Gaming Stocks Slump On Potential Threat From Verizon (VZ), AT&T (T), and Time Warner (TWC) - Electronic Arts, THQI, ATVI, TTWO

Verizon Communications Inc.(NYSE:VZ), AT&T Inc.(NYSE:T), and Time Warner Cable Inc(NYSE:TWC) are pulling out all stops to ensure that video games can be delivered directly to TV screens. According to sources, trials are due to begin later this year, so that the test phase passes smoothly and all glitches can be sorted out.

If this venture succeeds, then traditional consoles such as the PlayStation, Wii and Xbox, will face immense competition and most likely cut into their profits as well. Users will be able to play with the aid of generic controllers connected to their set-top box or TV.

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Recent statistics have revealed that video-game hardware sales have come down by 39% last month as compared to what it was a year back Atul Bagga, a video-games analyst at Lazard Capital, states that carriers are now viewing TV gaming as a lucrative method to monetize their users because every other person owns a TV nowadays.

The nature of gaming will also change by moving away from “Tetris” and “Solitaire” and giving users more action-packed games that uses the most advanced technology. Playcast Media Systems, CiiNOW, and Agawi have been approached to provide software for increase delivery speed of real-time gaming. Apart from that, carriers also need to include compatible graphics processors into their data centers, in place of chips used in consoles.

The real challenge comes in executing the cloud gaming concept. Nvidia, a company that manufactures graphics processors has been working hard to provide suitable technology for such games, which the carriers can use. Tony Tamasi, a senior vice president, states that a compatible combination of software and hardware is what they are aiming for.

Game publishers are eager to invest in cloud gaming as they will be able to cut costs by developing for a single platform rather than manufacturing one for each console. Playcast has reportedly struck a deal with CJ Hellovision to provide this service to 3.51 million subscribers. CiiNOW has followed suit and will collaborate with carriers for its 4^th run in Europe.

Shares of Electronic Arts Inc.(NASDAQ:EA) slumped 4.70% to $12.68 followed by THQ Inc.(NASDAQ:THQI) -0.10 (-2.44%), Activision Blizzard, Inc.(NASDAQ:ATVI) -0.41 (-3.44%) and Take-Two Interactive Software, Inc.(NASDAQ:TTWO) -0.29 (-2.70%).

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