Friday, December 23, 2005

RealMoney Radio Mailbag: Turn On Activision

RealMoney Radio Mailbag: Turn Off Activision: "James J. Cramer: While I believe the video game industry's fortunes will turn soon, I prefer Electronic Arts (ERTS:Nasdaq - commentary - research - Cramer's Take) to Activision due to its superior product lineup. I believe the recent decline in Electronic Arts has taken out some of the risk, and I would be a buyer here."

I think I'll follow the George Costanza rule of thumb and disagree here, Jim. booyah!

Activision Xbox 360: Call of Duty 2, Quake 4, X-Men, Tony Hawk, Gun

EA: 360 Sports games (Madden, Fifa, Tiger, Fight Night)

I think Jim's a football fan. Most of the guys I know would be buying Call of Duty 2 over Madden.

Both companies have 0 debt & lots of cash.

EA Quarterly Earnings Growth: -47.40%
Activision Quarterly Earnings Growth: N/A?

Activision 10-day vol of 9.7M
EA 10-day of 4.7M

EA @ 53.37
ATVI @ 13.51 (After a bunch of splits.)
EA - 16 SEC filings
ATVI - 26.

After reading Masters of Doom, about the two guys who founded id software, it seems like Activision would be the better play of the two. EA seems like a monolith, with 6,100 employees vs. Activision's 1,728.

Of course, EA has The Sims.... and TakeTwo owns Rockstar Games... hmm... TakeTwo...

TakeTwo has 1,435 employees, and (only) 1.25B market cap.

P/E is only 15.37 for take-two. 44 for both atvi & erts. Is TakeTwo the underdog here?

Of course, Jack Johnson bought some stock to go to the shareholders meetings to protest. But PT Barnum would approve of the publicity...

TakeTwo has no Xbox 360 games though??? Also, TakeTwo's site doesn't distinguish between platforms like the other two, which seemed to be ripping off each other's ideas.

I still like the old Atari & Intellivision games, so I think Activision may still have something left.

Atlantis, Barnstorming, Boxing, Chopper Command, Crackpot, Cosmic Commuter, Dolphin, Dragster, Enduro, Fishing Derby, Freeway, Frostbite, Grand Prix, HERO, Ice Hockey, Kaboom!, Keystone Kapers, Laser Blast, Megamania, Pitfall, Plaque Attack, River Raid, River Raid II, Seaquest, Skiing, Sky Jinx, Spider Fighter, Stampede, Starmaster, and Tennis.

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