ThinkEquity has said that Activision Blizzard, Electronic Arts, Take-Two Interactive and Changyou.com are its top gaming stock picks for 2011.

Activision Blizzard, Inc. (NASDAQ: ATVI): In the near term, the brokerage is optimistic about the company's prospects, given a stronger-than-expected performance of Call of Duty: Black Ops in the fourth quarter of 2010.

More importantly, Activision has the ability to grow its higher-quality (higher margin and better predictability) annuity income through growth in World of Warcraft, new business model for Starcraft 2 and Call of Duty franchise and potential upside from monetization of the Battle.net platform.

Take-Two Interactive Software (NASDAQ: TTWO): The brokerage said it is optimistic around the company's pipeline for calendar 2011 and 2012 (Max Payne III, LA Noire, Duke Nukem Forever,XCOM, Bio Shock Infinite, Agent).

More importantly, ThinkEquity analysts expect the company to launch the next version of Grand Theft Auto sometime early 2012 and would expect to see the announcement sometime in mid-calendar year 2011. In addition, it expects the margins to expand from 2012 after the expiry of major league baseball (MLB) contract, which could drive a positive impact of 30 cents to earnings per share.

Electronic Arts, Inc. (NASDAQ: ERTS): The brokerage remains optimistic on the company's prospects for fiscal 2012, driven by growth in the company's digital revenue, underscored by Star Wars: The Old Republic and by monetizing the existing IPs on the new platforms (online, social, and mobile).

It expects that lucrative digital revenue will contribute 23 percent of revenue in fiscal 2012, up from 14 percent in fiscal 2010 and, consequently, drive 21 percent year-over-year earnings per share growth.

We believe that the company has an opportunity to expand margin through Star Wars MMO. Most of the development costs relating to the title have been written off (although the title is not yet launched) and, therefore, a majority of revenue contribution could help expand operating margins, the analysts said.

Changyou.com Ltd. (NASDAQ: CYOU): The brokerage said it continues to believe that Changyou.com is one of the best-positioned companies in the Chinese gaming space, driven by its strong game development capabilities and strong platform (through SOHU).

ThinkEquity said its industry contacts suggest that Duke of Mount Deer (DMD) game is shaping up well and believe that the title could outperform the brokerage's and Street expectations. The brokerage also believes Tian Long Ba Bu (TLBB) game growth momentum could be sustained, driven by the increasing usage, largely from the new Internet users in the lower-tier cities, and by improved monetization.

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