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8. Dead Space 3 Publisher: Electronic Arts Developer: Visceral Games For: Xbox 360, PlayStation 3, PC

By the looks of it, investors love the idea of a new gaming console from Sony Corp. – but it sounds more like the triumph of hope over experience.

Sony has something big to say in New York on Wednesday evening, and observers are expecting an announcement of the much-anticipated PlayStation 4, the company's first major upgrade in about seven years.

According to Barron's Stocks To Watch Today, a new round of consoles from Sony and Microsoft Corp. – which is expected to launch its own new console mid-year – are "important to the entire video game ecosystem, from game developers to retailers."

The market certainly agrees. Sony shares are up 30 per cent this year, and publicly traded game makers have seen similar gains: Electronic Arts Inc. is up 21 per cent, Activision Blizzard Inc. is up 35 per cent and Take-Two Interactive Software Inc. is up 40 per cent.

To be fair, some of these gains follow a sell-off at the end of the year, when the National Rifle Association tried to blame the mass shooting of schoolchildren in Connecticut to violent video games. As well, some gains followed better-than-expected quarterly results, particularly from Take-Two.

However, the recent enthusiasm seems out of place next to some of the broader concerns weighing on the gaming industry: Sales have struggled. In Canada, sales fell 19 per cent in 2012 over the previous year, in dollar terms. In the U.S., game sales fell 22 per cent in 2012 and hardware sales fell 27 per cent, according to NPD.

Falling hardware prices have fed some of the declines – but so too has the trend of playing games on mobile devices, leaving gaming consoles look a bit dated. Indeed, for all the rallying this year, Sony's share price is down 67 per cent from its last PlayStation launch, and Electronic Arts is down 70 per cent.

Will new hardware mark a shift? Barron's reproduced a chart from analyst Doug Creutz at Cowen, showing that video game stocks have outperformed the S&P 500 by an average of 57 per cent in the 12 months leading up to a hardware launch.

The idea here is that consumers are excited about new-generation consoles and the games that feed them, leading to a fresh cycle of consumption. But previous consoles have been launched into a relatively healthy market, where consoles ruled. Today, that's not the case.