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As a shareholder of a video game company I am constantly searching the Internet to find which games are selling well and which games have strong pre orders. The large player in physical video game stores is Gamestop (NYSE:GME) and I am not a frequent customer there so I don’t really see what is being sold in stores or what games have been pre-ordered there. Instead I rely on numerous video game sites and Amazon.com (NASDAQ:AMZN), the leader in video game sales online.

Investing in video game stocks is hard to do and can prove very risky. Several video game companies have disappeared completely as once their hit games lose popularity or they have put out as many sequels as video game users will play, so their company begins to disappear. Companies struggle with coming out with hit games each and every year to grow sales. Large video game companies rely on huge teams of video game writers and developers to produce numerous hits in a year. After all one big hit video game can make a company but they could fail to enjoy the same results the next year when their earnings are compared to those from the hit game.

After searching the Internet I have compiled a list of video games that should be on the top 10 to 20 bestsellers list for the entire calendar 2012. Several of the games do not have release dates which could mean they do not come out in 2012 and would be left out of the money. (Comparable sales figures are based on units sold in the United States only and are from vgchartz.com, Pre-orders are based as of 11/19/11 on vgchartz.com.)

Diablo 3

Owner: Blizzard (NASDAQ:ATVI)

Release Date: 03/31/12

Info: Diablo 3 is the long awaited computer game in the Diablo series by Blizzard. The game has been in development for over eight years and will finally be released in 2012. Recently Blizzard announced that current World of Warcraft players who sign up for a full year will receive a free copy of Diablo 3. The move could actually hurt sales of Diablo 3 depending on how the company classifies this “giveaway,” but it was a smart move by Blizzard as it attempt to fend off competitors in the MMORPG category. The video game is going to be a huge seller for Blizzard and will be enjoyed by gamers alike. Look for Blizzard to integrate the game on its battle.net and somehow get subscriber revenue out of it. I think in the future Blizzard will be able to charge a monthly subscription fee to play World of Warcraft, Starcraft and Diablo 3 all on the same network.

Comparable Sales: Diablo 1.73 million copies, Diablo II 2.82 million copies

Preorders: 242,000

My Predicted Sales: 4.25 million copies

How to Trade: With the release of Diablo 3, a WOW expansion, and a Starcraft expansion, Blizzard could be in for its best year ever. The release of the new Star Wars MMORPG will lead to some doubters of WOW and Blizzard. But the company, as it has over the years, will prove its doubters wrong and have a blowout year. Buy ATVI.

Halo 4

Owner: Microsoft (NASDAQ:MSFT)

Release Date: TBA 2012

Info: I had reservations about putting this game on the list as it is currently listed as being released quarter four of 2012. Video game releases rarely move up and are more likely to be pushed back than stay on track. However, leaving off this game from the franchise that has sold over 40 million games would make the list foolish if the game is released in 2012.

Comparable Sales: Halo: Combat 4.91 million copies, Halo 2 6.65 million copies, Halo 3 6.89 million copies.

Preorders: 129,000

My Predicted Sales: 7 million copies

How to Trade: Some analysts have argued for Microsoft to split off its video game unit. This move would be very successful and rewarding to shareholders in my opinion. This could be the year to do it as the holidays are bringing brisk sales of XBOX 360s and the Kinect software. New releases like Halo 4 and several Kinect games could further XBOX’s dominance among video game software. Buy MSFT.

Madden 2013

Owner: Electronic Arts (ERTS)

Release Date: TBA

Info: The game is not even in development and already it makes my list of video game top sellers for the next year. Madden is the top selling sports franchise of all time and continually leads the way in sports video game sales every year. The sales of Madden 2012 proved to be a little softer due to the pending lockout and all the publicity of a possible missed season. The New Year will bring a full NFL season including training camp, preseason and the regular season, which will keep gamers ever more excited for this annual release. Electronic Arts leads the market in sports video games and its Madden, NHL and Fifa releases every year continue to get better and sell well.

Comparable Sales: Madden 2011 (All Platforms) 5.01 million copies, Madden 2012 (All Platforms) 2.18 million copies.

Preorders: 0

My Predicted Sales: 4.5 million copies

How to Trade: Electronic Arts has an excellent year ahead with the release of Star Wars: The Old Republic, a new Mass Effect game, and the always popular sports games. EA continues to make a push into social gaming which should help them in the future. Look to get shares of Electronic Arts now while they are on sale. Buy ERTS.

Mass Effect 3

Owner: Electronic Arts (ERTS)

Release Date: 03/06/12

Info: The story of Commander Shepard has been told through the first two Mass Effect games and this third in the trilogy will wrap up the storyline and close out the series for now. The game will feature a multi-player mode.

Comparable Sales: Mass Effect (only XBOX 360) 1.37 million copies, Mass Effect 2 (XBOX 360 and PS3) 1.95 million copies.

Preorders: 400,000

My Predicted Sales: 3 million copies

How to Trade: Electronic Arts has an excellent year ahead of them with the release of Star Wars: The Old Republic, a new Mass Effect game, and the always popular sports games. EA continues to make a push into social gaming too which should help them in the future. Look to get shares of Electronic Arts now while they are on sale. Buy ERTS.

Max Payne 3

Owner: Rockstar Games, a subsidiary of Take Two (NASDAQ:TTWO)

Release Date: March, 2012

Info: The newest game in the Max Payne franchise is being written by a writer from the Grand Theft Auto series which should help with the storyline. The game is set eight years after Max Payne 2 in Brazil as Max Payne works as a privately hired security guard for a wealthy family. The game was supposed to be released in 2009 and has continually been pushed back to develop the game fully so users can have the best experience. Rockstar better make sure they get the game right because critics will eat it alive if it was delayed and isn’t up to par. Take Two, the owner of Rockstar, is a smaller player in the video game market and has a smaller batch of hit games. The company owns Grand Theft Auto, Max Payne, the 2K Sports franchises, L.A. Noire and the Red Dead series. A hit with Max Payne could be a big help to the company and could boost shares which trade for close to half of the $25 a share that Electronic Arts offered in a buyout attempt in 2008.

Comparable Sales: Max Payne 2.79 million copies, Max Payne 2 (Only XBOX) .48 million copies.

Preorders: 100,000

My Predicted Sales: 2.5 million copies

How to Trade: Take Two shares always look tempting as a takeover target considering they are currently at half of what EA was willing to pay. The company has some strong brands in Grand Theft Auto and the 2k Sports franchises. Look for Max Payne to help keep the company on the map and help someone make a bid for the company before the new Grand Theft Auto game comes out. Buy TTWO.

Metal Gear Solid: Rising

Owner: Konami (NYSE:KNM)

Release Date: TBA 2012

The latest game in the Metal Gear Solid will break away from the traditions of the game to bring a new style game. The action shooter game will be released for the XBOX 360 and Playstation 3. The game has been confirmed to be playable in 3D on Playstation 3. The game’s trailer has been very trending as viewers see that you can essentially cut through enemies and take any of their body parts with you in the game. The spin-off should be a big seller in one of the most successful video game series of all time.

Comparable Sales: Metal Gear Solid Peace Walker .35 million copies, Metal Gear Solid 2.81 million copies

Preorders: 48,000

My Predicted Sales: 2 million

How to Trade: Konami is publicly traded in the U.S. and Japan, where its headquarters are. The company has many segments to it and video games make up just a portion of its sales and revenues. The release of the Metal Gear Solid game isn’t enough for me to get behind shares. The company’s Dance Dance Revolution game is being outsold by Just Dance, its Pro Soccer Evolution is outsold by FIFA, and it doesn’t have a great lineup of games anymore. Sell KNM.

Prototype 2

Owner: Activision (ATVI)

Release Date: 04/24/12

Info: Sequel to the game with the same name put out in 2009. Featuring a shape shifter as a protagonist the game will follow a similar plot as the first game. Was one of the most popular video games at the recent Comic-Con and could be on its way to becoming a successful franchise for Activision. The original game sold 1.9 million copies around the world.

Comparable Sales: Prototype 1.26 million copies

Preorders: 0

My Predicted Sales: 2.8 million copies

How to Trade: With the release of Diablo 3, a WOW expansion, and a Starcraft expansion, Blizzard could be in for its best year ever. The release of the new Star Wars MMORPG will lead to some doubters of WOW and Blizzard but the company, as it has over the years, will prove its doubters wrong and have a blowout year. Buy ATVI.

Star Wars: Old Republic

Owner: Electronic Arts (ERTS)

Release Date: 12/20/11

Info: The highly anticipated MMORPG based on the best selling movie series Star Wars has the potential to be a complete game changer. Analysts have been saying that the game could be the first to take users away from World of Warcraft. I think users will likely play both or the entire MMMORPG market will grow as new users interested in Star Wars will take a chance on this video game and try out the online video game market for the first time. Either way they get users, Electronic Arts is likely to have a big hit and a video game that will provide monthly revenue the same way WOW does for Blizzard. The game is being released in December of 2011 so it will see its initial success at Christmas time but is likely to sell many copies of the game in 2012 as well.

Comparable Sales: World of Warcraft 4.02 million copies, Star Wars: Knights of Old Republic 1.51 million copies

Preorders: 901,000

My Predicted Sales: 4.5 million copies

How to Trade: Electronic Arts has an excellent year ahead with the release of Star Wars: The Old Republic, a new Mass Effect game, and the always popular sports games. EA continues to make a push into social gaming, which should help them in the future. Look to get shares of Electronic Arts now while they are on sale. Buy ERTS.

Starcraft 2: Heart of the Swarm

Owner: Blizzard (ATVI)

Release Date: TBA 2012

Info: The expansion pack for the Starcraft sequel features eight new multi-player units and several new species for gamers to play with. Updated graphics will be featured as well. The sequel sold over 1.6 million copies and if even half of them pick up the expansion pack it will be a clear slam dunk for Blizzard.

Comparable Sales: Starcraft 3.77 million copies, Starcraft 2 1.71 million copies

Preorders: 0

My Predicted Sales: .8 Million Copies

How to Trade: With the release of Diablo 3, a WOW expansion, and a Starcraft expansion, Blizzard could be in for its best year ever. The release of the new Star Wars MMORPG will lead to some doubters of WOW and Blizzard but the company, as it has over the years, will prove its doubters wrong and have a blowout year. Buy ATVI.

Terra Online

Owner: Bluehole Studio, distributed in U.S. by Atari

Release Date: Spring 2012 (was already released in South Korea in 2011)

Info: This highly anticipated MMO game also known as The Exiled Realm of Arborea is a game that could surprise and create a new large player in the MMORPG market. The game has built up quite a buzz and the previous release in Asia could make it even more highly anticipated now that people have started playing the game. If the game can catch on Bluehole Studio will enjoy monthly subscriber costs from users which it could use to create new games and further develop as a private company.

Comparable Sales: World of Warcraft 4.02 million copies

Preorders: 0

My Predicted Sales: 1.75 million copies

How to Trade: Bluehole Studios remains private but could be bought out by a large U.S. company like Activision or Electronic Arts. Atari was the surprising U.S. distributor of the game. Atari also has a game on Amazon’s Top 100 in The Witcher 2. I wouldn’t be surprised to see Atari bought out or come back as a key video game player. Shares trade up 63% as I am writing this though so I will say Hold. Hold ATA.PA.

Those Who Missed the Cut

Fifa 2013 (Electronic Arts) – Similar to the Madden info above, the game continually sells well as the company produces a new game each year. Is the number one selling soccer game around the world each year.

Guild Wars 2 (NC Soft) - The highly anticipated sequel to the 2005 video game has no release date but could squeeze into the 2012 video game releases.

Tomb Raider (Square Enix) – New release in the bestselling franchise could be a huge seller and creep into the top 10 list.

World of Warcraft: Mists of Pandaria (Blizzard) – I almost put this game on the list above but with no official release date it is hard to predict what 2012 will have in store for the latest WOW expansion game and what it will have in store for Blizzard.

Summary of Stocks

Activision Blizzard (ATVI)

Starting Price: $12.41

12 Month Target: $16.50

Recommendation: Buy

For more on Activision see my last article here

Amazon (AMZN)

Starting Price: $197.13

12 Month Target: $200.00

Recommendation: Hold

Atari (ATA.PA)

Starting Price: $1.70

12 Month Target: $1.75

Recommendation: Hold

Electronic Arts (ERTS)

Starting Price: $23.33

12 Month Target: $28.00

Recommendation: Buy

Gamestop (GME)

Starting Price: $23.36

12 Month Target: $28.00

Recommendation: Buy

For more on Gamestop see my article here about a local shopping mall.

Konami (KNM)

Starting Price: $28.98

12 Month Target: $24.50

Recommendation: Sell

Microsoft (MSFT)

Starting Price: $25.28

12 Month Target: $28.00

Recommendation: Buy

Take Two (TTWO)

Starting Price: $13.82

12 Month Target: $16.00

Recommendation: Buy

I have been following the video game industry closer over the last few months and will try to update information and sales throughout the year. Thanks for reading and I look forward to your comments and suggestions.

Source: Predictions For 2012's Best Selling Video Games Present Buying Opportunities