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Thousands of football fans and video game junkies will flock to stores tomorrow to buy the latest-and-greatest version of Madden, the indisputable leading brand in football video games. In the first week of sales, the game should sell at least 2 million copies.From all of this Madden madness which should rise in coming weeks, there are two potential ways to make money: Electronic Arts (NASDAQ: ERTS) and Circuit City Stores (NASDAQ: CC).
Electronic Arts is the creator and owner of the Madden brand. Understandably, the success of the newest Madden in coming weeks should be directly correlated to the news flow for the stock. The company's third and fourth quarters should be incredible, not only attributable to Madden but also from the company's other popular games. The issue then becomes: is all of this priced into the stock? The answer to that question could go either way. While the stock is up about 10% so far in August, bulls in the stock argue that analyst estimates for the upcoming quarters remain low.
Circuit City is just one of the many stores that will be selling Madden in the next few months. But this play has one benefit over the rest of its competitors -- the company recently signed a deal with cover-icon Vince Young. When this news was announced on August 8th the stock moved up nicely which leads me to believe the market is actually listening and this company isn't "too big" to be effected by such an event. This deal could help bring in buyers who would have traditionally used another store like Best Buy (NYSE: BBY). With the stock as beaten down as it is, I'd argue that any positive news for the company should help move shares higher.
One name that I also have to mention is the primary video game retailer in the U.S., Gamestop (NYSE: GME). The stock has enjoyed incredible momentum in recent years and the valuation isn't as attractive as it once was but, like Circuit City, positive new should send shares higher because of this company's focus on video game sales.
The Madden euphoria could lead to profits for traders in coming months, what do you think?
Disclosure: Kevin Kelly is a long-term owner of Gamestop (GME).
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