Is it possible that the video game sector is finally making a comeback? Are all the silly little virtual farm animal games from the likes of Zynga, Inc. (NASDAQ: ZNGA) finally petering out? The free and “freemium” games raised hell in the video game sector after the recession. And a lack of new game consoles created a situation where the excitement has faded. But now we have three new video games which are only going to create more interest in the sector.

All you really have to do is look at GameStop Corp. (NYSE: GME). While shares are up 3% at $25.25 so far on Friday, this stock has been rising while broader market has been falling. The company’s results from this week show that the focus will be on a new hardware upgrade cycle.

And what about those three big video game hits?

Activision Blizzard Inc. (NASDAQ: ATVI) may best be known for its World of Warcraft franchise, but Call of Duty is the new current king of the hill. Call of Duty: Black Ops II is now the biggest video game hit of the year. Dow Jones showed that th hit video game is now a 4-year winner but its sales were a whopping $500 million in the first 24 hours of its release. Activision Blizzard shares are up over 2% at $10.85 today but shares are painfully close to the lows as the 52-week range is $10.45 to $13.01.

And what about that lagging Microsoft Corporation (NASDAQ: MSFT) during the age where people treat PCs as utilities? What about Halo 4? After not getting the great prior results from Halo off-shoots, the return of Master Chief is supposed to be the first of a new trilogy. With a new Xbox supposedly coming in a year (again, supposedly for now), the excitement will return here even if Halo is not really enough to move the needle at a behemoth like Microsoft. Still, the launch of Halo 4 generated $220 million in game sales in the first 24 hours.

And what about that old dog of a company Take-Two Interactive Software Inc. (NASDAQ: TTWO)? Its Rockstar Games unit announced in recent weeks that Grand Theft Auto V will come out in the Spring of 2013 on the PlayStation 3 and on the Xbox 360 video game systems. This is supposedly its largest and most ambitious title in the series to date and pre-orders are already being taken so that it can at least have vouchers in stockings this Christmas. Carl Icahn even recently bought more shares above that 10% ownership threshold.

It remains to be seen if the new Wii will be a huge draw like the last platform launch. If Sony Corp. (NYSE: SNE) and Microsoft Corporation (NASDAQ: MSFT) can get new consoles out by the end of next year with enough lead time for publishers to build upon new hit gaming franchises, the video game sector will be back.

And for Zynga, Inc. (NASDAQ: ZNGA)? This is not good for the company. With a $1.7 billion market value it is at least trading close to its tangible book value. That being said, the “social gaming” experiment may finally be taking a backseat to the real video game sector.

JON C. OGG

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