EA and other video game publishers are taking a beating from investors

Posted December 4th, 2017 at 3:15 pm

With the recent debates over video game monetization – and the arguably predatory practices that may warrant classification as gambling – gaining even more steam the place to look for the most immediate impact is on Wall Street.┬áInvestors hate uncertainty but that’s exactly what the clash between publishers and consumers has brought about as the gravy train planned for the years ahead has seemingly gone off the tracks.

It’s not just the sense that the latter has stood up to the tactics being enabled in popular games forcing adjustments to be made but lawmakers in the US have started to take notice and other countries are beginning to recognize the loot box/card pack model as gambling.

EA’s stock dropped another 5% today, and now since the end of October it is down 15%. That’s a loss in Market Cap of nearly $6 billion which is astounding. It’s not just EA though that has taken a major hit. Take Two fell 8% today and is down 14% in the last two weeks. There’s also Activision which is down 11% in the last week.

It’s important however to acknowledge that these stocks had been rising for some time continually breaking all-time highs. EA’s stock is still 32% above where it was on this same date last year. Take Two is up 112% in the same time period.

A correction may have been overdue for these stocks but there’s no doubt that the potential of unlimited revenue out of games built with that in mind had been tantalizing for both the publishers and investors. With it becoming clearer that major changes will have to be enacted one way or the other the future financials may not be as promising as once hoped.