Will Economic Recession Impact the Video Game Industry?

[Easy Rhino]

Unless you have been living in a cave for the past 6 months, you are aware that the global economy is in recession. Journalists for The Economist magazine have written an interesting article on how the video game industry has proven, so far, to be recession proof. Games sales in America were up 35% this year in October over last year and hardware sales were up as well. However large software developers, like EA and Activision Blizzard, are reporting losses. For a more detailed explanation check out the article.

View at TechPowerUp Main Site

 

[Gam'ster]

I know ive had to say " i cant buy X game this week ".
But i think next year will be a tough one for any industry especially with more job losses after the new year.

 

[BUCK NASTY]

Out of work people need games to play more than ever. I work 12 hrs a day but still get 1-2 hrs of gaming in @ night.

 

[3870x2]

Obama plans to give the states a pretty big stimulus, again, and this time it is proposed to be significantly larger. Although there hasnt been any figures stated, I'm guessing anywhere from $4000 to $6000. Better to give it to the tax paying citizens than the corporate companies driving their bentley GTs to the meetings to ask for money. Maybe if they stopped lining their damned pockets with gold, their companies could survive, and the $12 per hour workers dont have to lose their jobs, and subsequently their 401k because Mr. Big Wig defaulted, took all the money, and ran.
for all of those who dont know, Mr. Big Wig is living the life, while his 40,000 workers that made him his damned money are out a job.
Just my $.02

 

[Easy Rhino]

I know ive had to say " i cant buy X game this week ".
But i think next year will be a tough one for any industry especially with more job losses after the new year.

yea, next year will be tough for everyone. ive been in the same situation where ive had to put off buying games for a little while.

 

[Easy Rhino]

Out of work people need games to play more than ever. I work 12 hrs a day but still get 1-2 hrs of gaming in @ night.

yea, as the article points out, some people think it is because of a tight economy that people are not taking expensive vacations and instead spend the 50-60 bucks on a video game that they can relax too for a few weeks, months.

 

[PCpraiser100]

I don't think the recession will impact the industry, in fact, we're fairly close to resolving it. Besides, each company is making millions, excluding 3DRealms, all through sales and stock marketing. However, I think it could affect the pricing of every copy .

 

[Wozzer]

Unless you have been living in a cave for the past 6 months

- Made me chuckle.

I don't get the same feeling as I used to as a little kid when new games come out.

 

[Easy Rhino]

I don't think the recession will impact the industry, in fact, we're fairly close to resolving it. Besides, each company is making millions, excluding 3DRealms, all through sales and stock marketing. However, I think it could affect the pricing of every copy .

personally i think we are a ways away from resolving this issue. but i wont get into an economic theory flame war here. this is from the article. it is something to think about.

Electronic Arts (EA) and Activision Blizzard, announced losses of $310m and $108m respectively in the most recent quarter. THQ, another big publisher, lost $115m. On December 9th EA said its revenues and profits would be lower than expected in 2009, owing to disappointing holiday sales. It said it would cut 6% of its workforce and focus on fewer games.

 

[intel igent]

my answer to your question: YES

the recession will affect EVERY industry in many countries

 

[DrPepper]

[comes out of cave]

What recession ?

Since a recession is a good excuse for people to pirate then yeah it more than likely will suffer to a degree.

 

[Rebo&Zooty]

These company's aren't hurting, nomatter what they want you to belive, WoW is still keeping blizzard in the $$$, if they say different they are flat out liers.

EA deserves to get a nutkick, but they arent hurting eather, again no matter what they say, how they get in the red is buying up to many smaller dev houses/ferms so they can rape their content till its un-profitable, then cut and run on the employees of said firms.

IF game companys want to turn the whole situation around,drop the useless DRM and drop per unit prices, will cut profit per sale BUT will get them FAR more sales, look at games like serious sam, it came out at 19.99, sold millions of copy's, and was honestly a fun game(effectively a doom clone with far better gfx and such) it sold VERY WELL because 1. the demo wasnt crippled crap and 2. the price was right, the company did make money on it so much so that they put out an expansion AND 2nd game(that didnt sell quite as well due to higher initial price but was quite impressive in its one right)

look at Sins of a Solar Empire, sold millions with little to no publicity ( I only heard about it online from friends for example ) it has NO DRM AT ALL, yet it sold/sells like mad, If more company's follow stardocks example they WOULD see increased sales, EA is being bitch slapped for using draconian DRM, and rightly so, when you treat your paying customers like criminals/theives what can you expect but to loose many of them?

the game industry go's in cycles, i wont cry if the likes of EA and VUG die, because it will just signal the end of this large corporate buildup and a move back to smaller independent dev houses that tend to give you a more interesting game experience instead of clones of what you have already played with different gfx.

this has happened b4, it will happen again, given time, just as the ecoimy will recover as it has b4, just hope we get the recovery faster then its happened in the past.

 

[Haytch]

I dont think they will suffer or have. These companies can only put themselves at a loss for we demand games now more then ever with more pc users now then ever. Other then overpricing a game title, creating a shit one alltogether with too many bugs, little to no dev support or a game that requires year 2035 technology to run at 100 frames are surely was to bring down any game company.

 

[SK-1]

Since a recession is a good excuse for people to pirate then yeah it more than likely will suffer to a degree.

That should be the last nail in the coffin for any prospective new games Oh well, mine sweeper is fun...

 

[DrPepper]

That should be the last nail in the coffin for any prospective new games Oh well, mine sweeper is fun...

have you ever played minesweeper in dx10 ... puts crysis to shame.

 

[SK-1]

have you ever played minesweeper in dx10 ... puts crysis to shame.

 

[intel igent]

have you ever played minesweeper in dx10 ... puts crysis to shame.

you think that's good you should check out mahjong!

 

[DrPepper]

you think that's good you should check out mahjong!

I'l give it a whirl when i get my other 8800GT back so I can play it maxed out

 

[flyin15sec]

Video gaming will be last to be affected. It is cheaper to spend $50 on a game and spend the weekend home, than $100-$200 out on the town. Your social life may start to hurt, but your wallet won't.

 

[peach1971]

Here´s a very interesting youtube channel on the issue financial crisis: http://www.youtube.com/profile?user=jberni1&view=videos

Joern Berniger points out the logic that the impact of the crisis will have large effects in a short time on those markets where people are rapidly willing to spend less money for products: gastronomy and entertainment electronics.

BTW:
The crisis is often described as "Trust Crisis " and we are told that the only solution is to regain trust.
Well, if that ain´t some pretty nice global elite marketing strategy...

Think at least twice after being fed by corporate mass media.
http://video.google.de/videoplay?docid=-3969792790081230711&ei=OYZNSbagNZHG2gKTkfH2Cg&q=corporation

 

[Triprift]

I think the gaming industry here will struggle as you may or not know we are charged exorberantly high price for games compared to everywhere else.My guess is with less money in our pockets these companies will have to feel the pinch. Are economy is quite stong compared to the rest of the western world but my own guess is next year will see lots of job cuts in both private and public and that will effect gaming companies cus ppl will simply not have the money to buy them and what money they do have will go on essentials not luxury items.

 

[AddSub]

Will Economic Recession Impact the Video Game Industry?

Of course not. For every massive developer and publisher like EA there are half a dozen of mid-sized ones and tens of smaller ones. If you count in independent studios and developers then we are talking about hundreds upon hundreds if not thousands, globally anyways.

Let's face it, some of these major publishers and developers like EA would be in trouble right about now even if it wasn't for the now obvious economic troubles. I mean really, for example Need For Speed series was all downhill after NFS High Stakes aka NFS4 circa 1999. Everything that came after NFS4 was based on the "The Fast and the Furious" type of setting, with the whole underground "sh-treet racin!" [sic] theme which was directed straight at your average pasty 13 year old Vin Diesel wannabes.

And even though it might seem weird, most of the relevant statistics from Entertainment Software Association show that 13 year olds are not your biggest money makers as far as video game market is concerned. Here is a quick quote:

"The average game buyer is 37 years old. In 2005, 95 percent of computer game buyers and 84 percent of console game buyers were over the age of 18"

The latest statistics show more or less the same numbers. Trust me, when I go looking for a racing/driving simulator, last thing I'm looking is for some shiny pimp-my-ride "sh-treet racin!" [sic] title. That crap don't sell as far as any real money is concerned and when EA finally goes under, I hope other publishers and developers of similar titles will take notice.

 

[FordGT90Concept]

I think EA and Blizzard reported losses because they expected to make more in 2008 than they really did. That doesn't mean they are necessarily feeling it, they just didn't expect it.

Stimulus packages have never worked. The only way I could see it working is if it forced people to spend it on building new homes (recession/depression are often determined by home construction figures) or paying off loans (free up some money in banks that grant loans to build houses). If they do a "here's $600 USD we bought from China, spend it how you like" thing again, I'd argue that what Congress is doing is criminal (bribery to reelect them with our own money).

I'm not certain why people are buying lots of games in 2008. But yeah, if it gets to the point where you have to decide between putting food in your mouth, fuel in your car, paying your rent, or buying a video game to pretend those other issues don't exist, obviously the video game sales would go way down.

 

[DrPepper]

For hardcore WoW players this will be a tough choice when the recession is at its worse ... eat or pay for the WoW subscription

 

[Haytch]

For hardcore WoW players this will be a tough choice when the recession is at its worse ... eat or pay for the WoW subscription

ROFL !






Addsub do you play Live For Speed ?