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Video game industry analysts quizzed regarding a recession-proof market, expenditures

Posted Apr 9, 2008 at 8:28PM EST by QJ Staff

Listed in: Interviews Tags: Ed Barton, interviews, Jesse Divnich, OTX, Screen Digest, Sonic

Three of the video game consoles out in the market today - Image 1

Industry analysts may be good sources of information, especially when you get to throw tough questions at them. Fortunately, OTX's Nick Williams, The simExchange's Jesse Divnich and Screen Digest's Ed Barton took the time to answer the following questions:

Do you think the video game industry will be recession proof this year?
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?

Williams remarked on the resiliency of the industry that will likely last well into 2008, citing NPD Group statistics and Nintendo's mass-marketing strategy. He admitted that it would be a mistake to say that the industry would be completely recession-proof. In the event that one should hit the gaming industry hard, Williams said that Wii titles could end up struggling.

For his part, Divnich echoed Williams statement regarding a 100% recession-proof industry. He also said that gamers may cut back on expenditures depending on whether they're core gamers, casual gamers or hardcore gamers.

According to Williams, casual gamers may cut out video games altogether; their hardcore counterparts may prioritize the games they really like. Core gamers may attempt to cut back expenditure on things like movies and vacations before they do the same with video games.

Finally, Barton noted the entertainment value that video games provide, even during times of recession. He cited the robust sales of such games as Sonic the Hedgehog 2 during the economic malaise of the early 1990's as an example. The important things to industry growth, Barton said, are the hardware cycle and games release volume and pipeline.

After all's said and done, Williams, Divnich and Barton agreed on one thing: the video game industry is one tough nut to crack. If you want the full report, feel free to head on over to the source via the link below.

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Core gamers may attempt to cut back expenditure on things like movies and vacations before they do the same with video games.

Not only core gamers, I bet. Video games are indeed a cheaper alternative than vacations or out-of-town trips. And movies aren't as interactive.

Anyway... all economic bubbles burst.

# I still see people... — RexNox 2008-04-10 07:24

Just because the country as a whole isn't growing, doesn't mean that the video game sector will quit making purchases.

In addition, there are to very large segments for gamers to fall back on: used games and greatest hits.

It's not like the airline industry. These gaming companies can continue to create features/content that increase the value of the games.

I would agree that the Wii segment would get hit hard. But, Nin's ripping those people off like nobody's business, so lowering prices to increase demand is nothing for them. And, those people are ok with getting ripped off. So, Nin doesn't really have to lower prices.

# my answers — lavino 2008-04-10 08:28

1. Do you think the video game industry will be recession proof this year?

This year? yes because if you are active stock trader you will notice the market attitude is all positive. Most actually really believe that the subprime problem is over and done. So unless something really bad economically happened we'll see US pull out of recession 2nd half of the year.

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

About the same. There might be a shift here and there but since no completely new console/handheld will come out in a year or 2.

3. 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?

If we are talking about just games and the factor is slowing economy then it will affect everything pretty much equally. Game pretty much are in the same price range for each console type. Some Wii games tends to be cheaper at first but over the time xbox or ps3 game is about the same pricing level after new release period.

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