Monday, December 03, 2007

Video Games are HOT!

Well yesterday it was annouced that Activision (ATVI) and Vivendi would be merging to form the world's largest video game company. We actually own ATVI because we decided this was the year for video games and systems. Turns out it has been.

But this merger seems like a smart move. Vivendi (AKA Blizzard) is a company known for PC-based games. And ATVI is typically known as the younger sibling of Electronic Arts (EA). However this year I think they've managed to have a stellar/breakout year.

How so? The biggest seller this Christmas is Guitar Heroes 3. People are buying this game like hotcakes. Normal video games sell for $49.99 upon release. So does Guitar Hereos, however ATVI has a brilliant marketing strategy of selling the guitar packaged with the game for $89.99. And it doesn't end there. ATVI is selling faceplates for the guitar and stands. How'd they manage to sell a $100 game? And kids are begging for it. On Black Friday I saw people rushing for Guitar Heroes 3.

So with this new deal, do we wait or sell our ATVI? We're going to reorganize our portfolio at the end of the year. So we'll see. Right now we're up about 40%

2 comments:

Jim ~ mydebtblog.com said...

I would say keep it while the market is hot for Guitar Hero. As soon as people realize that they're not really playing an instrument the hype will die down. I was in band up into high school and know what it's like to actually know how to play something. I quit band when I stopped enjoying playing my trombone even though I’ll never forget how fun it was to play it. Punching buttons on a plastic toy is entertainment, not talent.

With that said I want Guitar Hero 3 for my 360 because I've played the second one out. :)

Living Almost Large said...

Maybe but probably not because we're due to look rebalancing the portfolio and see what we keep or not.