Activision Blizzard (ATVI) Investors on Alert as Violent Video Games Being Partly Blamed for Connecticut Shooting

December 17, 2012 1:46 PM EST
Shareholders of Call of Duty video game maker Activision Blizzard, Inc. (NASDAQ: ATVI) and other video game makers are nervous Monday related to fears about a potential backlash from Friday's horrible Sandy Hook school shootings, which left 26 dead, including 20 children.

There have been reports from the Hartford Courant that alleged gunman Adam Lanza played "violent video game in which life-like characters engage in graphic battle scenes."

This has investors worried that not only will there be backlash against gun makers, including Smith & Wesson Holding (Nasdaq: SWHC) and Sturm, Ruger & Co. Inc. (NYSE: RGR), but video game makers like Activision Blizzard could be the target of the outrage.

Activision Blizzard makes the wildly popular Call of Duty, which makes up a substantially portion of its revenues.

The company is not immune to legal claims of this kind and list it as a risk factor for investors (see below for risk factor)

In prior years, at least two lawsuits have been filed against numerous video game companies, including against Activision, by the families of victims who were shot and killed by teenage gunmen in attacks perpetrated at schools. These lawsuits alleged that the video game companies manufactured and/or supplied these teenagers with violent video games, teaching them how to use a gun and causing them to act out in a violent manner. These lawsuits have been dismissed. Similar additional lawsuits may be filed in the future. Although our general liability insurance carrier has agreed to defend lawsuits of this nature with respect to the prior lawsuits, it is uncertain whether insurance carriers would do so in the future, or if such insurance carriers would cover all or any amounts for which we might be liable if such future lawsuits are not decided in our favor. If such future lawsuits are filed and ultimately decided against us and the relevant insurance carrier does not cover the amounts for which we may be liable, it could have an adverse effect on our business and financial results. Payment of significant claims by insurance carriers may make insurance coverage materially more expensive or unavailable in the future, thereby exposing us to additional risk.

There has been a debate erupting online about if video games like Call of Duty should be banned. This debate has really just started and will likely grow in the coming days.

Shares of Activision Blizzard are down 2.45 percent Monday to $11.13

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are we a alert
Almary on 2013-01-21 14:45:03
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are we a alert for ct

people are dumb
dumbazz on 2012-12-19 00:38:52
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Ban violent movies while you're at it too.

No more Saw, Die Hards,

Idiots and their knee jerk reactions

Smoke & Mirrors
Jason Lee on 2012-12-18 11:55:56
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I've never played a game where you shoot up innocent people. LOL...NRA...smoke & mirrors. They always shoot back or you start off at a disadvantage & improve your character. Many games offer morality choices & associated consequences too. It's just like movies but much more immersive & you control the flow of the story.

Smoke & Mirrors
Jason Lee on 2012-12-18 11:51:04
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This is just a diversion from the NRA for the real problem, personal guns. If you play Battlefield 3 or Call of Duty Black Ops 2 multiplayer, you won't want to go into actual war. It's frightening. But as immersive entertainment, it is just amazing. Check out the video & you will see why Activision-Blizzard (Nasdaq:ATVI) had sales of $1 billion of Call of Duty Black Ops 2 in just 15 days of release. The gun manufacturers should get in the 3D VR & entertainment industry. Also, one would think that the shooters would shoot it out with law enforcement, if they were so into such war games, but they don't.

PC Hardcore Gaming Gameplay - Veteran Level:

Chong lee on 2012-12-18 09:22:51
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If Activision were to be held liable for the Connecticut shooting, then what about all the violent movies that are being shown ?

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