Microsoft, Sony, and the cheaper Xbox 360

My gut is leaning toward Sony. I think many more consumers will head to that platform. Why? Well, this is based mostly on personal bias. I don't own any new-generation system, but if I were in the market for one, I would pick up a Sony PlayStation 3. Since cost isn't a concern, why should I have to put up with potentially experiencing that red-ring-of-death thing? Doesn't sound like fun to me.

Both systems, though, have their advantages in terms of library product. Want to play a game of Halo? Good luck doing so on a PlayStation unit, because you can't. Sony likewise has its own exclusive games.

We won't know who will be the victor until we know. No matter what, though, this should give a boost to the video-game industry. Plus, a lot of observers believe that Nintendo Co., Ltd. (OTC: NTDOY) will have no choice but to lower the price of the Wii. That might be a debatable point in certain respects, but the possibility of a more economical Wii grows with each passing day. And that would be very exciting for the sector.

There are stocks that are bound to react to this news over time. GameStop (NYSE: GME) comes to mind, as it should. In addition to that retailer, publishers such as Activision Blizzard (NASDAQ: ATVI) and Electronic Arts (NASDAQ: ERTS) are investment ideas that should be looked at. Now, one word of full disclosure: I had written before that these stocks might make for good trades ahead of a price cut. Unfortunately, they don't seem to be reacting as well as I thought they would be once the reductions occurred. Take a look at the action on the companies and you'll see what I mean. I guess once the news was out it didn't matter anymore. One note: I'm not currently interested in the hardware makers. In my opinion, other players in the industry might see a bigger boost in share price than a Sony or a Microsoft will since companies that manufacture the systems will certainly have to absorb the effects of the reductions.

Nevertheless, I think cheaper hardware will translate to better software sales during the holiday season. Studying the publishers today might pay off later. In the end, you'll have to make your own decision on whether to buy or not. As for me, I continue to hold my Activision Blizzard position, as I believe that company is best suited to take advantage of a rising gaming economy.

Disclosure: I own Activision Blizzard; positions can change without notice.