I've heard and experienced it myself: Lua's garbage collector can cause serious FPS drops in games as their scripted part grows.
This is as I found out related to the garbage collector, where for example every Vector() userdata object created temporarily lies around until getting garbage collected.
I know that Python uses reference counting, and that is why it doesn't need any huge, performance eating steps like Luas GC has to do.
- Why doesn't Lua use reference counting to get rid of garbage?
It's a tradeoff. People have explained some reasons some languages (this really has nothing to do with Lua) use collectors, but haven't touched on the drawbacks.
Some languages, notably ObjC, use reference counting exclusively. The huge advantage of this is that deallocation is deterministic--as soon as you let go of the last reference, it's guaranteed that the object will be freed immediately. This is critical when you have memory constraints. With Lua's allocator, if memory constraints require predictable deallocation, you have to add methods to force the underlying storage to be freed immediately, which defeats the point of having garbage collection.
"WuHoUnited" is wrong in saying you can't do this--it works extremely well with ObjC on iOS, and with shared_ptr in C++. You just have to understand the environment you're in, to avoid cycles or break them when necessary.
What version of Lua is being used in the games you are basing this claim on? When World of Warcraft switched from Lua 5.0 to 5.1, all the performance issues caused by garbage collection were severely diminished.
With Lua 5.0's garbage collection, the amount of time spent collecting garbage (and blocking anything else from happening at the same time) was proportional to the amount of memory currently in use, leading to lots of effort to minimize the memory usage of WoW addons.
With Lua 5.1's garbage collection, the collector changed to being incremental so it doesn't lock up the game while collecting garbage like it previously did. Now garbage collection has a very minimal impact on performance compared to the larger issue of horribly inefficient code in the majority of user created addons.