As has been well documented at this point, video game publishers are currently dealing with a particularly nasty console transition. The majority of video game companies have seen their stock take a dip over the last 6-12 months, and according to an article in The New York Times, since May 1, the four major publicly traded game publishers have lost a collective $6 billion in market capitalization (about a 25 percent drop), compared to declines of 8.3 percent for the Nasdaq and 4.2 percent for the Standard & Poor's 500-stock index.

Unlike other entertainment industries, the video game business is unique in that it historically has had a slow period followed by a boom because new hardware emerges every 3-5 years. And it's that forecasted boom that has Activision chief executive Bobby Kotick so optimistic about the industry and his company.

"More people are playing games than ever before," he told The New York Times recently. "People who were in their teens in the 80's are now playing games with their kids. When I look at the next 10 years as compared to the past 10 years, I just see better prospects."

Kotick added that publishers ultimately have more opportunities to succeed by supporting multiple consoles, devices and handhelds. Furthermore, the likely consolidation of smaller publishers in the industry could leave a bigger piece of the pie for the remaining companies to gobble up.

However, because costs of development on next-gen platforms are going to hit $10 - $15 million or more, Kotick also sees the industry focusing on games with hit potential (those that could sell a million or more copies) rather than pumping out many more titles that may not perform as well commercially. He's previously spoken about how Activision specifically will focus on proven franchises.

Interestingly, while online features and downloadable content may lead to some added revenue opportunities for publishers, Kotick doesn't believe the impact of digital distribution will be felt for a very long time, which is in stark contrast to the views of Alsop Louie Partners, which thinks digital distribution represents the next billion dollar video game opportunity.

"The idea of full downloadable games is so far in the future that it's almost incomprehensible as an opportunity," remarked Kotick.

The full Times article, which goes into more detail on game makers' sinking stock prices, can be read here.