Looking for a Christmas Halo
Enviado: 16/11/2004 10:53Looking for a Christmas Halo
Commentary: Gaming opportunities are in season
By David Nassar
Last Update: 12:01 AM ET Nov. 16, 2004
Editor's note: David Nassar is chairman and chief executive of MarketWise.com.
BOULDER, Colo. (CBS.MW) -- A halo is defined as a radiant light drawn around the head of a saint.
These days, however, when the word halo is mentioned, most people think first of the highly-anticipated release for the Microsoft Xbox gaming system -- Halo 2 -- and its potential impact on companies' bottom lines.
Microsoft's best-selling Xbox game, Halo, is an action-shooter game with vehicular combat elements where you play a trooper thrust into a hostile alien world. A popular option is to play online with other gamers; incorporating team strategies online or on a local area network (LAN).
Microsoft loses money on every Xbox console it sells. But first-day sales for Halo 2 toped $125 million in North America when it was released last week. That makes it the fastest-selling media product in the United States ever. In fact, in just one day consumers spent more of their dollars on this game than they have on any movie. Halo 2 was able to attain this remarkable accomplishment in part by pre-selling 1.5 million copies of the game at roughly $50 each. Halo 2 is currently available in eight languages and 27 countries and I believe that with the upcoming Christmas season and the release of several other highly anticipated games, there are other companies in this space worth paying attention to for potential investments.
Though HALO 2 was designed for Microsoft's Xbox gaming system, the unprecedented success of its launch drives home the fact that the video game and accessory makers should not be ignored.
For example, there is another highly anticipated sequel this week by privately owned Valve Software, for PC called Half-Life II.
With each new high profile release, the video game industry is brought back into the spotlight which entices investors to put their money into companies that participate in successful launches. It is important to note that many of these new games require high-end accessories to properly run on PCs. This creates a demand not only for companies that make the games and gaming systems but also for companies that make high end products to enhance existing systems.
One of the easiest and most effective performance enhancing accessories for PC's are high-end video cards. A high-end video card is a necessity for the avid PC gamer who wants to maximize their experience with these advanced new games.
There are several companies that are poised to benefit from the sale of games, game systems, and PC accessories. In particular I like Microsoft (MSFT: news, chart, profile), Nvidia Corp. (NVDA: news, chart, profile) and ATI Technologies (ATYT: news, chart, profile). The latter two companies make high-end video cards required by many top shelf games, and some advanced graphics cards cost in excess of $500.
The fundamental picture on Microsoft is bright with solid earnings and revenues, but the strength in the stock last week has excited technical traders who have definitely noticed that the stock briefly broke above the $30 level to areas not seen since March of 2001. On Monday the stock opened at $27.35 due to the expiration of a $3.08 dividend privilege for holders of the stock. Though this throws a bit of a wrench in the technical picture, the stock appears attractive going into the end of the year.
Nvidia Corp., is another stock with an improving fundamental picture, beating the analysis earnings estimates by 6 cents a share last quarter with an associated increase in revenues of 6.1 percent. Shares of Nvidia endured a sell-off toward the middle of this year, but since August the stock has been trending steadily higher. Upon the release of last quarter's earnings, the stock gapped higher and since has been holding that gap well. Look to buy this stock on a pullback near $18.
ATI technologies (ATYT), is another graphics company that has solid fundamentals and is currently making new multi-year highs. This stock should be bought on a pullback toward the $19 level.
The video gaming industry has proven itself to be a market segment filled with consumers willing to pour their dollars into the newest and best games. Keep in mind that some analysts predict that 50 percent of the yearly revenues of video games companies occur in December alone. As a trader it is wise to be in a position to profit from the companies that benefit from the activity of this market segment going into Christmas season.
David Nassar does not own any of the stocks mentioned in this column
Commentary: Gaming opportunities are in season
By David Nassar
Last Update: 12:01 AM ET Nov. 16, 2004
Editor's note: David Nassar is chairman and chief executive of MarketWise.com.
BOULDER, Colo. (CBS.MW) -- A halo is defined as a radiant light drawn around the head of a saint.
These days, however, when the word halo is mentioned, most people think first of the highly-anticipated release for the Microsoft Xbox gaming system -- Halo 2 -- and its potential impact on companies' bottom lines.
Microsoft's best-selling Xbox game, Halo, is an action-shooter game with vehicular combat elements where you play a trooper thrust into a hostile alien world. A popular option is to play online with other gamers; incorporating team strategies online or on a local area network (LAN).
Microsoft loses money on every Xbox console it sells. But first-day sales for Halo 2 toped $125 million in North America when it was released last week. That makes it the fastest-selling media product in the United States ever. In fact, in just one day consumers spent more of their dollars on this game than they have on any movie. Halo 2 was able to attain this remarkable accomplishment in part by pre-selling 1.5 million copies of the game at roughly $50 each. Halo 2 is currently available in eight languages and 27 countries and I believe that with the upcoming Christmas season and the release of several other highly anticipated games, there are other companies in this space worth paying attention to for potential investments.
Though HALO 2 was designed for Microsoft's Xbox gaming system, the unprecedented success of its launch drives home the fact that the video game and accessory makers should not be ignored.
For example, there is another highly anticipated sequel this week by privately owned Valve Software, for PC called Half-Life II.
With each new high profile release, the video game industry is brought back into the spotlight which entices investors to put their money into companies that participate in successful launches. It is important to note that many of these new games require high-end accessories to properly run on PCs. This creates a demand not only for companies that make the games and gaming systems but also for companies that make high end products to enhance existing systems.
One of the easiest and most effective performance enhancing accessories for PC's are high-end video cards. A high-end video card is a necessity for the avid PC gamer who wants to maximize their experience with these advanced new games.
There are several companies that are poised to benefit from the sale of games, game systems, and PC accessories. In particular I like Microsoft (MSFT: news, chart, profile), Nvidia Corp. (NVDA: news, chart, profile) and ATI Technologies (ATYT: news, chart, profile). The latter two companies make high-end video cards required by many top shelf games, and some advanced graphics cards cost in excess of $500.
The fundamental picture on Microsoft is bright with solid earnings and revenues, but the strength in the stock last week has excited technical traders who have definitely noticed that the stock briefly broke above the $30 level to areas not seen since March of 2001. On Monday the stock opened at $27.35 due to the expiration of a $3.08 dividend privilege for holders of the stock. Though this throws a bit of a wrench in the technical picture, the stock appears attractive going into the end of the year.
Nvidia Corp., is another stock with an improving fundamental picture, beating the analysis earnings estimates by 6 cents a share last quarter with an associated increase in revenues of 6.1 percent. Shares of Nvidia endured a sell-off toward the middle of this year, but since August the stock has been trending steadily higher. Upon the release of last quarter's earnings, the stock gapped higher and since has been holding that gap well. Look to buy this stock on a pullback near $18.
ATI technologies (ATYT), is another graphics company that has solid fundamentals and is currently making new multi-year highs. This stock should be bought on a pullback toward the $19 level.
The video gaming industry has proven itself to be a market segment filled with consumers willing to pour their dollars into the newest and best games. Keep in mind that some analysts predict that 50 percent of the yearly revenues of video games companies occur in December alone. As a trader it is wise to be in a position to profit from the companies that benefit from the activity of this market segment going into Christmas season.
David Nassar does not own any of the stocks mentioned in this column