After the weekend shootings, video game companies witness share price volatility as politicians blame video games for the harrowing tragedies.
Gaming companies have seen volatile share price movement after Saturday’s (August 3) El Paso, Texas and Sunday’s (August 4) Dayton, Ohio shootings. The weekend shootings resulted in 32 fatalities and an additional 51 injured.
Responding to the massacre, US President Donald Trump blamed video games as one of the reasons behind the attacks. “We must stop the glorification of violence in our society,” Trump said after the shootings. “This includes the gruesome and grisly video games that are now commonplace.”
The El Paso shooter cited Call of Duty in his extensive manifesto, but claimed that mass shootings are not the same as video games. However, Activision Blizzard (NASDAQ:ATVI), the company that owns Call of Duty, has seen its shares slump over 4 percent since opening at US$49.62 on Friday (August 2).
In line with this, other gaming companies shares were also impacted, including Take-Two Interactive (NASDAQ:TTWO) and EA (NASDAQ:EA), whose shares dropped and bounced back again since the grueling incidents, reaching US$128.80 and US$90 as of Wednesday (August 7), respectively. Game developer Zynga (NASDAQ:ZNGA) shares have dropped 4.76 percent since Friday.
Gaming peripherals companies Razer (HK:1337) and Turtle Beach (NASDAQ:HEAR) witnessed share declines of 2.5 and 4.52 percent, respectively, since Monday. Video game retailer GameStop (NASDAQ:GME) gained over 1 percent after rebounding on Wednesday.
In response to the attacks, the Entertainment Software Association (ESA) said, “More than 165 million Americans enjoy video games, and billions of people play video games worldwide. Yet other societies, where video games are played as avidly, do not contend with the tragic levels of violence that occur in the US.”
The ESA is the trade group representative of the video gaming industry.
Several politicians have blamed video games as part of the attacks, skirting other possible rationale. House Minority Leader Kevin McCarthy has criticized video game companies, and so has Dan Patrick, the Texas lieutenant governor.
While direct statements from the major gaming studios remain noticeably silent, former President Barack Obama implicitly questioned President Trump’s blaming of video games for the shootings.
There is reason to question such rhetoric, as current evidence shows no correlation between video games and gun violence. For example, the Royal Society Publishing published a study showing that violent gaming and aggressive behavior had no correlation. The study, published in February surveyed 1,004 adolescents between 4 and 17 years old. Another study, this one by Markey, Markey and French, discovered no positive correlation between video games and aggravated assault.
Similarly, in 2017, the American Psychological Association published a paper urging politicians to not pin gun violence on video games.
However, the American Academy of Pediatrics’ opinion runs counter to these, as it has said that there is a correlation between violent media and aggressive behaviour.
Overall, the US serves as an outlier when it comes to firearm homicides, outnumbering the second ranking country in firearm incidents, Canada, by over 500 percent.
Despite this week’s volatility in the gaming industry, the growth of the market remains strong. According to a report from Global Data, the market is projected to reach US$300 billion by 2025, up from US$130 billion in 2018. Fueling that growth will be an increase in streaming, cloud services and mobile esports. Likewise, Newzoo anticipates that global consumer spending on video games will reach US$196 billion by 2022.
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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.