Julian Assange extradition appeal Google sued over handling location data Tax filing: Best tax deductions 2022 Ford Bronco Raptor Free COVID-19 test kits Yellowjackets finale recap

Holiday worries sink game makers

Shares are beaten down after several companies report disappointing news and analysts trim expectations for the holiday shopping season.

Shares in video game makers were beaten down Tuesday, after several companies reported disappointing news and analysts trimmed expectations for the critical holiday shopping season.

Among the hardest hit were THQ Interactive, creator of games based on popular franchises such as World Wrestling Entertainment and Nickelodeon series "Rugrats" and "SpongeBob Square Pants." The company Monday reported earnings that were up sharply from a year ago but revised fourth-quarter guidance to the lower end of previous estimates, blaming the economy and other factors.

"We have a strong product line-up for the fourth quarter, although our optimism is tempered by the unusual degree of uncertainty in the global economy, the domestic retail environment this holiday season, and the ability of Nintendo and Microsoft to meet their global projections for GameCube and Xbox sales," CEO Brian Farrell said in a statement. THQ closed regular trading on Tuesday down $8.37, or 36.1 percent, to $14.80.

Video game makers typically count on the final quarter of the calendar year for the bulk of their profit, scheduling the release of hit new titles to ensure top placement on holiday wish lists.

U.S. Bancorp Piper Jaffray analyst Tony Gikas said in a research note Tuesday that a weakening retail climate and other economic factors were likely to hurt fourth-quarter performance for game makers. He lowered ratings for THQ, Activision, Take-Two and Electronic Arts, dropping all from "strong buy" to "outperform" as the game industry enters a more competitive mass-market era.

"Going forward, we think the level of exceeding financial estimates (as a group) will moderate," he wrote of the "Big Four" game makers. "The days of consistently beating earnings estimates by huge margins are over...Looking forward, we think the 'Big 4' are better trading stocks than buy-and-hold investments."

Activision shares closed regular trading down $3.87, or 16.3 percent, to $19.90. EA shares dropped $5.54, or 7.7 percent, to $66.60. Take-Two was down $1.42, or 5.1 percent, to $26.21.

Overseas game makers also had bad news Tuesday. Shares in Japanese game maker Sega were pounded for a fourth consecutive day on the Nikkei exchange after Japanese analysts lowered ratings for the company based on weak sales in North America, particularly for its key football game, "NFL 2K3." Analysts for Japanese investment bank BNP Paribas reported Sega has sold 400,000 copies of "NFL 2K3" so far, well below initial targets of 1.5 million, which would have matched sales of Electronic Arts' rival "Madden NFL 2003," according to Reuters reports.

British game maker Eidos also announced that it was delaying the release of the new installment of its hit "Tomb Raider" series of adventure games until February. The game, for Sony's PlayStation 2 console, originally was set to be on the market in time for Christmas.