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Game Consoles Dead? Not So Fast, Analyst Says

Althea Chang
Big Data Download
Game Consoles Dead? Not So Fast, Analyst Says

Even as smart phones and tablets allow gamers to play their favorite titles on the go, console gaming is far from dead, according to one analyst, with the new XBox One and PlayStation 4 consoles set for release later this year.

"There was question of whether people would be interested in the new consoles, but I think coming out of E3, that question has been...answered pretty positively," said Doug Creutz, video game analyst at Cowen & Company, who notes that the new PlayStation (SNE) has had better reception than the new Xbox (MSFT), and had an especially good week at E3.

Game developer stocks including Electronic Arts (EA), Activision (ATVI) and Take Two Interactive Software (TTWO) could be solid investments in the next few years, Creutz said.

"If you've got good confidence you're going to have a robust hardware cycle which will drive growth in software sales, less this year but more in 2014 and 2015 and 2016, then you can invest in those stocks feeling pretty good about their prospects for growth over the next several years," Creutz said.

He said familiar names like Activision's “Call of Duty,” Ubisoft's “Assassin's Creed,” and “Battlefield” from Electronic Arts are expected to do well. But new games being released specifically for the new consoles bode well for both game developers and console makers, Creutz said.

Disclosure: Creutz does not own shares of the companies mentioned in this post.

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