What Happens In A Gaming Industry Shakeout

Chris Kohler's Game|Life blog has a post discussing what a real games industry crash looks like. From the article: "But I hate the ridiculous amount of misinformation that gets spread around about what happened to the game industry in 1984. And the fact that the awful years of 1994 and 1995 get totally whitewashed in history articles like the above, as if the games industry has been just peachy ever since Nintendo got here. Well, it hasn't been. And what happened in 1984 isn't what people think." His post is a reaction to previously mentioned Inquirer story.

Comments

Not going to happen

[alvinrod]

I don't think the video game industry is capable of a crash at this point, or even much of a shake-down. Even if the next generation of game consoles and the games themselves are seriously underwhelming, the industry is at a point where it could weather the storm for a while.

First of all, Microsoft has billions of dollars that it makes from other business divisions, even if its games division takes a billion dollar shelling every year. Interestingly enough, this has already happened and they've said they're still staying in the game. The Xbox 360 would have to be a huge failure for them to get out of the game at this point. If the recent buzz about the system and the fact that someone can sell them on ebay for several thousand dollars is any indication, I don't think they've got much to worry about.

Next up is Sony which has made a lot of money on the PS2 and has the largest install and fan base. It might be slightly eroded this generation, but like Microsoft they have other company divisions that can prop up their games division if they're hit by hard times. However, of the big three, I'd put them in the worst position right now.

Finally, there's Nintendo. If I've learned anything about Nintendo it's that even if their sales are crap, they still manage to turn a healthy profit. The last few /. articles about the Gamecube have been about falling sales figures, but somehow Nintendo is still in the black. There are a lot of questions about if they'll survive for much longer, but they've been hanging on for a while now and building up a large bankroll. Their conservative attitude suggests that they won't be going under anytime soon.

The gaming industry is also a lot bigger than it used to be. Sure, companies are still packaging crap in cases that they try to pass for games, but when the user base is so much bigger than it used to be, you can manage to stay afloat with mediocraty. The industry might undergo a slump or slight depression, which I could easily forsee, but the same kind of "crash" or "shake-down" mentioned in the article? Nah...