The Rockstar Games being a wholly owned subsidiary of the Take-Two Interactive Software, Inc. was initiated in 1998 for the creation of the most innovative and progressive interactive entertainment. It is to be noted that Take-Two Interactive, Rockstar Games, Rockstar North, Rockstar San Diego, Rockstar Vancouver, Rockstar Toronto, Rockstar Leeds, Rockstar Lincoln, 2K Games, Global Star Software and related logos are the trademarks of Take-Two Interactive Software, Inc. The Rockstar logo is a registered trademark and publishing label of Take-Two Interactive Software, Inc.

Green Light for GameStop

GameStop (GME 36.12), the world's largest video game seller is, without a doubt, benefiting from an industry with strong fundamentals and appealing economics. With overwhelming demand for the three new gaming consoles from Microsoft (MSFT), Sony (SNE), and Nintendo (NTDOY), the company reported record results for its fiscal first quarter, further supporting our positive view on its fortunes and prospects. For the latest quarter, earnings more than doubled to $24.7 million, or $0.15 per share, from $11.7 million, or $0.07 per share, in the year ago period. Excluding one-time costs, earnings totaled $0.18 per share - two cents better than analysts' expectations for $0.16 per share. Revenue rose 23% to $1.28 billion, versus the consensus estimate of $1.25 billion. Same store sales increased 15.3% year/year, also beating the company's previously stated guidance of 12% to 14%. Hardware sales grew 75.1% in the quarter, driven by strong demand for Nintendo's Wii and DS, Microsoft's Xbox 360, and Sony's PlayStation 3. New videogame software increased 36% to $460.6 million, due to demand for games from Nintendo, Sony, Activision (ATVI), and UbiSoft. Top selling games during the quarter included Pokeman Diamond, God of War II, Guitar Hero II, Crackdown, and Ghost Recon: Advanced Warfighter 2. Operating margin increased by 100 basis points to 4.7%, even in the face of lower gross margins due to the very strong sale of lower margin hardware. Selling, general, and administrative expenses were down 260 basis points. Based on the latest results, GameStop expects earnings in a range of $0.07 to $0.08 per share for the second quarter, and $1.39 to $1.42 for the full year. Total revenue growth is seen between 19% and 21%. Analysts are expecting the company to post a profit of $0.08 per share for the current quarter. For the full year, they are looking for earnings of $1.42 per share, on revenue of $6.4 billion, or about 20.5% growth. Even though 2007 is still seen as a transition year for the videogame industry, GameStop is well-positioned to benefit from the build-out of next generation consoles and games, which should help drive further gains in share price. The stock has climbed nearly 70% in the past year, and has more than doubled since we first outlined our bullish option in November 2005. Despite the recent run-up, we remain optimistic about GameStop's prospects as the shift to next-generation systems continues to gain traction. Given strong growth in sales, a focus on cost savings, and better margins, the company looks attractive for long-term investors who don't want direct exposure to the fluctuating fortunes of videogame consol makers and software developers.

--Richard Jahnke, Briefing.com

Interplanetary gaming: Some good games skimp with online play

Witness Medal of Honor Vanguard. It's the -- wait, let me count; one, two, three -- yes, it's the zillionth World War II game ever made where you play as a soldier who parachutes into battle zones to machine-gun Nazis and Italian fascists.

Sounds like a good online game, right? Well, Vanguard is fairly entertaining when you play against the computer. But there's no option where you get to go online to beat up gamers nicknamed ImGonnaKillYouFromPortland or whatever.

When we hardcore gamers can't fight each other online, we feel limited to a few hours of offline adventure.