Major video game publishers shielded by in-house studios during strike, analysts say

[July 30, 2024]  By Zaheer Kachwala
 
(Reuters) - Major video game publishers including Electronic Arts and Take-Two will likely stave off a big hit from the strike by voice actors and motion-capture artists due to their in-house studios and the lengthy development cycles for games, analysts said.   

An attendee uses a Nintendo Switch game console while playing a video game at the Paris Games Week (PGW), a trade fair for video games in Paris, France, November 5, 2023. REUTERS/Claudia Greco/File Photo

The strike, which began last week, marked the latest in Hollywood after unions representing writers and actors took to the picket lines last year seeking protections against the use of artificial intelligence.

It comes at a crucial time for the video game industry as demand remains weak after a pandemic-driven boom, with people spending fewer hours on games and sticking to big titles.

But unlike the disruptions caused by last year's strikes, the latest action is expected to have little impact as the workers make up a small portion of the video game development process and budget.

"When you think about the larger publishers, they'll spend anywhere from three to 10 years working on their larger titles. If something is coming out over the next several quarters, it will have been something that they begin production on several years ago," Wedbush Securities analyst Nick McKay said.

That means that Take-Two Interactive Software's long-awaited title "Grand Theft Auto VI" - set to be launched in the fall of 2025 - is unlikely to be affected by the strike that workers represented by the SAG-AFTRA union called on Thursday.

The small budget required for voice acting also gives companies little incentive to hold projects, and without a unified body, once one developer agrees, others may follow, analysts said.

Still, the strike will be a hot topic during earnings of the companies set to be released in the coming weeks, said Joost Van Dreunen, a lecturer at NYU's Stern School of Business.

The strike was a symptom of the widespread layoffs and studios shutdowns that have hit the industry, he added.

"If it isn't resolved by early September, then I can see it carrying into the rest of the year and the holiday season," said Van Dreunen. "That will be much more dramatic for publishers."

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shounak Dasgupta)

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