Games Biz Weathers Wall Street Chaos
Yesterday the Dow Jones saw its worst point drop in history, losing about 7% of its total worth and sending financial markets into all kinds of mishegas while the NASDAQ lost 9% by falling 200 points. Yet games companies took less of a hit than other industries, showing that there's still plenty of money tied up in the industry machine - although given the cyclic nature of the games development cycle, I wouldn't necessarily look to today's numbers for a forecast... I'll be just as interested to see what investment decisions do or don't get made, and I would expect to see signs of financial concern amidst video game companies show up further downstream.
But in the short run, while Activision Blizzard lost the most ground - losing 13.8% or $2.26 per share, and high-trader EA lost $3.63 a share, or 9.16%, most game companies' losses were below the market average. THQ and Take-Two lost 7% and 4.5% respectively (although T2 closed at $15.43, a full $10 a share lower than EA's recently rebuffed bid of $25.74 a share).
Microsoft lost 8.72% and Sony just 5.09%, but despite all the losses the industry has an edge on the rest of the economy, according to perennial truth-man, Wedbush Morgan analyst Michael Pachter:
"There really is no impact... nobody's running out of money,""Pretty much everything is going to get made as-is and sold... I don't see a global recession impacting games much."
Other analysts have gone so far as to suggest that the games industry will continue to grow and may even enjoy a "cocooning" effect that sees retailers increase their focus on "better cost-per-hour" items such as video games, compared to other media. That's a fair bet, as a $60 Blu-ray almost certainly won't give you as many hours of entertainment as your average game.
Analysts: Game Biz Sustains Even As Stocks Fall [Gamasutra]
tiny dancer
Posted to Hot Stuff, Miscellany on 30 September 2008
· Comments (1)
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60 dollar blu-ray? Where are you shopping? I've been seeing more in the 20-30 dollar range.
But, still, 2 hours at 20 to 30 dollars vs. 6 to 40 hours at 20 to 60 dollars... The utilitarian calculus does not lie.