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Back to School: Gaming Through School

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Young folks everywhere are feeling that little depressing sensation in the pit of their stomachs. Yep, it's time again for summer to end and school to begin.

It's not so bad; learning is awesome. But video games are awesome, too. In fact, kids everywhere are probably enjoying some last-minute gaming bouts before the dreaded homework sessions settle in.

I played my old Nintendo Entertainment System and Sega Genesis console through college. I'm old school to the core, more at home with blocky 2-D sprites as opposed to the incredible 3-D stuff seen on the new Sony (NYSE: SNE  ) and Microsoft (Nasdaq: MSFT  ) systems. I also enjoyed games on my Atari 800XL -- think War Games-type hardware -- and I tried my best to learn to program my own games with BASIC. Alas, I failed at that quest. The world has moved on, however. Gone are the vector-graphic displays of Asteroids and the low-quality synthesized voice from Berzerk that would taunt me: "Chicken! Fight like a robot."

What does the landscape look like now? Technology's come a long, long way, and games are more like interactive movies. Here are three companies leading the charge: Activision (Nasdaq: ATVI  ) , THQ (Nasdaq: THQI  ) , and Nintendo (OTC BB: NTDOY.PK).

At the head of the class is Activision. Sure, it doesn't have the Madden franchise that Electronic Arts (Nasdaq: ERTS  ) does, but it has plenty of others -- Guitar Hero, Call of Duty, and titles based on skateboarding deity Tony Hawk -- that rule the roost. New versions of these series will bring in the bucks come the holiday season.

I confess I've got a soft spot in my heart for Activision. I grew up on this company's games for the Atari 2600; Pitfall! was a great cartridge, as were Stampede and Starmaster. Programmers like David Crane and Alan Miller were ahead of their time, and they crunched 2600 code like it was going out of style. Activision may no longer have one-person development teams, but it still produces top-notch software.

THQ is not to be underestimated. It has a prosperous licensing program with Viacom's Nickelodeon characters and Disney's (NYSE: DIS  ) Pixar titles. It also has some valuable original properties, such as Saint's Row and Destroy All Humans! Don't think it's only young kids who play those SpongeBob games; I'd be willing to bet that not a few students will be holed up in the dorms playing a few of THQ's Nick titles as opposed to doing what they ought to be doing -- studying for a physics quiz. Hey, what's more important -- figuring out the finer points of Schrodinger's equation, or getting SpongeBob SquarePants away from a mutant Krabby Patty?

Investing in publishers is a great way to make money from the video game industry, and you should definitely consider Nintendo for your portfolio. Every kid on the block will need a Nintendo Wii for winding down after a rough day at school. Hands down, the Wii and the Nintendo DS are flying off the shelves faster than their console colleagues, and consumers are snapping up a lot of software to go with them (if they can find it). The Wii is attracting casual gamers like crazy, and it's bringing in a lot of female players. I imagine a lot of school romances will begin with a session of Mario Party 8.

While everyone is thinking wireless these days, I fondly look back on my old Atari joysticks and paddle controls. Some things have changed, but one thing's for sure -- students everywhere should study companies like these and see whether they are appropriate for their investment portfolios.

Brush up on your Foolish knowledge of video games:

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