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Which game stocks will benefit from new console launches?

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A new generation of games consoles ought to be a golden opportunity for investors hoping to cash in on industry growth. But which stocks are most likely to rise?

Investment website The Motley Fool has made its picks, based on early movers and shakers in the PlayStation 4 and Xbox One arena. The Fool reckons the following are worth a look:

  • Advanced Micro Devices: Creates the chips used in both the new consoles and likely to profit from strong sales.
  • Foxconn: Best known for harsh employment culture, the company is also involved in manufacturing the consoles.
  • Electronic Arts: Sports franchises like Madden and FIFA do especially well early in console life-cycles.
  • Take Two Interactive: See EA, except it's NBA 2K on court. The lack of used games for new consoles, keeps prices high.
  • Activision: The Fool adds a note of caution about games publishers in general, but believes Activision-Blizzard looks like a ripe pick.
  • GameStop: Despite many predictions of the death of games retail, the leading dedicated chain is resilient.

The Fool points out that game industry stocks are notoriously uncertain. "It's a big industry, but it's impossible to predict from a console's launch how successful it will be. That uncertainty can scare off investors, but there are ways to invest in the latest console boom without trying to pick a winner."

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