Though the US economy has been listing during 2008, analysts have been touting game stocks as a safe bet. In a May online column for the financial weekly Barron's, Signal Hill Capital Group Senior analyst Todd Greenwald called the game industry "virtually recession-proof." In a piece aired last week, National Public Radio said games' are growing more popular because they offer cost-effective escapism, much like films did during the Great Depression.
Unfortunately, today's massive market loss affected even the most prosperous of publishers. As the Dow Jones industrial average shed a whopping 777.68 points (6.98 percent)--the biggest one-day point drop in history--the NASDAQ composite index was also clobbered, falling 199.61 points, or 9.14 percent.
Given that all US game publishers are traded on the NASDAQ, it was unsurprising that they, too, were down across the board. The share price of Activision Blizzard (World of Warcraft, Guitar Hero World Tour), the newly minted biggest third-party publisher on the planet, slid 13.8 percent ($2.26) to end the day at $14.12. Former top dog Electronic Arts (Madden NFL 09) saw $3.63 shaved off of its stock price, ending the day down 9.16 percent at $36 even. THQ (Saints Row 2) lost 7 percent, or $0.87, to close at $11.48, and shares in Take-Two Interactive (Grand Theft Auto IV) lost 4.52 percent ($0.73) to close at $15.43--nearly $10 less than its asking price one month ago.
Large multinational companies with large game components also suffered. Software giant and Xbox 360 maker Microsoft (Gears of War 2) saw 8.72 percent ($2.39 per share) of its multibillion-dollar market value vanish in a single day, closing at $25.01. On the New York Stock Exchange, PlayStation 3 manufacturer Sony Corp (Resistance 2) shed 5.09 percent ($1.65 per share), ending trading at $30.76.
But though today's losses in American markets came after the US House of Representatives voted down a $700 billion bailout bill, some game companies overseas were flagging even before the legislative decision. Worst hit was Paris-based Ubisoft (Assassin's Creed), which lost a whopping €12.47 ($17.92) per share in just hours, closing at €45.50 ($65.37) on the Euronext market. Eidos Interactive parent SCi Entertainment (Tomb Raider Underworld) lost £3.75 ($6.75) on the London Stock Exchange, ending the day at £26.75 ($48.16).