Electronic Arts (NASDAQ:ERTS) CFO Warren Jenson recently gave analysts an update on Thanksgiving Day fun at the Credit Suisse 2007 Annual Technology Conference. Apparently, the Black Friday weekend was a boon for the video game industry in general.

The good, the bad, and the same-old same-old
Jenson cautioned -- and there's good reason to be cautious -- that even this early in the holiday season it was a great weekend for hardware sales across all platforms. While he described Nintendo's (OTC BB: NTDOY.PK) Wii as still selling at a "torrid pace," he said the most impressive showing has been for Sony's (NYSE:SNE) PlayStation 3. I guess those frequent price cuts have worked. Also bear in mind that there's a short supply of Wii consoles, and who knows, some consumers might go with a PS3 if they can't find a Wii.

Jenson pointed out that even with the focus on the newer, more state-of-the-art PS3 model, Sony is doing well with its PSP and PS2 products. He also mentioned trends across the board, which implies that Microsoft's (NASDAQ:MSFT) Xbox 360 continues to do well, but emphasized Sony's hardware. Given the fact that EA has stepped up its development for Wii, and has decent coverage across the platforms, it stands to reason that as long as hardware's selling well, that's good for EA.

Meanwhile, Jenson discussed the strength of some of EA's franchises' brands. Electronic Arts reduced the price on EA SPORTS to $29, and retailers have been using the promotion to help drive more customer traffic, some lowering the price even more. He said Wal-Mart (NYSE:WMT) alone sold more than 375,000 EA SPORTS for PS2 tiles on Black Friday.

Of course, Jenson also pointed to some disappointments, like Hellgate London and Sim City Societies. And while he spoke very enthusiastically about quality and customer response to Skate and Rock Band (the latter of which is done in partnership with Viacom's (NYSE:VIA) MTV), it's hard to get past the idea that both those games are simply knock-offs of popular Activision (NASDAQ:ATVI) franchises Tony Hawk and Guitar Hero. (Activision recently increased its sales guidance on the resounding success of Guitar Hero III's recent launch.)

A bright future, but is it now?
Jenson talked about exciting opportunities for the industry, particularly for publishers. For example, the idea of user-generated content in gaming, and that gaming communities become social networks. He mentioned The Sims as an example.

The acquisition of BioWare and Pandemic will add 10 new franchises over the coming years. Jenson added that EA's long-term deal with Hasbro will allow the publisher to bring more casual games to consoles, PCs, and cell phones, which should continue to bring more and more people into the fold beyond hardcore gamers.

The impact of Moore's Law and increasing online connectivity in gaming means that technology is supplies more and more opportunities for creating games. Jenson described the industry as being in the midst of a rapid global transformation. The latest interesting innovations that should come to the gaming universe (and virtual universes), are micro-transactions, peer-to-peer content exchanges, and in-game advertising.

Bear in mind, though, that EA CEO John Riccitiello recently shot down analysts' prognostications for near-term in-game revenues, stating, "You can't be as bullish as analysts are on in-game advertising and be sane," according to Dow Jones Newswires.

The game industry has a bright future, and if I were to look at investing in a game publisher, I'd consider either EA or Activision -- they are the leaders.

On the other hand, EA has been treading water (or pressing pause). It's put too much emphasis on tried-and-true or near-copycat franchises, and some of its newer games seem to take forever to come out (both Warhammer and Spore have had significant launch delays). So it's not a stock I feel particularly rushed to own at the moment.     

Electronic Arts, Activision, and Nintendo are Motley Fool Stock Advisor picks. Microsoft and Wal-Mart are Motley Fool Inside Value recommendations. Try either newsletter free for 30 days of unlimited play.

Alyce Lomax does not own shares of any of the companies mentioned. The Motley Fool has a disclosure policy that's ready to whip out game controllers.