Activision (ATVI) and Electronic Arts (ERTS) will regain their strength once again.  Once said to be recession proof stocks, they have rapidly dropped to 5-year lows and they have continued to get bad press for missing out on analysts estimates.  They still make a profit quarterly and will continue to make cash flow in the years ahead.  2010 looks to be a good year for their video games line-up.  I’m in it for the long-term and I will be patient to sell.

Activision is the best prospect to play the long-term.  After last week’s earnings release, their stock popped up 10%.  It went from $10 to $11 and many investors sold their gains.  I’m holding on.  They just released Starcraft II on beta and they expect a release in the summer time.  If anything, this is probably the best time to get in.  Starcraft I sold over 4 million copies in Korea alone.  It’s a game played globally for it’s great single-player and multi-player action.  They even have television channels made exclusively for the game.

Activision is also planning on releasing a few more big hits later this year such as another Call of Duty game.  The fan base for this first-person shooter will definitely be buying again for 2010 after seeing the showing for Modern Warfare 2.  Spider-Man and James Bond are going to have another video game release also.  There will also be a few Guitar Hero releases.

Have you heard of World of Warcraft?  NetEase.com (NTES), World of Warcraft’s china provider for MMOG, has been allowed to put their expansion Burning Crusade out to the public.  Last year, the government stopped WOW subscriptions since they needed better regulation.  This pretty much means the government wants a way to control a foreign commodity that has tons of potential in their market.  This had an immediate drop in the Activision price.  With the announcement of WOW subscriptions being allowed again, you can bet the profits will pick up for Activision.  Most people have not heard any news about this, but you will definitely see it with the earnings.

Electronic Arts (ERTS) has been on a bad streak for the past year.  They have lost profits and have given gloomy reports for the next quarters.  I think they are releasing estimates that are at the ‘worse-case’ scenarios.  This is especially since their line-up has been doing quite well recently.  Their Battlefield Bad Company II just broke the record for the most downloaded demos.  It has over 3.5 million downloads.  This will definitely be another big hit such as Activision’s Modern Warfare II.  They already have a hit with the release of Mass Effect 2.  It has glowing reviews and everyone who’s played it is hooked.  It hit second on the most sales for the January video game charts.

Another couple things to look forward to is Tiger Woods return back to golf and FIFA Online.  Tigers Woods should help get their golf game back to action.  I’m not too sure how they will monetize online soccer but I’m sure they have sponsors that will back this game and I doubt their are that many fees to hosting these servers if it does not follow through with success.

I think the worse case scenarios have already been priced in these two stocks and look to make some big cash with each.