Video Game Industry Investing

Shigeru Miyamoto is a rock star.

Fans sleep on the sidewalk for days just for a chance to meet him or get an autograph. A third of his peers list him as their “ultimate hero.” And when Miyamoto takes the stage, it’s to a chorus of cheers.

But Miyamoto isn’t a musician. He’s a video game designer.

In 1981, Miyamoto unleashed Donkey Kong upon the world. Not only did it make a century-old company a household name; it revolutionized an industry, taking it from the fringes to a $51 billion per year powerhouse.

Back when it first debuted, that game was considered a smash hit when it sold an unparalleled 65,000 units.

Of course, the days of teenagers hovering around bulky, coin-operated machines are ancient history. Now, 72% of people between the ages of 6 and 44 in the United States play video games.

This year, an average of 406 video games are being sold every minute. And the number of American households that play them is expected to increase to 80% by year-end 2012. By 2014, the video game industry is projected to be three times the size of the music industry, raking in some $84 billion per year.

Sound unbelievable?

Consider that opening days for video game launches routinely obliterate anything that Hollywood could ever dream of producing.

For example, the third installment of the Twilight saga, Eclipse, set box office records by grossing $30 million on opening day midnight screenings.

But in November 2009, in the first 24 hours of its release, Activision Blizzard Inc.’s (Nasdaq: ATVI) Call of Duty: Modern Warfare 2 totaled $310 million in sales in just the U.S and the U.K.

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