Activision-Blizzard is the "Best Way to Play" the Video Game Sector, Deutsche Bank Reports

“Given our expectations of declining packaged goods software sales through 2011, we recommend Activision-Blizzard (NASDAQ: ATVI) as the best way to play the sector, since over 50% of its profits come from Blizzard,” Deutsche Bank reports.

“Furthermore, the co. looks to be the best positioned with fewer titles to manage in a digital transition (the issue being limited social/mobile/casual presence),” Deutsche Bank writes. “Meanwhile, we think EA (NASDAQ: ERTS) has significant share price downside as the co. struggles to scale profits due to too many titles, high expense structure, and valuation.”

Activision-Blizzard closed Monday at $11.46; Electronic Arts closed at $22.79.