Zumba Created These Great Legs

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Majesco Entertainment (NAS: COOL) used to be the frumpy kid in the corner of the gaming industry ball. The cool kids including Activision-Blizzard (NAS: ATVI) , Electronic Arts (NAS: ERTS) , and Take-Two Interactive (NAS: TTWO) were having a blast with their big-budget war simulations, sports games, and 3-D action titles, while Majesco could only play with its Cooking Mama franchise and hope for the occasional movie license tie-in.

But then Majesco signed up for an exercise program called Zumba Fitness. My, how the tables turned.

That frumpy wallflower has earned its cool ticker thanks to Zumba. Over the past year, Majesco shares have more than doubled while Take-Two saw a still-respectable but smaller 41% gain and EA rose by 39%. Meanwhile, Activision and its library of intense action and MMORPG games have barely kept up with the Dow Jones (INDEX: ^DJI) at 9.5%.

Body-moving games are all the rage now. Zumba has been the second-biggest Wii title not published by Nintendo (OTC: NTDOY) for 10 months straight, according to Majesco CEO Jesse Sutton. That streak stretches all the way back to the title's original release date. The title that keeps beating Zumba in the Wii charts? Ubisoft's hip-swingin' Just Dance 2, of course.

Thanks to Zumba, Majesco just reported a modest $0.05 net profit per share even in a seasonally challenged quarter. A year ago, the company lost $0.04 per share, and revenue jumped 61% year over year to $19.5 million.

Looking ahead, there's a Zumba sequel slated for the holidays. Majesco is also capitalizing on its newfound success by expanding last year's "four or five key titles" for the crucial holiday season into a meaty slate of 10 new games.

Majesco's sales are on the rise, margins are getting wider, and the company has big plans for the future. This little upstart might never overtake giants like EA and Activision, but nobody except maybe mobile-gaming specialistGlu Mobile (NAS: GLUU) is commanding the dance floor quite like Majesco right now.

The times, they are a-changing and Majesco is mastering the new environment on the fly. That's really the only way to stay strong when paradigms are shifting all around you. Learn all about a massive technology shift that's scaring the pants off Bill Gates in this free video report.

At the time this article was published Fool contributorAnders Bylundholds no position in any of the companies discussed here. The Motley Fool owns shares of Activision Blizzard and Take-Two Interactive Software. The Fool owns shares of and has written calls on Activision Blizzard.Motley Fool newsletter serviceshave recommended buying shares of Take-Two Interactive Software, Nintendo, and Activision Blizzard.Motley Fool newsletter serviceshave recommended creating a synthetic long position in Activision Blizzard. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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