"We believe the footprint of next-gen hardware (over 30 million units today) can drive sustainable software growth in '15 and '16," wrote Piper Jaffray analyst Michael Olson in a research note Tuesday. Plus, developers have enough experience with the new hardware to make higher-quality games for those systems. Now the installed base of current-generation systems - Xbox One, PS4 and Nintendo's ( NTDOY) Wii U - has reached a critical mass for software publishers.
The change created difficulties for software publishers, which had to balance making games for new systems and serving the large, installed base of prior-generation consoles. The release of next-generation video game consoles, most notably Microsoft's ( MSFT) Xbox One and Sony's ( SNE) PlayStation 4 in November 2013, led to a consumer shift to spending on hardware instead of software. Activision and EA are among the companies headlining the annual E3 trade show, which runs Tuesday to Thursday in Los Angeles. 4 spot among the 197 industry groups that IBD tracks. Top publishers like Activision Blizzard ( ATVI) and Electronic Arts ( EA) have helped lift the video game software sector to the No. Leading publicly traded game companies have seen their stocks rally as the console upgrade cycle hits its sweet spot. E3 2015 Video Game News: Games, Accessories, Trailers & Trends This year's Electronic Entertainment Expo, better known as E3, comes at an auspicious time for the video game industry.
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