Electronic Arts (NASDAQ: ERTS) issued Q4 and full-year numbers on Tuesday. The competitor of Activision (NASDAQ: ATVI), THQ (NASDAQ: THQI) and Take-Two Interactive (NASDAQ: TTWO) reported adjusted fourth-quarter revenues of $919 million, which was good for a 50% increase. Earnings per diluted share were $0.09 on an adjusted basis, also representing a 50% jump. For the full year, adjusted revenues jumped 30% to $4 billion and earnings per diluted share rose 36% to $1.06. Not too bad.

EA, according to Briefing.com, also beat Wall Street's expectations by quite a bit. EA was forecast to only break-even on a non-GAAP basis, so the difference was a nice $0.09. In terms of operational cash flow, EA increased the metric by 33% during the fourth quarter, but for the full year, operational cash flow decreased 15%. Ah, such is life, I guess. Nevertheless, EA produced 27 titles that sold over a million units this year -- three more than in the previous year. Fifteen of its titles sold over 2 million units -- five more than the last fiscal period. Titles such as Army of Two and Rock Band, as well as various sports franchises, drove the results.

Things sound pretty good, don't they? EA is definitely a major force on the Sony (NYSE: SNE) PlayStation, Microsoft (NASDAQ: MSFT) Xbox 360 and Nintendo (OTC: NTDOY) Wii platforms. But EA has had some challenges during this console cycle, and there is the perception that it needs a major merger to combat the threat posed by the Activision and Vivendi Games transaction. And let's not forget that Activision is on fire all on its own. That's what the whole attempted takeover of Take-Two is all about.

I really want to turn bullish on Midway Games Inc. (NYSE: MWY), but there's no way I can do that right now. The company's stock is below $3 a share, and it's there for a reason. But, let's first look at a couple positives from the software publisher's latest earnings release. Net revenues shot up 170% to $29.9 million in Q1; that beat expectations, according to Briefing.com. And the net loss per share also beat expectations by a penny -- it came in at $0.29 per diluted share on an adjusted analysis.

But, that net loss is worse than the previous year's net loss of $0.20 per diluted share, also adjusted. Like I say, someday I want to report that Midway has turned the corner and is a buy. I simply can't do that, even though I recently bought the publisher's catalog title Rampage: Total Destruction for the Nintendo Gamecube and am having a great time with it -- guess it goes to show that you can't always judge a company's stock by the fact that you enjoy its products. One thing that Midway needs to do is perhaps seek some synergy from Viacom, Inc. (NYSE: VIA)'s MTV and Nickelodeon channels. Sumner Redstone is, after all, the controlling shareholder of Midway. Granted, THQ Inc. (NASDAQ: THQI) deals with the Nickelodeon characters at the moment, but in the future, Redstone needs to figure out a way to use his media assets to promote Midway and perhaps funnel some licensing deals to the publisher. MTV is certainly doing well with its own video-game ambitions via Rock Band, which is sold by Electronic Arts Inc. (NASDAQ: ERTS).

One thing I must point out is that, since my last article about Midway, the stock is up. This was mentioned to me by a reader. So, in objective trading terms, if you went against my opinion, you would have made money, no question. However, I have to stick to my guns and say that I personally wouldn't play the volatility in Midway's shares. Yes, you could luck out with it, maybe Redstone will come along one day and buy out the remaining shares at a big premium (doubtful, at least the big-premium part). I wouldn't want to speculate on such an outcome; I am still content with my Activision, Inc. (NASDAQ: ATVI) shares as a way to play video-game investing.

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

Remember Motley Crue? They were a popular hair band in the 1980s, and they're still around today. In fact, in an effort to remain cool, the Crue will be releasing its new single on the Rock Band video game platform. Rock Band comes courtesy of Electronic Arts Inc. (NASDAQ: ERTS) and Viacom, Inc. (NYSE: VIA), the latter being the owner of developer Harmonix. It is also the competing music game to Activision, Inc. (NASDAQ: ATVI)'s Guitar Hero franchise.

I'm an Activision shareholder, and I'm always watching for signs that the Guitar Hero phenomenon might be on its way out. No, I haven't seen any convincing ones yet, but since Reuters made a mention of this Crue deal, it caught my attention. As one might imagine, I would have preferred to have seen Crue release the song through Guitar Hero, but whatever, guys, have a blast with the competition! (Yeah, I'm not bitter or anything). The Crue will also be promoting Rock Band while it's on tour, according to this press release.

So, users will be able to download the song, called Saints of Los Angeles, via the online stores of Sony Corporation (NYSE: SNE) and Microsoft Corporation (NASDAQ: MSFT). I wish Motley Crue luck with its EA-Viacom hookup, but I prefer playing the current music-video-game trends via Guitar Hero through my Activision shares, which are currently trading well above my cost basis. The shares haven't done much lately, but I'm not ready to sell just yet... rock on, Activision!

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

Electronic Arts Inc. (NASDAQ: ERTS) shares are trading higher today on a bunch of varied news items. First, the company announced a launch date for is popular "Rock Band" game for the Nintendo Wii. Second, the stock was added to Goldman Sachs Conviction Buy list. Lastly, the company's Chief Financial Officer Warren Jenson will resign at the end of the month. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ERTS.

After hitting a one-year high of $61.62 in October, the stock hit a one-year low of $43.62 in February. ERTS opened this morning at $50.33. So far today the stock has hit a low of $50.00 and a high of $51.08. As of 12:30, ERTS is trading at $50.31, up $0.62 (1.3%). The chart for ERTS looks neutral and improving, while S&P gives the stock a negative 2 STARS (out of 5) sell rating.

For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $40 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just two months as long as ERTS is above $40 at May expiration. Electronic Arts would have to fall by more than 20% before we would start to lose money.

If I had a dime for every time a person asked me "Is Rock Band ever coming out for the Nintendo (OTC: NTDOY) Wii?" I'd have more money than Electronic Arts (NASDAQ: ERTS) and Viacom (NYSE: VIA) combined. Seriously. Now, though, Wii fans can see the light at the end of the tunnel because Rock Band debuts on the popular platform on June 22 of this year. I don't think any gamer on the planet expected the title to not come out for the Wii.

Not only is this great news for Wii users, but it's also excellent information for shareholders of EA and Viacom. As Richard Driver pointed out, the game is a valuable asset for Viacom. EA benefits because Rock Band is the publisher's answer to Activision (NASDAQ: ATVI)'s Guitar Hero franchise. In fact, Nintendo really stands to benefit this summer from both Guitar Hero and Rock Band because a version of the former will be coming out for the Nintendo DS handheld. There's definitely going to be a rock rumble happening when the dog days are upon us, although I'd expect that Rock Band for the Wii will have a much bigger impact. That doesn't seem too hard to predict considering that music games of these types work better on consoles, in my opinion.

This is going to be one hell of a test for Activision, EA, Viacom and the Wii. Will users adopt Rock Band in droves? Will the Guitar Hero franchise be threatened? In theory, the Wii is a console for casual gamers who just like to play some tennis or a few of the extremely fun midway diversions that can be found in the awesome title Carnival Games -- will they go for something more expensive and more involved? My prediction -- Rock Band will be a hit, but it won't sell a ton of units until the holiday shopping season is upon us. Can't wait to see what happens come June. Till then, rock on, my friends!

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

MTV, a part of Viacom, Inc. (NYSE: VIA), revealed to Billboard Thursday that the digital stores for the popular video game Rock Band saw the number of downloadable songs ("levels") more than double in the last two months. The more than 6 million downloads easily beats the 2.5 million that were purchased between the release of the game in November and when MTV last reported download figures in January.

In an effort to streamline the purchasing process, MTV will also be releasing a new software update to the game this week. The new update allows players to purchase downloadable songs from within the game itself, versus exiting the game and using the platform marketplaces. According to Billboard, "the new Rock Band Music Store feature instead allows gamers to browse, preview and purchase tracks through an interface included in the game" and "will be available as a free download later this week."

Rock Band has enjoyed quick success in the last four months, and with the large sales figures and new changes, the video game indicates a new market the music industry should be able to tap into. The online community within the game can only help spur greater sales as well, with players hoping to connect with new songs that can be added to the store and the game. Another doubled increase may be too much to look toward in the next period, but more growth is certainly bound to happen.

As I've said before, I love reading the monthly videogame sales stats from marketing research outfit NPD. February was yet another nice month for the industry. Software continues to move off retail shelves at a robust clip; sales in this department were up 47% year-over-year last month.

Activision (NASDAQ: ATVI) and its incredible Call of Duty 4 title -- yes, I am an Activision shareholder and will probably promote any of its games to my friends and acquaintances, but if you think I'm wrong on this one, go check it out for yourself, it does rule something fierce -- continued its reign at number one, selling 296,000 discs. Activision also did well with Guitar Hero III for the Nintendo (OTC: NTDOY) Wii, selling 222,000 copies of the game. Rock Band, the music game from Electronic Arts (NASDAQ: ERTS), did well on Microsoft's (NASDAQ: MSFT) Xbox 360 -- over 160,000 rockers heeded the call to play some classic tunes.

As one might expect, the Wii sold the most consoles in February. Sony (NYSE: SNE) came in second with its PlayStation 3 unit, and the Xbox 360 was third. Microsoft says a shortage of systems hurt the company; I don't doubt that claim, the 360 did seem a bit hard to come by at some retail channels last month. But it'll be back in competitive mode in the coming months, I'm sure, making certain that Sony doesn't rest on its laurels. I expect sales for software to continue doing well, and just wait till the next holiday season -- I agree, it's too early to be talking about that, but it'll be here before you know it., and I expect it will be another banner selling period. And I can't wait to see what software title will be on top for the current month -- Super Smash Bros. Brawl for the Wii came out this past Sunday, keep in mind. If you told me you haven't heard of this title, I'd be surprised -- it really was the story of the week (or, should that be wiik; stupid pun, gotcha). A couple of GameStop (NYSE: GME) locations in my area held some tournaments, and from what I heard, they were quite lively.

Disclosure: Steven Mallas owns shares of Activision; positions can change at any time.

Earlier in the week, CBS Corporation (NYSE: CBS) sent out its earnings broadcast. Now it's time for Viacom, Inc. (NYSE: VIA) to tell investors how things are doing. CBS and Viacom, as I'm sure you know, used to be part of the same media conglomerate, but they went their separate ways to see if being apart would help shareholder value. So it's always fun to compare the two when they release their numbers (check out Brent Archer's coverage of CBS' quarter and his feelings in terms of stock strategy).

For the fourth quarter, Viacom, which competes with companies like The Walt Disney Company (NYSE: DIS), News Corp. (NYSE: NWS), General Electric Company (NYSE: GE)'s media asset NBC Universal, and Time Warner (NYSE: TWX), was expected to earn $0.83 per share. Earnings from continuing operations came in at $0.83 per diluted share. That was quite a nice rise compared to the $0.69 per diluted share from continuing operations booked one year ago. Plus, the revenue increase for the current quarter was a nifty 19%. For the full year, earnings from continuing operations rose a more subdued 10% to $2.41 per diluted stub; this performance was accomplished on a revenue gain of 18%.

Both media networks -- Viacom owns the MTV suite of cable channels -- and filmed entertainment -- Viacom owns Paramount -- posted strong double-digit revenue gains for the quarter and year. Drivers included films by DreamWorks Animation SKG, Inc. (NYSE: DWA), which the company distributes -- those films would be Shrek the Third and Bee Movie. Also, Transformers helped to power results. Another product that tuned up the quarter was Rock Band. It was developed by Harmonix, which Viacom purchased for its MTV unit, and it is distributed by Electronic Arts (Nasdaq: ERTS). It's a rocking competitor to Activision's (Nasdaq: ATVI) Guitar Hero concept.

No doubt you have heard of the video game Guitar Hero, published by Activision, Inc. (NASDAQ: ATVI)? Or you may have heard about any of its sequels and competitors? After the massive release of the third incarnation of the game it gained a lot of buzz, and it brought in over $115 million during its first week of sales, moving 1.4 million copies across all platforms. Although not as impressive as the $170 million Halo 3 managed in September, this staggering figure is still impressive. It also begs the question of what a game like Guitar Hero can do not just for the video game industry, but also more importantly for the music industry.

Naturally, we could point to player's new familiarity with songs and hope that they will download the tracks or rush out and buy the CDs, but in the long term those effects are not as pivotal as other potential issues, namely players ability to actually play guitar. It seems to me, and I am sure this point has been brought up before, but if these players can only perform the instrument as a series of buttons that represent notes, what future does the music industry hold in terms of new artists further down the line, not to mention creativity?

These sentiments may be simplistic due to the rationale that there are many young and new guitarists not playing the video game, but the sales figures are staggering and I can guarantee you that it is not just gamers playing the controller-guitars. I for one am neither a gamer nor a guitar player, but I am enamored with both products, especially after I played the newest version with the Muse song "Knights of Cydonia." The difference for me seems to be the acknowledgment that I will never truly learn guitar, much less try to become famous for playing guitar.