Market panic rips through games publishing

Market panic rips through games publishing

By Rob Crossley

September 23rd 2011 at 11:07AM

Global sell-off sees EA down 5%; Activision down 3%; Take-Two down 5%; THQ down 8%; Ubisoft down 1.5%

Shares across the US and Europe were in free-fall yesterday amid warnings that the global economy had entered a danger zone.

Publicly traded games companies, from Electronic Arts to Activision, were victim to a global sell-off that saw the main indexes in the UK, Germany and France fall about 5 per cent.

This morning markets across Europe stabilised. Yesterday the Dow Jones share index fell about 3.5 per cent as the International Monetary Fund sent grim warnings of how inaction was dismantling the global economy.

The wider conditions have seen publisher shares spiral. Electronic Arts yesterday closed at $20.79 on Wall Street, down 5.4 per cent from the day prior.

In the same period, Take Two shares sank 4.8 per cent ($12.62), while Activision trading decreased 3 per cent to $11.57.

THQ shares began to slide earlier. At close of trading on Wednesday, the group’s stock embarked on a traumatic 8.8 per cent decline that ended on Thursday.

Ubisoft, which is traded on the Euronext pan-European stock exchange, suffered from a 1.42 per cent decline.

The United States, which was recently downgraded to a AA+ economy by Standard and Poor’s, continues to suffer across its stock markets.

Yesterday the Federal Reserve warned that the US economy faced "significant downside risks".

"Markets rely on confidence and certainty. Right now there is neither," said economic strategist John Canally.

On Thursday, Christine Lagarde, head of the International Monetary Fund, said that the economic situation was entering a "dangerous place".

Economic fears have dented Zynga’s bid to be listed on the New York Stock Exchange. The social games giant has delayed its IPO until further notice.

On Friday, the main indexes in the UK, France and Germany were all up between 0.5 and 1 per cent in early trading.