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Hottest Video Games for 2010 Holiday

Stocks in this article: SNE MSFT ATVI

BOSTON ( TheStreet) -- Video-game companies are rolling out the big guns this holiday season with more motion-controller peripherals and blockbuster titles, as they aim to boost flagging sales.

Retail sales of video-game hardware, content and accessories posted the worst August performance since 2006, according to NPD Group research data. It was the fifth month in a row showing a decline. Video-game sales fell 10% in August from a year earlier to $819 million. Hardware sales slumped 5% to $283 million.

Game companies must accept some of the blame by failing to capitalize on the online multiplayer experience, says Michael Pachter, an analyst at Wedbush Morgan. As sales have dropped, share prices have followed. THQ (THQI) has tumbled 29% this year, Electronic Arts (ERTS) has fallen 8% and Take-Two Interactive (TTWO) has slipped 4%. Activision (ATVI) has declined the least, by 2.8%.

"There are so many people playing multiplayer for free, so they're buying fewer games," Pachter says. "People are sucking up hundreds of hours per week and are satisfied with the multiplayer component of games. They're not compelled to go out and buy new games. You can't have nearly 25 million players logging hundreds of hours online for free without charging for it. There's plenty of potential revenue opportunities."

Video-game-console makers are hoping to turn things around with new accessories, the first of which is set for sale today. Sony's (SNE) PlayStation Move controller will debut almost two months ahead of Microsoft's (MSFT) Kinect motion controller for the Xbox 360 console. With the introduction of the Kinect and Move, there's a slim chance overall industry sales will improve on last year's performance. In the first eight months of the year, video-game sales slumped 8% from a year earlier, with hardware sales down 12%, according to NPD's research.

"Factoring in seasonality and taking into account some of the incredible games and accessories (e.g., Move and Kinect) that are coming out during the remainder of the year, new physical retail video game sales are likely to land in the range of $18.6 to $20 billion for the year," NPD analyst Anita Frazier wrote in an email. That would compare to sales of about $19.6 billion last year.

TheStreet narrowed down the list of important video-game releases to watch for the rest of 2010, leading up to the busy holiday shopping season. Read on to see the games predicted to have a strong selling performance, sorted by North American release date.

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