Activision Blizzard, Inc. (ATVI), Take-Two Interactive Software, Inc. (TTWO): A Video Game Lull Until the Holidays

After shrinking your position in Activision Blizzard, consider Take-Two Interactive Software, Inc. (NASDAQ:TTWO). It will probably have the final big release of this console generation, though Call of Duty: Ghosts will be on both generations. The omnipresence of Ghosts will probably increase the cost of the game, because the next generation won’t be compatible with the previous one. That means the game needs to be ported to all the other systems.

GTA V is only planned on the current generation. I would buy Take-Two Interactive Software, Inc. (NASDAQ:TTWO) on any dips between now and the release of GTA V, then I would sell into any hype. That seems pretty short-term, but until we are a few months into the next generation, I would not want to hold anything other than a smaller position in Activision Blizzard. It has a 1.30% dividend yield, which is small but something in return for patience.

I think it will be successful but over the few months after release. I think it is safe to say it will be third behind GTA V and Call of Duty, but might have a lot more revenue potential over the longer-term. I still do not think it is time to take a position in Electronic Arts Inc. (NASDAQ:EA). I just cannot get a sense of the blockbuster game that will really drive it.

Conclusion

The most recent earnings calls for all three companies were incredibly boring, because there just is not much to discuss. The next few months are likely to stay fairly quiet. This is a good time to re-balance some positions. Activision Blizzard is worth lightening up on to lock in some gains. If the company ever heads down into the $12s then it might be worth buying more, but its lack of diversity in titles makes it riskier than its numbers would suggest.

November is the next landmark for the company, unless Hearthstone becomes immensely popular. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) has the spotlight among video game publishers, because GTA V should be huge though lack of next-gen support might hurt it.

Nihar Patel has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard and Take-Two Interactive . The Motley Fool owns shares of Activision Blizzard. Nihar is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article A Video Game Lull Until the Holidays originally appeared on Fool.com is written by Nihar Patel.

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