Roger McNamee Says the Consumer Tech Will Remain King in 2003

3. The video-game makers have had a decent run. Do you see consumer demand holding up?

I think the video-game industry is going to be surprisingly strong in 2003. Wall Street is of the view that the industry is peaking for this cycle. I think there's at least a reasonable chance that it will take another year or two before it peaks. Those who sell software into that market, companies like Electronic Arts(ERTS), will have something to look forward to.

I don't know for a fact that it will be a great year. I just think there's a reasonable chance that conventional wisdom is wrong on this cycle. If you ask my why, I would say that two of the three vendors of equipment are moving to a PC-like model of compatibility from one generation to the next. Quite frankly, they're not going to be ready to ship new hardware in 2004. I think there's a really good chance that customers will continue to buy really cool software because these platforms are really capable.

Plus, the demographics have gotten so broad on video games that I just don't see the market rolling over.

4. You did well in 2002 by sticking to the consumer side of technology. What do you like in the consumer arena and what do you expect going forward?

We had a surprisingly good year in 2002 and we couldn't have done it without the consumer.

We still own a ton of consumer stuff. We had a bunch of things that you don't consider consumer companies that made a ton of money from selling to companies. Like Symantec(SYMC) and CheckFree(CKFR), which turned out to be a great investment in 2002. Expedia(EXPD) and Hotels.com(ROOM), those were big stocks relative to the market.

You still own all those stocks?

I think we own all those things. We still own Take-Two Interactive(TTWO) -- a lot less than we used to, but we still own it. We don't own EA anymore; it hit our price point. But I'll tell you, we keep looking at it because the stock came down.

And EA's a great company, and if I'm right about the cycle being longer, that'll probably be a great stock.

What do you make of this notion that EA is the Disney(DIS) of the 21st century?

People are always putting names on those things. Why can't they just be EA? This is one of the greatest software companies ever created -- I'm biased because I'm a venture investor there. EA and Intuit(INTU) are two companies I've been associated with that I'm unbelievably proud of. When I made both investments, people hated consumer stocks.

But these companies are living proof that mark what people who work hard can do. Technology is not overnight success. It's about doing it every day for years and years.