This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Game On For Video Game Stocks

Stocks in this article: ATVI EA MSFT

NEW YORK ( TheStreet -- It will soon be game on for the game companies.

Activision (ATVI) and Electronic Arts (EA) have both seen the stock prices rise recently, but every summer these stocks pull back. That's when investors, who haven't gotten into the game, should consider getting into these stocks. Especially this year because the holiday season is shaping up to be a huge one.

First, the pull back. Each summer over the past five years, these stocks experience a period of selling during June. June is typically a bad month for tech stocks. Even in positive years the SPDR XLK sees some selling in mid-June. Activision stock has run up 42% year-to-date chasing away lots of fresh cash. However, the company recently reported its earnings and analysts were spooked by the drop in Warcraft subscribers and so it sold off 6%. The company was also cautious about the upcoming console cycle and gave general market warnings. This has primed the pump for some selling in early June.

Electronic Arts has stumbled along for most of the year until moving higher after recently reporting its earnings. Unlike Activision's disappointment, EA beat estimates and guided higher causing the stock to pop. The company reached those numbers by cutting costs after a year that saw the company's CEO leave. EA also seems to be cautious about the new consoles. The stock has not recovered from its 2011 highs of mid $20's, but it is up 27.5% over the past month. So both the stocks have moved, but that doesn't mean new money can't still get in. The key on both of these names is to wait for the June selling period.

While both have been cautious about the new consoles, the excitement and anticipation for the consoles is building. This is the second piece to this investment decision. Microsoft's (MSFT) Xbox is long overdue for an upgrade. The new version is rumored to be called the 720 or the Infinity and is going to be revealed on May 21 in Washington. Typically, these consoles will have a pre-order period and start selling in time for the holidays, usually hitting the market in October or November. It is expected to be faster and have better graphics and there is a rumor that Skype will be incorporated. This would make sense since much of Xbox Live already has an audio capability; why not add an on-camera feature? Xbox is already the top selling console in the U.S. every month even though users know a new unit is coming out later this year. Microsoft still shipped 8.9 million units during the first 9 months of fiscal 2013 and revenue increased 55% last quarter for Xbox to $641 million.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs