In the same visit I did to check the availability of Apple products, I check the aisle of video games. For the last few months, I have the consistent feeling that this aisle is deserted, unattended, and unimportant to the retailer (again, this is the biggest retailer in Canada). I can’t remember when was the last time when I saw an important new game being released (on any platform). I also see that the aisle has almost 50% less games than before (they’re displaying other products in places where games used to be displayed), and the variety of games is very little. Are people losing interest in video games in general, favoring flash games such as those made by Zynga? Is the video game industry, in general, slacking? Could this be related to the decreased consumer spending and the lack of investment in new products?

I’ve also noticed that all the consoles are in stock, and they are abundant. They have a lot of PS3s, a lot of WIIs (which were very hard to get a few months ago), a lot of XBOXes, and they all have a special bundle on them (for example, a free game) in order to attract customers.

Google trends support my theory: See how the attention to PS3, WII, and XBOX is lower (not significantly, but enough to raise some eyebrows) than a year ago.

Additionally, all these manufacturers are increasingly exposed to the inflation in the China, and the increase of cost of Chinese labor. On the flip side, the cost of technology is reduced with time, so they might even out each other, but again, this is a huge concern.

Stocks that are directly affected by Video Games are: GME, MSFT, SNE, NTDOY (PINK). In my opinion, the stock mostly reflecting this situation is that of Nintendo, it is down 12% in the last 3 months. All of these companies, especially GME, are excellent companies with good balance sheets, but they’re selling/producing things that the mainstream market is no longer very interested in. People now are socializing more, and playing less…