Gaming industry sees ‘diminished’ returns from graphics investing, NYT reports

For decades, companies like Sony (SONY) and Microsoft (MSFT) made bets that realistic graphics for video games were the key to drawing bigger audiences, with the industry spending billions to pursue the idea, but companies are now acknowledging that investing in graphics is providing diminished financial returns, the New York Times’ Zachary Small reports, citing industry sources. “It’s very clear that high-fidelity visuals are only moving the needle for a vocal class of gamers in their 40s and 50s,” said Jacob Navok, a former executive at Square Enix. “But what does my 7-year-old son play? Minecraft. Roblox. Fortnite.” Publicly traded companies in the space include Electronic Arts (EA), GameStop (GME), NetEase (NTES), Nintendo (NTDOY), Take-Two (TTWO), Tencent (TCEHY) and Ubisoft (UBSFY).

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