Analyst: Sandy Hook Shooting Might Scare Video Game Investors

Companies will wait to see what impact regulation might have

Doug Creutz, an analyst watching the video game industry for Cowen and Co., believes that the backlash against violent media experiences that emerged after the fatal school shooting at Sandy Hook in Newtown might scare away investors.

The biggest potential long-term problem is the new bill from Senator Jay Rockefeller of West Virginia, which will authorize the National Academy of Sciences to evaluate the effects of violent video games in 18 months and then present them to Congress.

They might then use the data as the basis for new legislation limiting violent video game sales.

Creutz believes that for Senator Jay Rockefeller it is easier to take on the games industry rather than the National Rifle Association because of the high gun ownership level in West Virginia.

The new bill has not yet been debated on the floor of the Senate as the lame duck session is focused on the fiscal cliff negotiations.

The analyst says, “We believe that the vast majority of players of video games with violent content have already made their minds up on this issue and are unlikely to be swayed by recent events.”

He adds, “The video game industry has been through this cycle several times before (most notably following the Columbine and Virginia Tech incidents) with no apparent impact on game sales. At this point, we think most adults have fairly well-formed opinions on the dangers, or lack thereof, posed by video games.”

Apparently, violent games like Call of Duty: Black Ops 2 and Halo 4 have continued to sell well after the Newtown shooting and there are currently no plans from publishers to actually cancel future releases.

At the moment, THQ has declared bankruptcy and has a winner lined up, but other publishers might require more funding in the coming months and the incident might spook big companies.

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