© Riccardo Milani / Hans Lucas via Reuters Connect
By Liz Moyer
Investing.com — Video game stocks were pandemic darlings, but like so many companies that benefited from a stay-at-home boom in entertainment, they are suffering in the rebound.
Earnings from game makers showed declining engagement and sales as gamers got up from their consoles or put their mobile devices down to travel or seek other forms of real-life entertainment.
Data analytics firm NPD said consumer spending on video gaming in the U.S. fell 13% in the second quarter from the same period in 2021.
Inflation is another part of the story, according to NPD, as were supply constraints preventing some game makers from making as many devices as they hoped, and a smaller schedule of new game releases.
This week Roblox Corp (NYSE:) reported on the top and bottom lines and said average daily active users were 52.2 million, which is about one million below what Wall Street expected.
Roblox is a gaming platform where people can also build their own virtual worlds and spend money there. Users can purchase items to dress up their online avatars or pay for other features using its virtual currency called Robux. Bookings for the quarter, a measure of revenue, fell 4% from last year.
On a positive note, Roblox said third-quarter trends are looking up, at least for the first month. July’s daily active users hit a record high of 58.5 million and bookings rose 8% to 10% from last year.
Shares of Roblox are still down 52% this year.
Take-Two Interactive Software Inc (NASDAQ:), which has completed its purchase of Zynga, is projecting net bookings for the year of $5.8 billion to $5.9 billion, which was below Wall Street’s forecast for $6.2 billion. But for its recent first quarter, bookings were up 41%.
Take-Two shares are down 31% this year.
Some of the equipment makers also reported slowing sales. NVIDIA Corporation (NASDAQ:), for example, which makes graphics cards used for gaming, reported weaker than expected . Its shares are down 37% for the year.
Sony Group Corp (NYSE:), maker of the PlayStation console, said gameplay time was down 15% in the recent quarter and projects a 16% drop in gaming profit for the full year. Sony shares are down 32% this year. And Microsoft Corporation’s (NASDAQ:) Xbox sales fell 11% in the . Its shares are down 14% this year.
Randy Nelson, head of mobile insights at Sensor Tower, told NPD recently, “We originally forecast U.S. mobile game industry revenue in 2022 to exceed that of 2021, but the economic uncertainty of the coming months will undoubtedly impact how that unfolds.”
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