Political and media backlash will affect consumer behavior in only a minor way.
In the wake of the horrific Sandy Hook shootings, there are a few things you can expect to hear about for the next few weeks: gun control, school safety, and violent media. While videogames have proven a predictably popular target for criticism, one person in the know isn't too concerned about their short-term sales. An analyst for Cowen and Company investment services believes that politicians and media naysayers have little sway over consumer habits, and both game companies and investors can rest easy for the time being.
According to analyst Doug Creutz, videogames have nothing to fear from the government. "We believe that any new attempts to regulate video game sales would be quickly struck down by the courts based on [the Brown v. Entertainment Merchants Association case]," he says, citing the supreme court case that protected games with First Amendment rights. Game sales will also not likely suffer as a result of media or political backlash. Creutz reminds investors that most people possess "entrenched opinions" when it comes to videogame violence. A scathing editorial or political jeremiad will not do much to convince an adult who has already made up his or her mind about the relative risk of videogames, and there are not enough undecided consumers to make a dent either way, Creutz reasons.
Even if a number of consumers decide to forego violent videogames for the near future, Creutz believes that most game companies have enough flexibility in their share prices to weather the hit. "While these concerns are understandable - particularly given the currently emotionally charged environment - we think video game shares are now pricing in much more risk to their business models than actually exists." He also expresses optimism for 2013, given a number of high-profile titles releasing in the first half with possible console entries from Sony and Microsoft in the second.
Finally, Creutz points out that Halo 4 and Call of Duty: Black Ops II have not seen their sales impacted in any way by the events at Sandy Hook, suggesting that the average consumer does not seem them as quite as much of a threat as some politicians do. In short, expect violent games to sell well during the holidays, but be ready for a lot of hand-wringing afterwards.