This column was originally published on RealMoney on Nov. 22 at 11:22 a.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

Things are starting to look up for

Microsoft's

(MSFT) - Get Report

Xbox 360 console, which hadn't exactly been

flying off the shelves.

Today, Microsoft

announced that its new action game "Gears of War" has become the best-selling Xbox 360 game of all time, moving more than 1 million copies worldwide despite being on the shelves for only about two weeks. In addition, Microsoft said that registrations per day for the company's Xbox Live gaming service have increased by more than 50% since the game was released.

But even more importantly, leading video-game retailer

GameStop

(GME) - Get Report

, on which

I've been very bullish in the Breakout Stocks newsletter since mid-July, commented on its third-quarter conference call that the release of "Gears of War" has resulted in a significant increase in Xbox 360 sales. This is a very important data point, as it indicates that gamers have been looking for a reason to buy the Xbox 360, and now they have one. This also benefits software makers like

Electronic Arts

(ERTS)

, as the Xbox 360 audience should increase in size nicely over the next few months.

Of course, this is yet another negative for

Sony

(SNE) - Get Report

, which I believe made a

bad decision by including the Blu-ray DVD format in the PlayStation 3. Blu-ray component shortages are limiting PlayStation 3 supplies, giving

Nintendo

a lot of room to gain market share in the key Japan market with its new Wii.

While I've never hesitated to criticize Microsoft, I have to commend its Xbox 360 strategy, which includes an emphasis on online play and interactivity. However, I think it should get even more aggressive here. Even though an uptick in Xbox 360 sales may reduce the need for a price cut, I think it should do one anyway to crank up the heat on Sony.

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;

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