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How videogame companies fared during the stock market turmoil

jenga_tower_fall.JPGLos Angeles Times writer Alex Pham has written an article about how gaming companies fared last week. Whereas the conventional wisdom is that entertainment is relatively recession proof, that's not the case with the dramatic upheaval on the stock market.

The video game sector dropped much more sharply than the Nasdaq. Activision Blizzard Inc. saw more than $4 billion in market value vanish this week, close to a quarter of the Santa Monica company's value. Electronic Arts Inc. lost more than $2 billion.
Ouch. As we hurtle into a particularly competitive holiday season, Pham speculates that the holidays themselves may be partly to blame.
Games are also caught up in the hand-wringing over the retail sector heading into the holidays. With a big chunk of video game sales occurring during the last three months of the year, a collapse in consumer confidence could have a disproportionate effect.
But the article winds down on a rather bizarre note, where Pham references a remark made to her by some analyst to the effect that the sales of shooters are disproportionately tied to quality, as reflected in review scores.
"It is pretty detrimental to sales for a shooter game to achieve a score below 80%," said Jesse Divnich, director of analytical services at Electronic Entertainment Design and Research in San Diego. "Simply put, if you want to make a first-person shooter, aim to achieve quality scores above 80%. If not, don’t even bother."
Huh? The economy is confusing enough without bring into it random gobbledygook from an analyst unfamiliar with the typical 7-9 review ratings. Here's how it works, Miss/Mr. Divnich: bad games get a 7, decent games get an 8, good games get a 9. So, yeah, games that get a 7 don't sell well. What does that have to do with the price of tea in China?

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