Gamasutra - Analyze This: Is The Video Game Industry Recession-Proof?

[They are the professional analysts whose job it is to research, keep track of, advise their clients, and opine to the media about the gaming business. Analyze This cuts right to the chase: Rather than reporting on a subject, and throwing in quotes by analysts to support or refute a point,

Gamasutra offers up a timely question pertaining to the business side of the video game industry and simply lets the analysts offer their thoughts directly to you. Each person's opinion is his own and will (probably) not necessarily agree with their fellow colleagues'.]

Since the year began, it's been a worrying topic in business news and on the minds of Americans: recession. Yet it appears that the video game industry has been immune to the effects of an economic slowdown and growing lack of consumer confidence -- or has it? Could, in fact, the industry also be facing an economic downturn sometime later this year?

We asked Nick Williams of OTX, Jesse Divnich of The simExchange, and Ed Barton of Screen Digest:

Do you believe, or project, that game consumers will spend less, more, or about the same this year?

How do you think the various game consoles and handhelds will fare in the market throughout this year? Is any one of these platforms going to face sales challenges because of the slowing economy?

Comments

Anonymous

9 Apr 2008 at 10:12 am PST

I think its not so much the industry as a whole as much as certain sectors of the industry that are immune to recession. I mean if you consider companies like blizzard they are getting more profit from customers outside of the country than inside. I still think that companies that can't reach out overseas will suffer just like everyone else.

norb rozek

9 Apr 2008 at 10:18 am PST

Taking the notion of "substitution" ((i.e., during times of economic strife, consumers replace a more costly good with a similar, less costly good)) in a more intramural sense, it's quite possible that the hand-held market stands to benefit from the recession if consumers begin substituting hand-held purchases for consoles purchases.

Caswal Parker

9 Apr 2008 at 4:31 pm PST

Games and other forms of entertainment offer escapism from real life and games I believe offer the best kind of escapism, being in complete control of a character in an imaginary world.

Due to that I think the games industry is naturally recession proof as people try to escape from the reality around them.

Lorenzo Wang

9 Apr 2008 at 4:53 pm PST

While we may not know for sure if games are recession-proof, they are certainly more recession-proof than movies. The $/entertainment ratio is much greater, and make games a more prudent buy.

Anonymous

10 Apr 2008 at 9:46 am PST

Mr. Barton clearly has the best grasp of the three

Anonymous

10 Apr 2008 at 12:36 pm PST

Finally an Analyze This without the likes of Michael Pachter.

Piotr Zygadlo

11 Apr 2008 at 11:30 pm PST

Mr. Barton overpriced hardcore gamers purchasing power. This times are out. Now, when you have every game with many extension sets and sequels, when is so many online communities, hardcoreplayers may abaddon some "worse" titles if there will be lack of cash.

And recession is world-wide. Don't suppose, that oversees companies will handle better. Big may more - as always.

I think, if recession stay for long, there will be less sequels and more games like Portal (small and inovative). And of course great bunk of casuals.