New Game Makes THQ a Winner

As my readers know, one of my most active research interests is video-game stocks. Despite a fairly hefty flow of information from the industry, it often seems that analysts are a step behind the buzz, which creates opportunities for investors. So, I'm going to dial in on one upcoming title that I believe has the potential to make investors money.

One genre that has truly emerged as a monster in recent years has been the PC real-time-strategy (RTS) category. For those who are not familiar, RTS games are essentially highly complex war simulations. Notable recent RTS series include Electronic Arts' (ERTS - commentary - Cramer's Take) Command and Conquer, Microsoft's (MSFT - commentary - Cramer's Take) Age of Empires and THQ's (THQI - commentary - Cramer's Take) Company of Heroes, a game that ties into today's topic. But first, a step back in time.

In 1997, a groundbreaking RTS game called Total Annihilation was released to enormous critical acclaim. Despite its age, it is still played actively today. The development of Total Annihilation was led by game designer Chris Taylor. And now Taylor, working with game developer Gas Powered Games, is about to unleash a new RTS title called Supreme Commander, which I expect to be a big hit. So how do you make money from Supreme Commander? The answer lies with THQ, a stock I have been recommending in the Breakout Stocks newsletter since early September, and which will be the publisher of Supreme Commander.

As I have told my subscribers over the past month or so, Supreme Commander, owing to its heritage, is getting significant buzz within the PC-gaming world. Outside of its lineage, which is likely to draw in many a Total Annihilation fan, Supreme Commander is a fairly innovative title from a technical standpoint.

It utilizes Microsoft's (MSFT - commentary - Cramer's Take) new DirectX 10 API (meaning it supports the newest graphics technologies), can support dual monitors and was designed from the ground up to take advantage of the latest multicore processors from Intel (INTC - commentary - Cramer's Take) and Advanced Micro Devices (AMD - commentary - Cramer's Take). As a result, the game easily stands out from the RTS crowd.

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In keeping with TSC's editorial policy, Michael Comeau doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Comeau is a research analyst at TheStreet.com. In this role he performs stock analysis for TheStreet.com Breakout Stocks, and is also a regular contributor to RealMoney.com. Prior to his arrival at TSC in June 2004, Comeau worked as a Consultant to Toyota Motor North America, performing in-depth research on automotive industry issues, primarily in the areas of alternative engine technologies, competitive analysis and macroeconomics. His primary market interests include consumer technology, specialty retail, and small-caps. Comeau received a bachelor's degree in Finance from Brooklyn College, and has completed Level 1 of the CFA program.. He appreciates your feedback; click here to send him an emai