Game stocks bloodied in market meltdown

Activision falls 28%, THQ sheds 39%, EA slides 37%, and Take-Two loses 40% during four-week roller-coaster ride on Wall Street, capped by today's sixth-straight triple-digit Dow Jones drop.

Unless you've been in a darkened room playing Spore with the TV off for the past month, you're probably aware that the US is in the midst of a dire financial crisis. That fact was underlined today when the Dow Jones Industrial Average lost 679 points to end the day at 8,579, or down 7.33 percent. That's the first time since 2003 that the index has closed below 9,000, and was the sixth triple-digit single-day loss in a row.

But though the news was grim on the New York Stock Exchange, it was slightly better on the NASDAQ, which saw its composite index fall a still-painful 95.21 points, or 5.47 percent. America's second-largest market is home to many technology stocks, including the majority of third-party video game publishers touted as "recession-proof" by some analysts.

Indeed, comparing the closing September 9 and October 9 share prices of four top publishers, it's clear that some of the biggest names in games are hemorrhaging market value. Worst off is Take-Two Interactive, which has lost 40 percent of its share price in a month, going from $21.77 to $13.01. Besides overall market woes, the decline was also in large part due to Electronic Arts' abandonment of its Take-Two takeover bid, which was $26 per share at its highest point.

Ironically, EA was also a big loser during the Sept. 9-Oct. 9 period. Despite a recent spate of hits such as Spore and Warhammer Online, the publisher's stock value has shrunk 37 percent over the month, going from $44.21 to $27.80. More alarming is the fact that EA's stock value has nose-dived 53 percent in the past year, having been worth $59.94 on October 9, 2007.

Also battered in the value-loss demolition derby was THQ, which shed 39 percent of its value, sinking from $13.83 to $8.34. Over the past year, the WWE SmackDown and Saints Row 2 publisher has lost 68 percent of its value.

The last and least money-losing game company was Activision Blizzard, which shaved 28 percent--$4.67--off of its shares during the month, ending at $11.95. No year-on-year comparisons are available for the newly minted Guitar Hero and World of Warcraft maker, which was formed in July by the union of Activision and Vivendi Games.

Things were also tough for companies with major game interests, such as the two console companies traded on US stock markets. On the NASDAQ, Xbox 360 maker Microsoft lost $3.80 (14 percent) during the month to close at $22.30, down from $30.10 a year ago. On the NYSE, Sony Corp. fared worse, suffering an $11.91 monthly drop (33 percent), to end up at $23.51.

Despite the apparent game-industry-wide drubbing, analysts are confident that the game industry will fare better in a recession than other sectors. "If people aren't traveling and stay home, what are they going to do? They'll want relatively cheap home entertainment," David Gibson, senior analyst at Macquarie Research Equities, told the Wall Street Journal. "[And] core gamers will buy the titles when they come out, regardless of economics."

A summary of publishers' September 9-October 9 share-value losses is listed below. Also listed are the publishers' share prices from over a year ago for year-on-year comparison.

THIRD-PARTY PUBLISHERS

Activision Blizzard
$16.62 (Sept. 9) - $11.95 (Oct. 9) = $4.67 monthly drop (-28%)

Electronic Arts
$44.21 (Sept. 9) - $27.80 (Oct. 9) = $16.41 monthly drop (-37%)
Stock price on Oct. 9, 2007 = $59.94 =$32.14 year-on-year drop (-54%)

THQ
$13.83 (Sept. 9) - (Oct. 9) $8.34 = $5.49 monthly drop (-39%)
Stock price on Oct. 9, 2007 = $26.78 = $18.44 YOY drop (-68%)

Take-Two Interactive
$21.77 (Sept. 9) - (Oct. 9) $13.01 = $8.76 monthly drop (-40%)
Stock price on Oct. 9, 2007 = $18.34 = $5.33 YOY drop (-29%)

CONSOLE MANUFACTURERS (Traded in US)

Microsoft
$26.10 (Sept. 9) - (Oct. 9) $22.30 = $3.80 monthly drop (-14%)
Stock price on Oct. 9, 2007 = $30.10 = $7.80 YOY drop (-25%)

Sony Corp.
$35.42 (Sept. 9) - $23.51 (Oct. 9) = $11.91 monthly drop (-33%)
Stock price on Oct. 9, 2007 = $49.85 = $26.34 YOY drop (-52%)

242 Comments

  • rotnem

    Posted Nov 23, 2008 9:37 am PT

    Now is the best time to buy stocks. The stock market will come back up again. If anyone has desposable income that they are willing to hold out for the long haul then now is the time to invest in the game industry.

  • Lord__Darkstorn

    Posted Nov 3, 2008 2:21 pm PT

    Jajbarrett - Ignorance is not bliss.

  • Jajbarrett

    Posted Oct 16, 2008 2:02 pm PT

    surely games are the exact sort of escape we need from the depressing outlook of our times. aren't these the stocks to be buying? :-D

  • jhcho2

    Posted Oct 16, 2008 9:14 am PT

    I think most people got the whole idea of the current economic crisis all wrong. You see, the sub-prime legislation is not necessarily the sole cause for this current turmoil. If anything, sub-prime loans were passed in an attempt to prevent the collapse of the market in the first place. A recession has a cyclic period of approximately 10 years. Economics dictates that inflation and recessions are complementary. The government passed sub-prime loans to encourage spending, in an attempt to prevent a full recession from occurring. What we must understand is that a recession cannot be prevented, but merely delayed. If we look at it, this recession is long overdue. So what happens when you have an overdue recession with inflation stretched further than the economy is realistically able to handle? The market collapses! It's like forcing yourself to carry more than your bones and muscles can bare. Eventually you break all your bones out of stubbornness to renounce your burden as you should in the first place. So..the bigger question is, why didn't all you startasses voice out your complain when the recession was supposed to hit 2 years ago? It's more like you guys were too blind to notice it. Most of you were dazed by propaganda that the US economy was stronger than it really was. It is people like most of you who bought into that propaganda which constituted to the current collapse. And it took a full blown recession to open up your eyes.

  • Waffen_SS84

    Posted Oct 15, 2008 7:05 pm PT

    Those who are responsible for this are all the americans who bought a house when they didn't have the money. People must live within their means, not above. We must also thanks Clinton and his Community Reinvestment Act, which forced banks to give risky loan to people who didn't have the cash to back it up.

  • Cabal23

    Posted Oct 13, 2008 9:41 am PT

    I think the idea behind people thinking the stock market crash is a good thing, is a confused message, but it has some validity. People are mad that the market got to where they are due to corrupt legislation and bad politics/business. No one wants the market fail, but how else are we going to right the system? And right now it certainly needs something other than a bailout, perhaps a little personal accountability.

  • PirateG

    Posted Oct 13, 2008 8:39 am PT

    well it was excpected since the crysis in US was wide and the gaming industry couldnt stay out of it.
    Lets just hope this aint gonna happen in europe..

  • Shadow_Fax87

    Posted Oct 12, 2008 5:51 pm PT

    Hmmm, that guy's got a point, what else are people going to do? well, when the market starts going up agian, it would be smart to grab some EA stock....

  • hurricaner

    Posted Oct 12, 2008 5:31 pm PT

    this is bad!i just want ea to pay for what they did with that securom issue

  • tippeetom

    Posted Oct 12, 2008 3:30 pm PT

    i hope this wont effect saint row 2 stock in uk

  • darkride66

    Posted Oct 12, 2008 7:33 am PT

    heavymetalzplin said "good on the stock market crash. its good to see them losing money for once instead of robbing us of it."
    Yeah, good for people to lose 30% of their retirement funds! Serves them right.
    What a maroon. How twisted does your head have to be that you think a stock market crash is good? And how out of touch do you have to be with reality to believe that stock markets are somehow "robbing us." Give your head a shake. The stock market isn't the one losing money, it's everyone. It's your parents, grandparents, teachers, politicians, business owners - everyone. What an ignorant comment.

  • hotfiree

    Posted Oct 12, 2008 12:57 am PT

    Damn now would be the best time to buy stocks cause in time it will get better, it always does and has just like in the depression and people will be so happy they bought stocks so cheap. I agree with heavy though maybe this will show them what its like to pay 120 bucks a game for us.

  • heavymetalzplin posted Oct 11, 2008 10:57 pm PT (does not meet display criteria. sign in to show)

    heavymetalzplin

    Posted Oct 11, 2008 10:57 pm PT (hide)

    good on the stock market crash. its good to see them losing money for once instead of robbing us of it.

  • jahnerd

    Posted Oct 11, 2008 6:28 pm PT

    I just know that zombie invasion is coming soon now!!!

  • LuLuClassiC

    Posted Oct 11, 2008 10:58 am PT

    In all honesty, with the recent titles and the way the company's behaving, I can't say I'm too surprised..

  • acsam12304

    Posted Oct 11, 2008 7:02 am PT

    @Eternal_Insane

    yeah right now is a time to buy really good stacks but not a lot.. like for example, right now GM stock is almost $2.50 a share and Ford is $4.50 a share. for me its a really good buy to buy a few stock. because is they make it i will have a really good high stcok later on when things get back to normal. and they go out then i wont worry because i did not but a lot of stock from them. you see its all part of the game and you need to know how to play it.

  • acsam12304

    Posted Oct 11, 2008 6:59 am PT

    @thibbledorfP

    yeah your are right. you see i go to a GameStop at a mall near where i live. i know the assistant manager there. and i ask him how are sells are games. he said games are selling a a good pace use games are sold more then new. but console sales are low.

    so im saying yeah and times like theses people buy more games then anything else because they can at least enjoy something at home. (hope its not a bad sucky game they pick up tho lol) so game sales are going to stay up over at least $10 a share... in my opinion.

  • kb8618

    Posted Oct 11, 2008 6:55 am PT

    they'll go up, depending on who wins the election in the us. i think i might buy some stock soon, once they'll slowly start regaining

  • thibbledorfP

    Posted Oct 11, 2008 6:52 am PT

    They're not as bad as the drop in other types of stocks, they will pick up. Our support as consumers will help. The problem is in the meantime before the stocks pick up, game producers are going to be a lot more careful about greenlighting anything. Even after the markets recover, they might be finnicky for a while.

  • acsam12304

    Posted Oct 11, 2008 6:47 am PT

    @c1812

    you know what?? you are so right buddy. he let his friends in Wall Street do this. i dont know why you got 5 thumbs down?

    i dont like Obama but hey it eather him or 4 or 8 more years of george bush.

    me i would of voted for Ron Paul because on the way he talks about the economy is very ture. we have no gold to back US dollars so we are just printing money. the Iraq war is just eatting up our tax money everyday, he said he ovted agatins the war in Iraq 1998.. what does that tell you??

    oh yeah i for got all the media calls Ron Paul a nut because CNN and even Fox news are own by Wall Street lobbyist and are getting paid not to let the truth get out

  • Fib25

    Posted Oct 11, 2008 5:11 am PT

    EE2lemmonhead said:
    the dow jones is UNDER 9000!!!!!!!!!!

    hehehe that made me laugh XD

  • acsam12304

    Posted Oct 10, 2008 9:32 pm PT

    well by looking at trh price of the stock looks like they are all still doing at least well.

    unlike GM and Ford where their share are all under $5 a share

  • c1812

    Posted Oct 10, 2008 9:20 pm PT

    Well we can all thank the crazy people who put bush in charge. don't make the same mistake twice! when November 4th comes you know what to do..... Obama 08

  • sgt-hawkins

    Posted Oct 10, 2008 9:08 pm PT

    ah this is all bad news but we gotta remain postitive and deal with it or we will really be in trouble

  • EE2lemmonhead

    Posted Oct 10, 2008 8:57 pm PT

    the dow jones is UNDER 9000!!!!!!!!!!

  • Sw0rDMaN

    Posted Oct 10, 2008 8:50 pm PT

    Dark times are coming ahead! You guys should buy lots of water and lots of can food. Then buy Fallout 3 and dont get out of your house until all of this financial crisis has passed by. lol Oh and ya! Barricade your windows just to make sure those creeps dont come in

  • Eternal_Insane

    Posted Oct 10, 2008 8:48 pm PT

    Zlyrikal10
    I hate Bush more then the next man but he's also working with a whole crew of slimeballs as well.

    Invest in UPS I think thats a good move, you know out of any one they're gonna rebound when ever this ends wich it will sooner or later.

    Thanks for the agreement and yeah I'll look into your advice, makes sense.

    Not that I'm trying to make someone learn, not about knowing or not knowing, just for the record, The Bush administrations is one of the worst administrations in presidential history. Lol, hell of a president, look at how bad our country is doing, you guys voted him in twice for two terms! (not pointing fingers at any specifics here on gamespot)

  • Avals

    Posted Oct 10, 2008 8:34 pm PT

    Of course Ubisoft get hit seriously too..just wonder why they isn't listed..

    Everywhere on world is deep in economic crisis..

  • Lightningrealms

    Posted Oct 10, 2008 7:50 pm PT

    What about Ubisoft? Did they get hit at all?

    Also, this is reminiscent of everything that happened in 1929, there was low interest rates etc., and in 1999, the US government repealed the Glass Steagle Act of 1933 under FDR. That move coupled with greed has caused this meltdown. Looks like the bailouts failed as well...

  • junglist101

    Posted Oct 10, 2008 6:50 pm PT

    There's no way these companies are as bloodied as my 401K which was down about 48%

  • -CheeseEater-

    Posted Oct 10, 2008 6:25 pm PT

    Fantastic time to buy!

  • Merl57

    Posted Oct 10, 2008 5:50 pm PT

    good time to buy everything is cheap

  • Krammin

    Posted Oct 10, 2008 5:44 pm PT

    Greed at it's best. Stupidity at it's highest.

  • sanjeev3

    Posted Oct 10, 2008 4:28 pm PT

    Other countries are only having economic troubles because of the US, the invested in their banks, their banks did something stupid and the whole world paid for their mistake.

  • zlyrikal10

    Posted Oct 10, 2008 4:25 pm PT

    Eternal_Insane Posted Oct 10, 2008 4:20 pm PT Is everyone blind? nobody is mentioning Bush, this doesn't happen until Bush is in office, hehe, presidents these days, only using office for personal gain,and everyone else getting the feces bucket because of it... what thet hell is wrong with this country today, I feel sorry for the game industries. I hate Bush more then the next man but he's also working with a whole crew of slimeballs as well.

    Invest in UPS I think thats a good move, you know out of any one they're gonna rebound when ever this ends wich it will sooner or later

  • Eternal_Insane

    Posted Oct 10, 2008 4:20 pm PT

    Is everyone blind? nobody is mentioning Bush, this doesn't happen until Bush is in office, hehe, presidents these days, only using office for personal gain,and everyone else getting the feces bucket because of it... what thet hell is wrong with this country today, I feel sorry for the game industries.

  • Eternal_Insane

    Posted Oct 10, 2008 4:14 pm PT

    The Dude1212, I totally agree, Bush put the country in debt for his personal selfish gain, he doesn't give a flying hoot if the country is in debt, and yeah thats why the game companies are losing money on wall street, I dont feel its all about one man gaining, everyone should gain, not just him.

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