Activision Blizzard, Inc. (NASDAQ:ATVI) also did well by teaming up with Bungie, the creators of Halo, to announce a game called Destiny. This new game takes elements from Halo, like map creation and sci-fi shooting, and mixes them with Call of Duty-like battle scenes and Skylanders type creativity to merge two of Activision Blizzard, Inc. (NASDAQ:ATVI)’s best offerings. Given Bungie’s reputation, this is sure to go over well with gamers and will also give investors good reasons to invest in Activision Blizzard for the long haul.
Most likely to rake in the coin like Super Mario: GameStop Corp. (NYSE:GME)
So maybe GameStop Corp. (NYSE:GME) didn’t actually have a massive show presence at E3, but the store franchise was going to come out a winner no matter how the winds blew. When the last generation of consoles came out, GameStop’s stock tripled in value over the next three years, going from $8 per share to almost $23 per share. This is in large part due to it being one of the few store franchises that can effectively compete with online retailers like Amazon and eBay because its employees provide the knowledge and the industry experience that the online-only retailers can’t provide.
Additionally, GameStop will see its used game trade-in service succeed into the next generation thanks to Sony Corporation (ADR) (NYSE:SNE)’s promotion of easy game-sharing, something that had appeared doubtful with the new consoles. Given the sequels to Call of Duty, EA’s Battlefield, and EA’s Madden series set to be released this fall, customers looking for a price reduction on the $60+ new releases still have the option of trading in used games for store credit, a big part in GameStop’s business. These used games can then be resold, helping those that want to get in to the hot franchises without breaking the bank.
GameStop also offers unique tips and cheats for a lot of major games, such as special armor and weapons, that are only unlocked if a game is purchased through them, which actually provides incentive for gamers serious about upping their Gamerscores by gaining as many advantages as possible. This shows that GameStop knows its audience, and if past history is any guide, the stock will be a great long-term investment, especially with an improving economy helping sales.
The foolish gamer’s bottom line
Each of these three winners scored big with the industry experts. On the investment side, the companies are very cheap considering where these stocks may be heading later this year and into 2014. With an average forward price-to-earnings ratio of around 13 spread across the three companies, it’s a good value for money. Yes, GameStop has a -3.29% profit margin and Sony’s margins are perilously close to 0%, but that’s what creates the potential for huge growth across the video game sector.
A dormant decade may not have been great for these guys, but the next few years are going to make a lot of gamers and investors alike very happy…like 30-kill streak and airstrike riding top-of-the-leaderboard, Skype-taunting happy.
John McKenna has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard and GameStop.
The article Showdown at E3: Part III — Who Was Top of the Leaderboard? originally appeared on Fool.com.
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