Citi Investment Research, comprised of 390 analysts across 22 countries, has begun coverage of the videogame software sector.
Analyst Brent Thill began his coverage of the four largest US publishers--EA, Activision, Take-Two, and THQ--with bullish ratings on EA and Activision, according to an AP report.
"ERTS is the 800-pound gorilla in the USD 50 billion a year interactive entertainment industry," Thill wrote.
While noting that EA has been in a slump, the analyst attributed part of the problem to the transition to the latest generation of gaming consoles.
Thill noted that Activision had proven "particularly adpet at building brands through wise capital investments." He said that the company had the strongest holiday line-up among the top four publishers.
The analyst's recommendations for Take-Two and THQ were less bullish.
"With its troubled history and recent management turnover, we regard TTWO as a wait-and-see stock," he said. As for THQ, "we prefer other publishers at this point in the console cycle with greater core-gamer revenue concentration," Thill said.
Overall, Thill felt that the industry's long-term prospects were bright, pointing to Halo 3's USD 300 million first-week sales, Steven Spielberg's involvement in game production, and the interest of major global media companies such as Viacom.