Gaming industry's fortunes fade as spending squeeze follows pandemic bump

Rising prices and a lack of hit titles have added to problems for video game publishers Activision Blizzard Inc and Electronic Arts that are also battling supply-chain delays and a shift in consumer choices due to easing lockdowns. The latest proof of that came on Tuesday from gaming platform Roblox whose revenue growth eased to just 30% from 83% two quarters ago.

"The job market is still hot, there is plenty of froth on the economy causing aggressive inflation and the relaxation of COVID restrictions are leading consumers to consider spending on more experiences outside of the home," Jesse Divnich at SVP Games Research said. "When you have 50% of big bank economists saying we might be in a recession in the next quarter or two, my attitude is... we're in a recession and... we are seeing some softness," Take-Two top boss Strauss Zelnick told analysts.

Analysts and company executives, however, expect the industry to grow above pre-pandemic levels, leaning on the launch of delayed titles and an easing of parts shortages.

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