Competition is a pillar of capitalism. It stimulates innovation and drives down prices, giving consumers like you and me better products at a lower cost.

That’s why we all freak out when we hear about giant coroporations gobbling up the little guys who, if left unchecked, could threaten their profit margins down the road. Industry leaders don’t typically care for competition—and why would they? They have nothing to gain and everything to lose.

In the video game industry, there are a handful of clear-cut leaders. In terms of hardware, Nintendo is killing the other guys with their through-the-roof Wii and DS sales. This trend will continue until someone else puts out a better product, or at least until consumers realize how few good games are available for the Wii.

As for software publishing, the giants are Electronic Arts and Activision. They’re both huge and getting bigger. Activision merged with Vivendi in December, and EA is currently looking to absorb Take-Two Interactive, a subsidiary of which produces the best-selling “Grand Theft Auto” franchise.

So, is this a good thing or a bad thing? Assuming you’re not a shareholder in either company, it depends. At least in the short term, it largely depends on whether you look at the situation from the perspective of a gamer or from the perspective of a capitalist. Unfortunately, we’re both.

Stephen and I discuss the ramifications of EA’s takeover bid—along with sundry other news items—on this week’s Spudcast. We were joined in the studio by Tribune photographer Kelvin Ma—not because he’s an expert on economic theory or anything, just because we were going to the Rays game together right after the show.

Check it out here:

Couch Potatoes, Episode 33 [link]

Of course, you can download the MP3 directly from the link above, or subscribe via iTunes by clicking on the logo on the left side of this page.

Oh, and next episode: “GTA IV”!