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The Problems

Microsoft (NASDAQ:MSFT) released Xbox 360 in 2005 and they are waiting until 2015 to release the next generation. Sony released PlayStation 3 in 2006 and they are waiting until PlayStation 2 stops selling in Eastern Europe, Middle East, Southeast Asia and South America. THQ filed for bankruptcy. The Nintendo Wii U is not selling as fast as the Wii.

The Solution

We need new video games stocks before the new generation of consoles is released.

Sony (NYSE:SNE) is busy selling its batteries, buildings in New York and maybe Columbia Pictures to The Walt Disney Company (NYSE:DIS) or Time Warner (NYSE:TWX) (They both want Spider-Man and James Bond. Maybe they should buy Sony). They cannot save Electronic Arts (NASDAQ:EA) or anybody else.

If Sony goes any lower, then they could be bought by Activision Blizzard (NASDAQ:ATVI), Electronic Arts, Take Two, Capcom, Konami (NYSE:KNM), Square Enix, Microsoft, Nintendo (OTCPK:NTDOY) or Apple (NASDAQ:AAPL) (yes, Apple now sells two popular video game consoles: iPhone and iPad) for just $1 billion each.

Note to Kazuo Hirai: Move all your factories in Japan to Mexico.

Like Bonnie Tyler used to sing "I Need a Hero," that hero is Tomb Raider. If you don't know who she is, then you really need to drive to Blockbuster and buy the very financially successful films Tomb Raider and Tomb Raider: The Cradle of Life

Guinness World Records
First Oscar-winning actor to star in a video game adaptationJohn Voight
Best-selling video game heroineLara Croft
Most prolific 3D platform game series

Tomb Raider

Ratchet & Clank

Tomb Raider is currently owned by Square Enix, which could file for a $5 billion IPO in 2013 in the United States of America. Capcom could also file for billions, and their brands Street Fighter and Resident Evil could attract a lot of investors from many countries. Also, they could use the cash to buy Constantin from Germany (they make the Resident Evil films) and also to produce a Street Fighter film with EuropaCorp, Avi Lerner and maybe a company from China.

There is demand for a video game company that publishes not only games for Xbox 360 or PlayStation Vita but also for iPhones, Microsoft Windows Phones, Google (NASDAQ:GOOG) Android phones and maybe even Research in Motion (RIMM) Blackberries. Every day, more people are playing on Facebook (NASDAQ:FB). It turns out people playing for free actually pay a lot of real cash for swords, shields, magic books and other virtual things. The free games are now selling over $10 billion each year.

Video game companies don't want to sell a game for $0.00 when they used to sell it for $59.99, but EMI (founded in 1897) did not want to sell The Beatles' songs for $0.00 at Grooveshark when they used to sell the CDs for $9.99 either and they were acquired by Sony and Vivendi in 2011. Sony itself may be forced to split its record label into a separate company in the future in order to survive like Time Warner did years ago.

Armed with billions, companies like Capcom, Square Enix, Namco Bandai and Tecmo Koei could acquire the global industry leaders and become once again the worldwide emperors of the video game empire.

Steven Spielberg and Peter Jackson are now working for the video game industry. Other directors like Quentin Tarantino, Christopher Nolan and Ridley Scott could also move to Silicon Valley.

Gore Verbiski already convinced investors to pay $135 million to Industrial Light and Magic (purchased by The Walt Disney Company) for Rango. This film was successful and sold over $245 million. I am sure he can convince them to back his new $50 million video game starring Johnny Depp as the voice of the leading role and published by Paramount Games (not an actual company, because they are scared of video games after the Midway fiasco)

Note to Brad Grey: If at first you don't succeed, then buy another video game company.

Should I Stay or Should I Go?

Sell short all the video game stocks except Ubisoft and Take Two. These stocks will go up when the next generation of consoles is released. Monitor both Sony and Microsoft daily. As soon as you hear something, cover your positions and go long again. You need to watch closely PS2 sales in the regions mentioned earlier. If they drop, then Sony will be forced to release the PlayStation 4.

Electronic Arts already tried to buy Take Two (NASDAQ:TTWO) years ago. They may try to buy them again Before Grand Theft Auto V is released. Keep buying Take Two until the price reach $4 billion.

Electronic Arts used to hold 15% of Ubisoft for 6 years and they may decide to increase their holdings to 49%.

Conclusion

Electronic Arts must buy Take Two for $4 billion before Grand Theft Auto V is released, and also buy up to 49% of Ubisoft, or they will be acquired by a Japanese company raising billions from a new NASDAQ IPO

With a price of $12 billion, Blizzard Activision will remain independent for a few years

Source: Why Tomb Raider Could Be One Of The Hottest IPOs In 2013