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Fast Money HomeFast Money Rapid RecapAbout Fast MoneyFast Money BiosFast Money Web ExtraFast Money Disclaimer
Text Size
Sep.09
5:41 PM ET
Wednesday, 9 Sep 2009
British Invasion: 60's Hits Spark Video Game Craze?

Entry Point

Once again giddy teens are glued to their TV sets swooning over The Beatles – but this Fab 4 phenomenon has a modern twist.

It’s a video game that has fans screaming with glee since it hit shelves on Wednesday.

Video Game Frenzy

Developed by Harmonix Music Systems, published by Viacom's [VIA  Loading...      ()   ] MTV Games and distributed by Electronic Arts [ERTS  Loading...      ()   ], -- the video game industry is hoping the new “Beatles: Rock Band” game will sweep the country into a frenzy, just like the Fab 4 concerts did a few generations back.

That may sound a bit frivolous, but the matter couldn’t be more serious.

With consumer spending drained by the recession, sales of video games are down about 46 percent this year, according to NPD Group. Console sales have slowed, too, leading Microsoft [MSFT  Loading...      ()   ] and Sony [SNE  Loading...      ()   ] to cut prices on their consoles in recent weeks.

Demand for the Beatles game could help reverse those trends, driving shoppers to stores where they may be tempted to buy more games or upgrade consoles. The game can be played on the Wii, Sony's PlayStation 3 and Microsoft's Xbox 360.

But can the Beatles deliver massive audiences like they did in the 1960’s?

Outlook Uncertain

"I think 'The Beatles: Rock Band' will be huge," says analyst Michael Pachter of Wedbush Morgan Securities, who sees the game drawing in entire families -- a demographic that was first tapped by Nintendo [NTDOY  Loading...      ()   ] for party games and fitness titles on its Wii console.

The game has won rave reviews from critics. "With all due respect to Wii Sports, no video game has ever brought more parents together with their teenage and adult children than 'The Beatles: Rock Band' likely will in the months and years to come," The New York Times said.

Of course not all analysts are convinced it will be a hit, due to the cost of its accessories and shifts in customers' musical tastes.

"It will have a great first month, due to lots of great marketing and advertising for it, which means that the fans will pick it up early," says Hudson Square Research analyst Daniel Ernst. "But I don't see it driving overall share for 'Rock Band' versus 'Guitar Hero,' and I don't think it's going to drive all kinds of new people into games."

What’s the trade?

I think the Beatles will be a big boost for ERTS, FBR analyst Heath Terry tells Fast Money. But that’s because it’s the first of a series of launches they have coming.

However, the big title this Christmas will probably be Call of Duty and that belongs to Activision [ATVI  Loading...      ()   ]. If you’re looking to trade the space I’d do it with ATVI.

What do you think? We want to know!

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Trader disclosure: On Sept. 9th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (WFT), (SU); Terranova Owns December Gold Futures; Terranova Is Short Dec. Copper Futures; Terranova Owns Oil Futures; Terranova Is Short (CCL); Terranova Works For (VRTS); Najarian Owns (AAPL) & Short (AAPL) Calls; Najarian Owns (BAC) & Short (BAC) Calls; Najarian Owns (C) Calls; Najarian Owns (INTC) & Short (INTC) Calls; Najarian Owns (DFS) Calls; Najarian Owns (FCX), Owns (FCX) Put, Is Short (FCX) Calls; Najarian Owns (JPM) & Is Short (JPM) Calls; Najarian Owns (JOYG) & Short (JOYG) Calls; Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (PALM) Calls; Najarian Owns (TEVA); Najarian Owns (V) & Short (V) Calls; Najarian Owns (WFC) Put Spread; Najarian Owns (YHOO) Calls; Seymour Owns (AAPL), (BAC), (DIS), (EEM), (FXI), (RIG); Seymour's Firm is Short (GFI)

GE is the parent company of CNBC

For Heath Terry:
FBRCM acts as a market maker in securities of (ATVI)
FBRCM acts as a market maker in securities of (ERTS)
FBRCM acts as a market maker in securities of (THQI)
FBRCM acts as a market maker in securities of (TTWO)

CNBC.com and wires

© 2009 CNBC

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