembled an interesting video and a few articles which delve into how you can make money off of the halo effect of, well, Halo 3.

Depending on who you believe, Halo 3 will pull in anywhere from $500 million to $1 billion between game sales and console sales.

Here are the video/articles, and below, my analysis:

Cramer video on Halo 3...be warned you have to watch a 60 second Viagara ad.

Halo 3: T-Minus Two Weeks

GameStop takes aim at casual gamers

Although it's tempting, I wouldn't invest in Microsoft in the short term because, even though the Halo 3 numbers look huge, they are a mere drop in the bucket for MSFT in general. If you're going for the long term, I think there are better, more growth-oriented (and still safe) stocks out there, even in the technology field...say Intel (INTC) for example.

Continue reading...

Continue Article ↓




The consensus between everything that I've read, and I agree with it, is to put your money in Gamestop (GME). They still have a lot of room to grow, don't have any competition to speak of, and have solid financials. Whether or not you want to sell right after the holiday season or hold onto it for the long term is up to you, but either way, I think you're going to make money.

Due to this crazy gaming hype which Halo 3 will generate, gaming, in general, will have a high profile in the coming months, meaning a lot of people who don't know what they're doing are going to be jumping into the gaming sector with you. Be wary of these people as they'll pull their money out at the first sign of weakness.

To prevent this, don't invest in the risky almost-penny stocks like Atari. Instead, focus on the titans like Electronic Arts (ERTS), Ubisoft (UBI), and Nintendo (NTDOY).

A lot of analysts are liking Activision (ATVI) these days. I don't. Everybody is banking on Guitar Hero 3 being a huge hit, and it will, but not the big hit that analysts are expecting.

EA's Rock Band is going to cut into Guitar Hero's fortunes and Activision's other two huge franchises, Tony Hawk (old and tired) and Call of Duty, just aren't going to sell up to expectations.

Going a bit outside of the niche video game sector, I do think that Wal-Mart (WMT) and Best Buy (BBY) will both benefit from the video game season, particularly in the high-margin peripheral sector.

Lastly, you may want to take another look at Sony (SNE). Yes, the PS3 didn't meet expectations but that doesn't mean it isn't a bad ass piece of hardware that will eventually catch on.

Sony is also in the unique position of being able to sell the HDTVs that many people will be upgrading to this holiday season (TVs typically sell best through Super Bowl Sunday, so you may want to buy and hold until those sales numbers come in).

So there you have it. Buy into Gamestop the next time it goes down a bit, buy a little EA, and check out Nintendo, Ubisoft, and Sony.

***Disclaimer*** Lunabean takes no responsibility for their stock recommendations and they make no guarantees. Please do your due diligence before purchasing any stocks.






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