Will the looming worldwide recession impact the VG industry?

[tmc]

Do you think the looming worldwide downturn / recession will have any impact on the videogame race in 2008?

Gaming, with any entertainment / luxury item will be amoung the first and heaviest hit therefore what implication will this have on the three big videogame companies?

Will Nintendo be hardest hit with their reliance on 'casual' gamers who would be more willing to lay down their 'casual' hobby during hard times or will it be Sony hardest hit with it's ticket price being the highest of the big three and whilst it's trying to hit it's stide this year it could be bad timing?

I'm from the UK and can remember the last big recession of the late 80's/early 90's but i am to young to remember it's impact on the industry, can history tell us anything?

[Mr.FoodMonster]

I just read this article, which is surprizingly relevant to the topic at hand.

http://arstechnica.com/news.ars/post/20080418-gaming-appearing-recession-proof-as-wii-ds-dominate-sales.html

[badinsults]

Did the depression slow down the movie industry in the 30s?

The answer is no, the opposite happened. When times are tough, people will always find the money for entertainment.

[s1lence]

Not from what I've seen. Gamestores are always packed with people and the largest turn out at the Midwest Gaming Classic yet seems to back up the idea that its recession proof.

[otaku]

If anything piracy of games will increase just download the stuff or turn to playing older cheaper stuff. It may hurt people buying hardware and new games etc but it won't hurt to much. Sure as hell won't stop me I'd forgo some food first

[CartCollector]

During the dot-com crash in 2000-2001, video game sales stayed pretty much the same. So I can't see the coming recession affecting video game sales that much.

[mnbren05]

I say it will take a toll on everything. We are not talking full out recession of VG's but I imagine studios closing, being bought up by larger companies, and a slight reduction of titles coming to market will take place. Other than that I doubt anything major will happen. As it was stated above, "people will always find the money for entertainment" (I.E. video games, movies, booze, and strippers etc)

[BHvrd]

Did the depression slow down the movie industry in the 30s?

The answer is no, the opposite happened. When times are tough, people will always find the money for entertainment.

I agree with this.

[SaturnFan]

Nope. How many bills does an average 13-25 yo have these days? Young people will always have money for this stuff because they are still young and have money to blow on videogames because they have nothing else to pay for.

[Iron Draggon]

the effect it will have on the PC game industry will be more games released as online downloads instead of as retail releases with manuals and inserts :grrr:

[FrakAttack]

Could increase software sales for existing systems and decrease hardware sales for next gen systems. People with less money tend to stay home more, but are also more reluctant to make large investments in new things.

Which would be fine with me, because that could force developers to push the existing hardware to the limits and extend the life cycles of the consoles that we already own.

[Ze_ro]

When times are tough, people will always find the money for entertainment.
Especially when those times are depressing, and people need all the entertainment they can get.


Will Nintendo be hardest hit with their reliance on 'casual' gamers who would be more willing to lay down their 'casual' hobby during hard times
I doubt it. Nintendo's games generally appeal to both the "casual" and the "hardcore". The more likely companies to succumb to a recession would be companies that release sub-par games, like THQ and Majesco. Players will still pay for the Halo's, the Madden's, and the Mario's... even if their monies are low... The also-rans and the small houses are the ones that will suffer, as people will be out of money before they choose to buy crappy movie licenses and such.

--Zero

[swlovinist]

Nintendo Hurt in sales? LOL
Nintndo is more profitable now than they have ever been. They could sell zero software and still be ahead. Why? They are smart and cunning when making a game system...they always sell at a profit.

Honestly, with the game industry surging ahead like there is no tomorrow, I dont think a recession is going to give the game industry any problems. I do think that at some point the game market is going to have a correction. You can only make so many average games and spinoffs before the public determines to be a little more cautious about buying a game. Its not like the old days when a game company releases 10 games and prays that one is a hit. Now days, making a dud is possible death to a smaller company.

I think that games are recession proof. If anything, this will add some life to the PS2(like it needed it!)

[Niku-Sama]

people are going to want to have the chance to escape from their problems so no it think it'll pretty much stay the same

[7th lutz]

I don't see it affecting video games. The recssion would be huge to affect people seeing movies and playing video games.

Some forms of entertainment will be hurt by recession. I am talking about the ones that involves traveling. Gas prices are not getting any cheaper. I wouldn't be shocked it gas cost over $5.00 a gallon sometime next year.

A recession would affecting people doing to theme parks, traveling overseas as tourists, or sports that have a large traveling following like Nascar. A recession may affect attendance at other Sporting events. It is up to how expensive the tickets to a sporting event is.

Video games cost less then going to a Nascar race and some other forms of entertainment.

[chrisbid]

Did the depression slow down the movie industry in the 30s?

The answer is no, the opposite happened. When times are tough, people will always find the money for entertainment.


did going to the movies require several hundred dollars for the end user before enjoying a film?

[zektor]

Funny, I was just discussion this point with my brother yesterday. We hit up "Micro Center" by his house, a massive computer/game outlet. The place was packed and sales were abundant. I was wondering HOW people could still be buying like crazy in this recession period. The need for entertainment to beat the depression makes sense, but I am also inclined to believe that the USA is a society that lives on credit. My wife is a debtor (yeah, one of those people that call you when you don't make payment, garnish wages, freeze accounts..etc) and she is at an all time collecting high. We may be buying to beat depression, but ironically are creating even more depression in the long run. We will all be in some MAJOR debt if this continues...that is for sure.

[Jimid2]

Do you think the looming worldwide downturn / recession will have any impact on the videogame race in 2008?

Um, I have a question: What worldwide recession?

The US economy is in the toilet for good reason, but China and a lot of the Pac-rim countries are booming, Europe seems to be doing okay (they don't overly depend on exports to the US anyway) and Canada is doing really well, despite the problems our southern neighbours are experiencing... Sure, gas is up, but a US recession does not necessarily suggest a dramatic domino effect this time around; I don't see it being to rough a ride for most of us, and I think that video game sales will continue to grow over the next five years or so... And the Americans will turn this around quick (they always do!) - within two or three years after the next election they'll be back on track...

[chrisbid]

Um, I have a question: What worldwide recession?

The US economy is in the toilet for good reason, but China and a lot of the Pac-rim countries are booming, Europe seems to be doing okay (they don't overly depend on exports to the US anyway) and Canada is doing really well, despite the problems our southern neighbours are experiencing... Sure, gas is up, but a US recession does not necessarily suggest a dramatic domino effect this time around; I don't see it being to rough a ride for most of us, and I think that video game sales will continue to grow over the next five years or so... And the Americans will turn this around quick (they always do!) - within two or three years after the next election they'll be back on track...


china is booming due to US consumption, there will be no disconnect when the bill finally comes for all the debt spending

[Icarus Moonsight]

Some industries are more resistant to economic downturns. Some are even more profitable when money is tight. The movie and game industry are in the sub-set that are oft times more profitable. Inexpensive entertainment is prime in hard times. Sporting goods fares well also. Instead of going to Disney World or Hawaii many families will go to Oshmans grab a bunch of camping gear, fishing equipment and other outdoor goodies and take the week or two long summer vacation at a state/national park.

[7th lutz]

Some industries are more resistant to economic downturns. Some are even more profitable when money is tight. The movie and game industry are in the sub-set that are oft times more profitable. Inexpensive entertainment is prime in hard times. Sporting goods fares well also. Instead of going to Disney World or Hawaii many families will go to Oshmans grab a bunch of camping gear, fishing equipment and other outdoor goodies and take the week or two long summer vacation at a state/national park.

Walt Disney world may not be affected as much as Hawaii. Walt Disney World offers a free dining plan. You only have to pay for tips with the free dining plan.

This is the 3rd or 4th year Walt Disney World offers a free dining plan.

Here is the info for this year http://www.wdwinfo.com/disney-dining-plan.htm#rest.

The dates mentioned on the link are for United States Citizens only. Citizens of other countries get different dates to get this package.

Free food is a big help for families. It cuts downs on travel expenses for a whole family. families only have to pay for their hotel stay, traveling costs, and admission to the theme parks.

Places that offers stuff like free dining every year would not be as affected by an economic downturns.

[chrisbid]

Some industries are more resistant to economic downturns. Some are even more profitable when money is tight. The movie and game industry are in the sub-set that are oft times more profitable. Inexpensive entertainment is prime in hard times. Sporting goods fares well also. Instead of going to Disney World or Hawaii many families will go to Oshmans grab a bunch of camping gear, fishing equipment and other outdoor goodies and take the week or two long summer vacation at a state/national park.


how is gaming 'inexpensive'? sixty bucks a pop for a new game?

quick question... if you lose your job tomorrow, would buying video games be on the top of your list of things to spend money on?

[XYXZYZ]

No way man, it's the international banking dynasties! The Morgans, the Rockefellers, the Rothschild family... If they want a worldwide recession, they'll create one! Just like they orchestrated the great depression, the Jewish holocaust, the Vietnam War, 9/11, New Coke...

We'll still have video games so we'll be occupied with them instead of discovering the TRUTH. Don't you see that arcades are dead because they switched to Namco's token currency, taking value (thus POWER) away from the Federal Reserve's quarter? Don't you people know about the secret Alladin's Castle assassinations?

http://bp3.blogger.com/_CN9uJbQ0uiI/Rl9c9Ui5miI/AAAAAAAAAZQ/VnYhHvd39FY/s1600/simpsons.jpg

[Rob2600]

how is gaming 'inexpensive'? sixty bucks a pop for a new game?

I own a Wii, so a lot of good games debut at only $20 or $30 each (Link's Crossbow Trianing, House of the Dead 2 & 3 Return, Mercury Meltdown Revolution, Endless Ocean, Pinball Hall of Fame: The Williams Collection, etc.). :)

[jb143]

The difference about this recession compared to past ones is that for the most part (outside of complaining more about it) everyone is pretty much ignoring it. Sure we'll complain about gas prices but instead of buying more fuel effecient cars like in the 70's people are still buying SUV's.

Also, It's worth mentioning that were far from another great depression...A lot of people seem to think that the stock market is doing poorly but it's actually been in record high territory for the past several years. It was mentioned earlier that only certain markets are in a recession...others are doing quite well. My company just had a record breaking year and we build equipment for the swimming pool industry.

Unless things get really bad, I doubt peoples entertainment budgets will change much.

Wait...did I say bugdet? What's that? Off to the game store...

[Jimid2]

china is booming due to US consumption, there will be no disconnect when the bill finally comes for all the debt spending

Um, far be it from me to contradict Ameri-centric myopia, but China is booming because of many, many reasons, including world-wide expansion by Chinese foreign investment (they are THE power block of note in Africa right now). Ultimately, a slowing of growth in some countries does not equal a "recession", particularly if those countries have been growing explosively over the last decade. In truth, the only major economic power in the world that's likely to suffer substantially due to this US recession is the United States. The rest of us are really much better off than that economically...

[7th lutz]

The difference about this recession compared to past ones is that for the most part (outside of complaining more about it) everyone is pretty much ignoring it. Sure we'll complain about gas prices but instead of buying more fuel effecient cars like in the 70's people are still buying SUV's.


You forgot to mention gas prices is causing airlines to layoff employees. Airlines like Midwest Express said they laid off workers because of gas prices. Midwest Express actually told the local media that. The same week midwest express reduced their workforce, 2 airlines declared bankruptcy. The 2 airlines blames gas prices also.

Gas prices is affecting the price of items in stores. Products get shipped to stores. Products or goods in a store are not getting any cheaper as a result. Some products get shipped by truck.

There is a chain affect with gas prices. The gas prices are not high enough to to show a major effect yet.

Gas price complaints are more than people paying at the pump. It also is about the increase prices goods in store.

[jb143]

I didn't forget to mention anything...I just choose not to write a book mentioning everything affected by everything else. :p

Of course high gas prices are going to effect other things. My point was that just because there's a recession in some industries others will actually improve.

But as far as todays society goes...it seems that many people would rather go deeper into debt than to actually cut back on anything.

[MachineGex]

Nope. How many bills does an average 13-25 yo have these days? Young people will always have money for this stuff because they are still young and have money to blow on videogames because they have nothing else to pay for.

The bread & butter of most game stores are the 25-40 year old males. Teenagers really don't have enough money to matter as much. Sure they may buy a game every month or two, but they just don't have the income like the older males. Mom's with smaller kids (children like 7-12) make up a pretty good share as well.

I think the whole country is gonna be in a little bit of trouble with the economy. Video games will do better than most. I tend to believe the worst is yet to come(like the next 2-3 years). Wait til gas is at $4 next year. You will see some people experiencing some "real" hard times. Everyone who pulled all the equity out of their homes to buy new cars and toys are gonna have a wake up call. I have a friend who bought a house in 1990 for $96,000. He has re-financed his house so many times he now owes $300,000. If he was smart, it would have been paid off by now. He liked buying a new car every two years and paying down credit cards so he could run them up again. :(

[chrisbid]

http://market-ticker.denninger.net/
http://globaleconomicanalysis.blogspot.com/
http://patrick.net/housing/crash.html

have fun

[Icarus Moonsight]

how is gaming 'inexpensive'? sixty bucks a pop for a new game?

quick question... if you lose your job tomorrow, would buying video games be on the top of your list of things to spend money on?

Compared to other forms of entertainment Movies and games yield some damn good bang for the buck. I budget about $50-$100 a month for gaming. To put equal time in another form of entertainment that budget would have to double at least. If you are talking concerts and such then the factor would be well over 10 times...

If I were to lose my job tomorrow the first thing I would do is get another job. That query was rather silly anyways. Entertainment money is always the first to get sacrificed for needs. My point is, in most cases there is a little left. Even when money is tight. You try to optimize your "play money" in those situations and you can do much worse in terms of value than gaming.