Valve, a PC gaming company, is planning its own entrance into the console market with its Steam Box. Valve’s CEO Gabe Newell said he feared Apple Inc. (NASDAQ:AAPL) more than the console guys when it came to competing in the living room.
Apple has shown interest in getting more into gaming. The next version of iOS will support third-party controllers, and there are rumors that Apple is working on its own gaming controller.
The promise of NVIDIA’s Tegra chips
With controllers out of the way, the next issue is power. Surprisingly, mobile-based consoles could be much more powerful than one could imagine.
NVIDIA Corporation (NASDAQ:NVDA)’s Tegra 4 mobile chip is already capable of outputting graphics nearly on par with today’s consoles, and NVIDIA Corporation (NASDAQ:NVDA) has promised that next year’s chip (the Tegra 5) will surpass them.
Given that consoles are refreshed only every seven years or so, it seems likely that mobile chips will offer more power than the Xbox One and PlayStation 4 just a few years into their lifecycle.
NVIDIA Corporation (NASDAQ:NVDA) has always been tied to the gaming industry — its graphics cards a necessary component to any gaming-quality PC. But the company is betting big on Android.
Its upcoming handheld console, the NVIDIA SHIELD, will run Google’s mobile OS. In an interview with Forbes, the company said it’s investing heavily in Android gaming, and that it sees the platform as a dominant one in the video game landscape going forward.
Investing in Activision
In recent years, Activision has been one of the best run gaming companies in the world. Its CEO, Bobby Kotick, has smartly steered the company away from unproven business models, and has delivered consistent performance quarter after quarter.
But sticking to the tried-and-true gaming paradigm of PC and consoles could come back to haunt the company. As with phones, Apple and Google could be about to revolutionize the gaming industry in the coming years, bringing mobile games to the living room via dedicated consoles or television sets.
This trend remains in its infancy, but it’s one Activision Blizzard, Inc. (NASDAQ:ATVI) investors should definitely keep their eyes on.
The article There Are Over 100 Million Reasons to Doubt Activision Blizzard originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.
Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard, Apple, Google, and NVIDIA. The Motley Fool owns shares of Activision Blizzard, Apple, and Google. Salvatore “Sam” is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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