Shares in local video game developers lost ground Tuesday after an analyst said Activision Inc. gave a disappointing outlook for the crucial holiday quarter when it reported strong earnings Monday.

Doug Creutz, an analyst with Cowen and Co., said that while strong sales of the Santa Monica-based company’s “Guitar Hero” franchise boosted results for the quarter and helped Activision raised its outlook significantly, he was leery of Activation’s new optimism.

He wrote that investors should take profits now following the stock’s strong performance this fall.

Shares in Activision were down 2.8 percent Tuesday to $22.26 in afternoon trading on the Nasdaq. Shares in fellow game developer THQ Inc. also sank 2.9 percent to $29.62 Tuesday after the company reported a loss Nov. 1 but also projected strong holiday sales.

Shares in Activision had gained nearly 17 percent during the end of October while shares in THQ gained nearly 10 percent during the same time.