CNBC Stock Blog

Playing Activision and Other Video Game Stocks: Analyst

Activision Blizzard’s hugely anticipated "Call of Duty: Modern Warfare 2'' video game went on sale early Tuesday morning and analysts' sales estimates for the $60 game range from 11 to 13 million units by the end of 2009.

"Call of Duty" Debuts With a Bang

So how should investors play the video game sector? Edward Williams, gaming analyst at BMO Capital Markets, shared his insights. (See his stock picks, below.)

“[Activision] stock is still pretty attractively valued,” Williams told CNBC.

“It's well known that the game is highly anticipated. With the significant pre-orders, the event that’s happening is not necessarily new, but the opportunity is still dramatic and if you look at the stock, there’s still upside in it right now—it can trade into the mid-teens.”

Williams said Activision’s "Call of Duty" series has done well in the past with a huge fan base. He predicts that the latest game will see half a billion dollars worth in sales in its first week on the shelves. He has an "outperform" rating on the company.

“On the dollar side, it’s a huge opportunity relative to the box office," he said.

"But you’ve got to remember that we’re talking about 5 million units versus when you have a movie, the average ticket prices are much less than $60—you see more people attend a movie.”

Williams Likes:

Activision Blizzard

Electronic Arts


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BMO Capital Markets or its affiliates makes a market in ATVI and ERTS.

Williams does not own shares of GME.