Game Industry Optimistic About Surviving Economic Crisis

CNet is running a story about how the gaming industry is looking at the recent economic troubles. Despite their status as luxury items, games and game systems have seen strong sales numbers in recent months, and that trend is expected to continue into the holiday season. Most companies are optimistic, despite the fact that many of their stock values have been hit hard and that analysts' views are divided on whether game-related purchases will be one of the first things cut from consumers' budgets. "'I do think that the video game industry is going to do reasonably well in this time of recession because video games are a pretty damned efficient use of time,' said Bridges. 'That said, the...industry has some other problems that it has been ignoring for awhile and that are creeping up on it.' Essentially, Bridges explained, he thinks that the dominance of giant publishers like EA and their general reliance on physical, in-the-box, units, can't hold up. Instead, he said, new tools, ubiquitous broadband and hungry independent developers are going to all combine to eat away at the continued supremacy of the $60 big-name title. And that could spell big trouble for the industry."

Comments

Re:simpler explanation

[AKAImBatman]

It's really quite simple: Teenagers buy most video games. Teenagers don't have investments and mortgages that tanked nor are they good at saving instead of spending.

Teenagers have not bought the most video games in quite a long time. In fact, the average age is 30 with 65% of game players over the age of 18. If the video game industry were to see a drop in buyers over the age of 18, they would suffer just as greatly as the rest of the economy.

I know the entertainment aspect may seem like too easy of an answer, but the historical data does support it.

During the beginning of the Great Depression, one of the most popular forms of entertainment was dancing. It usually only cost a few cents to get into a dance hall. Once there, the dancer could remain for most of the night. This was so economical that it led to a new form of sport: Marathon Dancing.

At first this extreme form of dancing was done to achieve new records. Then the dance halls started to get in on the act, and began promoting competitions. Soon, dancers would be on the floor for months at a time, with only 15 minute breaks every hour or so. (Yes, 24x7 on the floor. They slept like wolves at best!) These long marathons gave dance halls the opportunity to encourage or stage situations worthy of a soap-opera. Fights broke out, relationships came and went, people struggled not to lose their cool over the grinding months, and even weddings were performed on the floor!

The public just ate this stuff up. They spent their nickels to visit these dance halls for entertainment. If they were hungry enough, they might even try their hand at a marathon. While the lack of sleep was a killer, dance halls regularly served 12 meals a day! Quite a difference from standing in a bread line for a meager meal.

Eventually, dance was replaced with another non-stop form of entertainment: Movies.

You know the stereotype of the Bell Boy with his flashlight leading people into the dark theater? Well, there's good reason for that. Back during the depression, the movies never stopped! For a mere nickel you could visit the movies and watch for hours before it looped back to something you had seen before. News reels, Comedies, Cartoons, Features, etc. It was a true potpourri of entertainment. And since there was no television to compete, visiting the theater was one of the best ways of keeping abreast of the latest news and entertainment.

Speaking of television, yet another form of entertainment took a bite out of the market during the Depression. Radio saw a surge in public life. From comedy, to the original soap operas, to FDR's Fireside Chats, to Late Breaking News, to Orson Wells' War of The Worlds broadcast, radio was an incredible escape from the ugliness of everyday life. And every family who could manage to scrape together enough money had one.

I won't bore you with further details, but such a trend for escapist entertainment is seen throughout modern history. The worse things get, the more we turn to outlets for escape. With television on the decline, I see absolutely no reason why consumers would not find value in Video Games. They are the newest and hottest form of escapist medium. Eventually they too will be replaced by a new medium, but for now it's reasonably safe to bet on video games during any period of strong economic downturn. :-)