Electronic Arts is the publisher of the popular Madden franchise, which gives it a consistent intake every year. Adding to its arsenal with a game like Spore will no doubt boost its bottom line even further.

Activision Blizzard is another strong contender. Guitar Hero has proven extremely popular, as has World of Warcraft. And while the new Call of Duty probably won’t sell as well as its hugely successful predecessor, Call of Duty 4, it will no doubt turn a respectable profit.

Avoid THQ Inc. (NASDAQ: THQI), which seems to have forgotten what games are and Take-Two Interactive (NASDAQ: TTWO), which is overly reliant on its controversial Grand Theft Auto series. Take-Two also had a good opportunity to be taken over by the much larger Elecrtonic Arts, but a deal never got done, which raises questions about the company’s management.

Accessories

As the unrivaled success of the Wii showed, innovation in video game accessories can pay off. For every console, as well as the PC, there are multiple games that can be enhanced by the use of a new input medium.

Games such as Guitar Hero, a game where you use a guitar shaped controller to play along with music, Flight Simulator X - the premiere flight simulator game is greatly enhanced by the use of a joystick, and the Dance Dance Revolution series, which features games that are best played with a dance pad, are always emerging on the market.

While, most of the accessories are made by the company of the game that requires them, there are external controllers that are always there competing for the market. Some companies that make these include MadCatz Interactive Inc. (AMEX: MCZ), a peripheral company specializing in mainly console accessories and Logitech International (NASDAQ: LOGI) a Swiss company that specializes in mostly in PC peripherals.

Retailers

While many electronics stores and retailers sell video games, there are some specifically designed to do so. The biggest of these in the world is GameStop Corp. (NYSE: GME). GameStop stocks new, used and old games, as well as multiple accessories and consoles. The largest video game retailer in Europe is GAME Group PLC (London: GMG). They operate similarly to GameStop. 

Consoles

More than $9 billion was spent on video game consoles last year. Nintendo, Microsoft, and Sony all have new systems on the market, and they’ve all proved formidable.

Here’s a quick breakdown…

Nintendo Wii (Wii)

The successor to the Nintendo GameCube, the Nintendo Wii is the current iteration of the Nintendo console line. It was first available on November 19, 2006. The Wii comes in one package that includes the console, a Wii Remote, a Wii Nunchuck, and (except in Japan) the game Wii Sports. The package is currently priced at US $249.99, GB £179.99, €249-259, and JP¥25,000.

The console’s immense success can be attributed to its broad target audience and its focus on innovation over power, which derives from its controller, the Wii Remote.

The Wii Remote has a fairly simple design that is easy for people of all ages to understand and use. Innovatively, it contains a motion sensor that enables the user of the remote to translate hand motions into game motions. The Wii Remote also has the ability to have other controllers plugged into it such as the Wii Nunchuck and the Wii Classic Controller. This allows for a variety of different forms of game play and makes the Wii a limitless console.

The Wii’s online service is truly vast, with multiple ‘channels’ tailored to its consumers’ needs. The most important of these is the ‘Wii Shop Channel,’ which is divided into two parts: "Virtual Console" and "Wii Ware." Within the Virtual Console, players may purchase and download games for previous Nintendo consoles, as well as consoles such as the TurboGrafx-16 and Sega Genesis. Within Wii Ware, players may purchase original games made to be downloaded on the Wii’s Shop Channel. The currency of the Shop Channel is Wii Points, which can be obtained by buying a Wii Points Card from a store.
           
The Wii has sold (as of June 2008) 29,620,000 units worldwide and Nintendo expects it to sell another 19,830,000 units between June 2008 and March 2009.

Microsoft Xbox 360

The successor to the original Microsoft Xbox, the Microsoft Xbox 360 is the current iteration of the Microsoft Xbox line. It was first available on November 22, 2005. The product currently comes in 3 different packages:

• Xbox 360 Arcade: This is the cheapest of the three packages and has no proper hard drive. It is currently priced at US $279.99, GB £159.99, and €199.99. This is the only version of the Xbox that has NO backwards compatibility with Xbox games.
• Xbox 360 Premium 20GB/60GBs is the most common of the three packages as it comes with everything that the Xbox 360 Arcade had, but the console itself has a 20GB hard drive. It is currently priced at US $299.99, GB £199.99, and €269.99. There is a 60GB version of the console available in the U.S. for US $349.99.
• Xbox 360 Elite: This is the best package in the Xbox lineup. It is exactly like the Premium except it has a 120GB hard drive. It is currently priced at US $449.99, GB £259.99, and €369.99.

The Microsoft online service is known as Xbox Live. All Xbox owners initially start out with a ‘Silver’ membership. This is a free membership that enables a person to do most things, except video chat and play in multiplayer games.

That membership can be upgraded to a ‘Gold’ membership by paying a monthly, quarterly, or annual fee. The cost for one month is US$7.99, UK£4.99, and €6.99. The cost for three months is US$19.99, UK£14.99, and €19.99. The cost for one year is US$49.99, UK£39.99, and €59.99.

Additionally, XBL has a marketplace where people may purchase games made specifically for downloading online, and movies from the Xbox’s extremely large movie base (made so thanks to a partnership between Netflix (NASDAQ: NFLX) and Microsoft). 

The Xbox 360 is notorious for its system failures and the billions Microsoft has spent fulfilling its warranty guarantee due to them.

The Xbox 360 had sold 20.16 million units (as of June 08).

Sony PlayStation 3 (PS3)

The Sony PlayStation 3 is the current iteration of the Sony console line and is the successor to the Sony PlayStation 2 (PS2). The following is the currently available line of consoles:

• PS3 80GB Metal Gear Solid 4 Edition: This model of the PS3 comes with an 80 GB hard drive equipped model of the PS3 as well as the immensely popular Metal Gear Solid 4. The cost of this model is US$499.99. It is only available in the US. This model is important because it is the last model with backwards compatibility (i.e. it can play PS2/PS1 games.)  This model will soon be replaced by a model with the game Uncharted: Drake’s Fortune and a 160GB hard drive. Both models are temporary.

• PS3 40GB/ New 80GB: This model of the PS3 comes with no games however it is equipped with a 40GB hard drive. This model is NOT backwards compatible. The cost of this model is US$399.99, UK£299.99, JP¥39,980, and €399. Within a few months, this model will be completely replaced by a new model with an 80GB hard drive and the same features for the same price. 

There have been multiple models of the PS3 since its initial release, most of which have featured backwards compatibility. Sony’s decision to go with a one-console policy, without backwards compatibility, may raise sales of the still-highly-sought-after PS2’s.

The PS3 can be considered the most powerful machine of the three consoles for its technical specifications. The PS3 also sets itself apart from the competition by having every unit come with a preinstalled Blu-Ray player (the hi-definition successor to the DVD format).

The PS3 has a free online service known as the PlayStation Network (PSN). Through the service, people may purchase games made especially to be downloaded through the network. These games are generally of higher quality than most, because of the developing force that Sony has let its own studios put into the service. There are also select PS1 games available for download. The store also has a small but expanding section devoted to buying/renting full-length movies, TV episodes, and anime. The entire PSN store is growing weekly.   

Sony is soon going to launch a new service known as "Home." Home is a 3D environment where people can create their own lifelike 3-D person and communicate with other people. Home is supposedly going to be free and will make money through advertising in the virtual world.

There have been 14.41 million PS3 units sold as of June 30, 2008.

Sony PlayStation Portable (PSP)

The Sony PlayStation Portable is Sony’s entry into the handheld market. It has undergone one redesign, though the core product is still the same. It features the ability to play music, play videos, view pictures, connect to the Internet via Wi-Fi, become a Wi-Fi cell phone (with attachment), play Internet radio, play UMD (the PSP disk format) movies, and of course, play PSP games. The PSP is currently priced at US$169.99, UK£129.99, €169 and JP¥19800. The PSP has sold 37 million units worldwide (as of June 2008). The PSP is also going to get a new version (PSP-3000) extremely soon.

Nintendo DS (DS)

The Nintendo DS is Nintendo’s latest foray into the handheld market. It too, has had one redesign. It features Wi-Fi, a dual screen with a stylus for the bottom screen, and backwards compatibility with Game Boy Advance cartridges. The Nintendo DS is extremely popular with female users as 48% of its users are female, according to Nintendo. The DS is currently priced at JP¥16800, UK£99.99, US$129.99, and €149.99. The DS has sold 77,540,000 units worldwide and is expected to sell another 21,060,000 units by March 2009 (as of June 2008).

All of these companies are reasonably solid investments, but, in terms of gaming, Sony Corp. (NYSE: SNE) and Nintendo Co. (Pink Sheets: NTDOY) look like they are going to have some very good years.

Sony has got an amazing games division that is producing very high quality games for its console.  And Nintendo is always going to be in demand, though it needs to start making more games for the Wii and DS.

Microsoft Corp. (NASDAQ: MSFT), on the other hand, needs to acquire more exclusives, plus this report has nothing to do with the upcoming Windows 7, which is the biggest part of Microsoft’s business.

Hon Hai Precision Industry Co.

Hon Hai Precision Industry Co. (OTC: FXCNF) is a technology company based in Taiwan. It manufactures the Mac mini, the iPhone and the iPod for Apple Inc. (AAPL), cell phones for Nokia Corp. (NOK), and motherboards for Intel Corp. (INTC).

Of course, it also manufactures PS2, PS3, Xbox 360, and Wii - the four most popular gaming consoles - making it a tremendous play on the video game industry.