Activision (NASDAQ:ATVI) may not have blown people away with its fiscal second-quarter results, but it's anything but "game over" for the video-game publisher.

The company, which works within a very cyclical industry, swung to a second-quarter profit, with net income of $0.7 million, or break-even earnings per share. Excluding compensation expenses, it earned $4.9 million, or $0.02 per share. That stacks up against a net loss of $21.3 million, or $0.08 per share, this time last year. Activision's revenues increased 69% to $317.7 million. (Grab the cheat codes of the previous quarter by reading our earnings take.)

Activision raised its fiscal 2008 guidance to revenues of $2.07 billion and earnings of $0.55 per share, excluding compensation expense. Activision also boasted of its successful launch of Guitar Hero III: Legends of Rock, which has generated more than $115 million in sales in its first week. Although rival Electronic Arts (NASDAQ:ERTS) plans to launch its own answer to that rock-oriented game this month, Activision's had the franchise as a blockbuster hit for quite some time. This week's episode of Viacom's (NYSE:VIA) Comedy Central's South Park, which apparently touches on Guitar Hero, might help seal the deal when it comes to the sequel's success, too. (South Park has been right on the trends in video games here lately; previous episodes centered on World of Warcraft addiction, as well as relentless obsession for Nintendo's Wii.)

It's good to be the leaders in a hot industry; Electronic Arts reported a decent quarter, too, according to longtime Fool Rick Munarriz, and is surely better positioned now that it's caught up with titles for the Wii for the holiday season. Both Electronic Arts and Activision have been recommended by David Gardner for Motley Fool Stock Advisor, and part of the investment thesis has touched on their roles as industry leaders.

Speaking of which, some other video-game companies don't seem as strong right now. Midway (NYSE:MWY) recently reported a wider third-quarter loss and lowered its outlook for the year. THQ (NASDAQ:THQI) also reported a second-quarter loss and lower sales and previously lowered its outlook (although Fool contributor Steven Mallas didn't think THQ's outlook looked all that bad at the time). The lowered outlooks are partially related to game delays at both companies, something that peer Take-Two (NASDAQ:TTWO) is familiar with.

It's admittedly a bit disappointing that Activision's strong sales didn't translate into higher profits. However, Activision's strong position in the industry gives me the distinct impression that despite any near-term negativity, this stock's still got game for the long term.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.