Video game software shares drop because of sales fears
A day after EA posted its disappointing quarterly report, video game software shares drop due to fears that companies may fail to deliver profitable titles during the holidays. As a result, retailers are stocking up mostly on AAA-rated titles, and not so much on not-so-anticipated ones, putting less popular games at a disadvantage on the market.
A day after EA posted its disappointing quarterly report, video game software shares drop due to fears that companies may fail to deliver profitable titles during the holidays. As a result, retailers are stocking up mostly on top-rated titles, and skimming down on the not-so-anticipated ones, putting less popular games at a disadvantage on the market.
“What they (retail stores) are doing is they’re focusing more on the bigger frontline titles,” EA COO John Pleasants said. “They are being a lot more cautious with catalog ordering, in particular, and especially in that kind of mid-zone.”
While larger companies have large enough titles to keep up with the current retail situation, other publishers may suffer with this behavior. Todd Greenwald of Signal Hill Capital Group notes,
“We believe this fits in with our thesis that gamers are getting more selective, and are only purchasing those AAA titles that are truly must-haves. This bodes well for Activision‘s holiday lineup while it probably raises some concerns for publishers like THQ, Midway, and Take-Two.”
With the economy the way it is and all, it’s not surprising. Only the strong lineups are expected to score big during the holidays, and all the other titles might not even make it to the shelves. Publishers and retailers alike are caught in the domino effect, and the gaming industry might experience colder holidays.
Related articles:
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- Dave Braben thinks buying pre-owned games hurt the industry
- Sony: PS3 Christmas lineup never been stronger
- Heads rolling: EA axes 600 employees
Via Reuters
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