"As a conservative long-term oriented investor I tend to keep individual position sizes to no more than 5% of the overall portfolio; however in the case of Activision Blizzard (ATVI), I'm building a more concentrated position that I expect to pay off in the next two to three years," says Asif Suria.

In his The SINLetter advisory, he offers 10 reasons why he believes the stock is an attractive core long-term investment. He explains, "My goal is to eventually build this position until it represents 20% of my personal portfolio. Here are 10 reasons behind this decision.

1) Activision released the highly anticipated game Call of Duty: Modern Warefare 2 and racked up $310 million in sales from the United States and United Kingdom over a 24 hour period. With Christmas right around the corner, the final sales numbers for this edition of Call of Duty are going to be much bigger.

Electronic Arts (NASDAQ: ERTS), a video-game publisher that competes with Activision Blizzard (NASDAQ: ATVI), THQ (NASDAQ: THQI), and Take-Two Interactive (NASDAQ: TTWO), issued Q1 stats after the bell on Tuesday. Things are looking up for the company famous for its Madden brand of football software. Adjusted revenues increased over 30%, and the loss on the bottom line narrowed to 2 cents per share from a loss of 42 cents per share in the year-ago period.

The profit performance beat Wall Street's expectations, as Alex Salkever reports over at DailyFinance. You can check out his article to get the highlights of the quarter and a perspective on the current state of the video-game industry, which includes console makers Sony (NYSE: SNE), Microsoft (NASDAQ: MSFT), and Nintendo (OTC: NTDOY).

Today's news was entirely about financial stocks. There is no denying it. We ran a full summary bank by bank showing the needs or lack thereof that Uncle Sam was going to require. But because those have all been read about over and over, today's closing bell piece revolves around some of the other winners that are outside of financial stocks. You would have never thought that 8.9% unemployment could look so good. Here are the unofficial closing bell levels:

Dow 8,574.81 +164.96 (1.96%)
S&P 500 929.21 +21.82 (2.40%)
Nasdaq 1,739.00 +22.76 (1.33%)

Top Analyst Upgrades
Top Analyst Downgrades

Activision Blizzard (NASDAQ: ATVI), a video-game publisher that competes with Electronic Arts (NASDAQ: ERTS), THQ (NASDAQ: THQI), and Take-Two Interactive (NASDAQ: TTWO), reported some cool first-quarter numbers on Thursday after the bell. On an adjusted basis, the company earned 8 cents per share. According to analysts, Activision Blizzard was only supposed to do around 5 cents per share.

Not only was the bottom line solid, but revenues on an adjusted basis also came in ahead of expectations. And you can thank the usual suspects for powering up the quarter. You've got Call of Duty. You've got Guitar Hero. You've got World of Warcraft. These best-of-breed franchises are selling a lot of copies on Sony's (NYSE: SNE) PlayStation 3, Microsoft's (NASDAQ: MSFT) Xbox 360, and Nintendo's (OTC: NTDOY) Wii.

Boy, I'll tell you, owning Activision Blizzard (NASDAQ: ATVI) has been tough lately. I love the company's prospects. It's got great franchises: Call of Duty, Guitar Hero, World of Warcraft. It's doing better than rivals Electronic Arts (NASDAQ: ERTS) and THQ (NASDAQ: THQI). But the stock has been hitting a lot of technical resistance. Not only that, but CEO Bobby Kotick recently sold a bunch of shares (over a million, actually).

Well, in terms of that insider sale, we can all relax. Basically, Kotick was exercising options that were set to expire relatively soon, says Barron's. That accounted for one million shares. Now, he did also sell over 240,000 shares that were stored in a trust. The mitigating factor here is that Kotick operates under restrictions as to when he can and cannot sell stock. So, in an overall sense, we can give him a pass on this one. Silicon Alley Insider supports this sentiment, and talks about another insider's sale in similar terms.

Activision Blizzard (NASDAQ: ATVI), a video-game publisher that competes with Electronic Arts (NASDAQ: ERTS), THQ (NASDAQ: THQI), and Take-Two Interactive (NASDAQ: TTWO), reported earnings for the fourth quarter on Wednesday after the bell. The company did well during the holiday-selling season, in my opinion. According to this source, adjusted quarterly earnings of 31 cents per share beat estimates by two pennies. Non-GAAP sales of $2.3 billion also beat analyst expectations.

However, the market decided to sell the stock in the after-hours session after the earnings were released because of what was perceived to be a poor outlook for the next fiscal year (as I was writing this piece, the shares were off by about 4%). Analysts were hoping that 2009 would bring 67 cents per share on an adjusted basis, but Activision Blizzard's management team thinks 61 cents per share is more likely.

I'm still bullish on Activision Blizzard (NASDAQ: ATVI), which competes with Electronic Arts (NASDAQ: ERTS) and Take-Two Interactive (NASDAQ: TTWO), among others. For now. I qualify my stance because, I have to admit, my confidence has been shaken. Although I recently wrote a positive piece about the publisher's prospects, there's some word that the company's two major franchises may not have sold as well as expected during the holidays.

Two analysts have cut their price targets on the company's stock, and the stock has hit technical trouble. Indeed, if you own shares of Activision Blizzard, you've noticed the recent deterioration in the stock's momentum. The problem is that sales of Guitar Hero and Call of Duty may have been affected by the bad economy. Although they undoubtedly sold very well, they may not have rocked enough to justify the company's multiple. Now, the business is certainly a great longer-term play (at least until the current video-game cycle starts to wane), and the World of Warcraft online asset should be an incredible growth driver going forward, but on the short term, I have to say that traders need to be cautious. I see a bit more downside to the stock before it possibly recovers, which, at this time, I think it will.

Activision closed on its transaction with Vivendi Games Thursday and officially became Activision Blizzard (NASDAQ: ATVID), according to an article at SmartMoney.com. And I am pretty excited at the prospects for the new business (I am a shareholder). It's going to be a tough competitor against Electronic Arts (NASDAQ: ERTS) and Take-Two Interactive (NASDAQ: TTWO). (Of course, the latter two might merge at some point.)

Activision is riding high with its Guitar Hero franchise, and Vivendi Games brings an incredible asset to the table in the form of online gaming sensation World of Warcraft. I can't say I know much about World of Warcraft the game itself, but I know it has a huge following. What else do I need to know, right? For 2009, management at Activision Blizzard expects pro-forma operating income of over $1 billion and perhaps $1.20 or more in terms of earnings per share. That puts the stock, which rose over 5% on Thursday and closed with a price of $31.77 per share, with a P/E ratio a little over 26. That isn't too bad a valuation considering the growth potential. And when the holiday season comes around, I'm sure people will still be buying the publisher's software for gifts, recession or not. Whether it's the Sony (NYSE: SNE) PlayStation 3, the Microsoft (NASDAQ: MSFT) Xbox 360, or the Nintendo (OTC: NTDOY) Wii, gamers will be buying the company's products for these platforms in droves.

The stock has retreated from the highs it reached back in June when I wrote about it, but I am still bullish on the thesis here. Activision Blizzard should do really well, but with the markets in turmoil, you can probably wait for a pullback before buying.

Disclosure: I own Activision Blizzard; positions can change at any time.

By some estimates, the economy of World of Warcraft is worth $200 million, while Second Life's economy has been recently valued at $64 million. Everquest generates so much in the way of economic value that its GDP has been rated at around $2600 per capita. Lots of that value comes from real-life buying and selling of virtual-life assets, like skills and items for characters, or the characters themselves. Many gaming aficionados make a modest living doing just that -- the IRS has even opined on the subject, so it must be worth something.

Wherever that economy takes place, it won't be on eBay anymore. Starting this week, eBay Inc. (NASDAQ:EBAY) has been delisting auctions for virtual property, in a move that many say is a ploy to avoid legal battles with the games' owners. They're using the IP excuse: the auction site already has a policy in place that sellers can't trade in a product unless he is "the owner of the underlying intellectual property, or authorized to distribute it by the intellectual property owner." While game players may be in possession of a certain skill, or have spent their good money and countless hours to develop a character, they don't "own" that in the legal sense -- all the IP rests with the company which created the game.

So auctions like this and this will soon be ended. Many game players don't seem too concerned, though; as Eliah Hecht says on WOW Insider, "all this will probably do is stop individual users from selling their accounts. Gold farmers, powerlevelers, and other secondary industries have their own sites, and presumably will not be hindered much by this." I'd love to have seen eBay's cost-benefit analysis on this one!