"What I like about it is it shows that Take-Two, which was a company that was really on the cutting edge of developing games for the older gamers, recognizes that the underfollowed and underappreciated niche is now the undergamer," Spiegel added. "Undergamers," or younger gamers, become more important because with the video game console market maturing, they can now afford to buy consoles and games. Including the distribution agreement with TDK, Take-Two raised its guidance for the fiscal year ending Oct. 31 to $2.30 a share in earnings on $1.015 billion in revenue. Analysts were projecting Take-Two would earn $2.29 a share on $984.6 million in revenue in fiscal year 2003. The company also offered initial guidance for fiscal year 2004, assuming the TDK acquisition will add about $35 million in sales but have no material effect on net income. Take-Two projects 2004 earnings will come in at $2.68 a share on $1.18 billion in revenue. That's significantly higher than the consensus estimate of $2.48 a share on revenue of $1.05 billion for fiscal year 2004. For the historically strong first quarter 2004 ended Jan. 31, Take-Two expects earnings of $1.21 a share on $412 million in revenue. Analysts were expecting higher earnings -- at $1.27 a share -- on revenue of $402.6 million in the first quarter 2004. Meanwhile, in other video game industry news, the largest video game maker, Electronic Arts ( ERTS), was downgraded Wednesday to hold from buy by Wedbush Morgan Securities analyst Michael Pachter, who said the stock is currently fairly valued. Pachter noted that the stock has appreciated 23.4% since mid-June and 72% in the past six months to close Tuesday at an all-time high of $91. Although he believes the company has the deepest portfolio in the industry and will gain market share in the next year, Pachter cautioned that he no longer feels there is room for significant price appreciation over the next six months.