The video game industry has taken a hit as layoffs have affected multiple companies. Video game stocks like Electronic Arts (EA) and Take-Two Interactive (TTWO) remain down year-to-date, but is there optimism on the horizon for the industry?

Wedbush Securities Managing Director Michael Pachter joins Yahoo Finance to give insight into the health of the gaming industry and what investors need to know when adding gaming picks to their portfolios.

Pachter explains why Ubisoft (UBI.PA) is a Wedbush top pick in the gaming sector: "In that Activision-Microsoft (MSFT) merger, the UK regulators kind of stuck their nose in the middle of all of it, forced Activision to sell the global streaming rights to its content to somebody else and Ubisoft stepped in and astutely bought up those assets for not very much money. I think they're going to get big checks from Microsoft, growing every year for the next several years."

For more expert insight and the latest market action, click here to watch this full episode.

This post was written by Nicholas Jacobino