Video game stocks are in the news for all the wrong reasons: Their recent decline is being attributed to concern that the industry is about to be hit by a backlash associated with the mass shooting of schoolchildren in Newtown, Connecticut, last week.
From Bloomberg News: "A bill introduced yesterday by U.S. Senator Jay Rockefeller directs the National Academy of Sciences to examine whether violent games and programs lead children to act aggressively, the West Virginia Democrat said in a statement. He will also press the Federal Trade Commission and Federal Communications Commission to expand their studies. The advocacy group Common Sense Media cheered the moves."
Bloomberg then notes that share prices for game makers Electronic Arts Inc. and Take-Two Interactive Software Inc. have been falling in recent days, along with the video-game retail chain GameStop Corp.
Who knows? Maybe investors have been scared off these stocks with the concern that violent video game sales will be hurt during the holiday season, as parents turn to gifts of a more wholesome nature. The unfortunate part of this concern, though, is that any focus on violent video games as a source of aggression detracts from the far-more urgent focus on a far-more dangerous pastime: Guns.
The other thing to consider is that video game makers had been suffering long before last Friday's mass shooting, which suggests that the latest retreat in share prices might not be related to concerns about a backlash against violent games. Electronic Arts has fallen 32 per cent this year, Take-Two Interactive Software has fallen nearly 14 per cent and Activision Blizzard Inc. has fallen more than 12 per cent.
While hit games continue to sell an amazing number of copies, the gaming industry is suffering overall, with layoffs and company closures. Industry researcher NPD Group reported earlier this month that U.S. spending on games, hardware and accessories fell 11 per cent in November over last year.
With share prices struggling, the culprit might be more than a sudden concern about gaming violence.