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Analyst: economic crisis bad for small studios, console life cycles might extend

Posted Oct 28, 2008 at 7:22AM EST by QJ Staff

Listed in: PS3, Wii, PSP, Xbox 360, Nintendo DS Tags: Colin Sebastian, Michael Pachter

I know analysts tend to have a bad rep with most of you guys, but hear this guy out.

Analyst Colin Sebastian talks about how the economic crisis will affect game studios and the life cycle of consoles, something you guys might be concerned with. No "well gee, Mr. Obvious, thanks for the duh" moments here.

Looking at launch sales, Sebastian observes that games still sell strong at first but drops off rapidly, suggesting that the economic crisis hasn't affected core gamers' taste for games, but has left casual and mass market gamers more cautious with their cash.

Going with this line of thought, it suggests that smaller studios are in trouble, while major publishers will benefit because the market will have greater demand for blockbuster titles:

Naturally those titles selling particularly well will receive reorders. In contrast, there will be incremental pressure on smaller publishers as well as moderate or weaker-selling software.

Like Michael Pachter though, he is optimistic that the video game industry will remain strong, noting that console sales remain steady despite being more expensive than other forms of entertainment gadgets out there.

Talking about consoles, Sebastian says that it's very fortunate that the economic problems came while in the middle of the current consoles' life cycles, although this may mean we won't see a new generation pop up in a while:

We are midway through the current cycle, and even if the industry feels the consumer pinch, a prolonged economic downturn could ultimately extend the length of the cycle as hardware manufacturers become less inclined to spend heavily on expensive new platform development.

If that's true, we might not see rumors of the Wii 2 and Xbox 720 come true anytime soon.

Via Gamasutra

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It feels good to 1) be the first to have predicted this in QJ, 2) own ISOHaven, and 3) be correct.

Don't believe me? Notice the comments on the article about "the video game will remain strong" and what I say about small games (like echochrome and fl0w).

Also notice how ISOHaven has no clue, like Mister Common Sense was fair in pointing out.

# I only hope — Cortador 2008-10-28 08:47

that all this turns out to the best.

# anyone play my qj little big planet level yet? — TouchDaSkeleton 2008-10-28 11:11

its named qj.net ! lol

# LMFAO — Xis 2008-10-28 18:36

eh def was thinkin it, we reached so many new mainstream console price points this Gen its really the truth Wii 250 XB 400 PS3 600 all beyond past gen prices but not by much with inflation good catch man and Congrats on Shutting SHT DOWN it ALWAYS feels good

# Cant wait — Xis 2008-10-28 18:42

To see "WTF!?!?!?!?!"s all over this article....hmmmm

# Hmmm...this is both good and bad... — kittykat 2008-10-28 20:08

This is a good thing because that means that gamers will not have to be shelling out more cash for new console systems just to keep up with the video game market. This translates to hundreds of dollars in savings, and the full potential of current game systems being explored before newer ideas are implemented.

However, this is a bad thing because it means game developers who are new to the scene and bring fresh ideas to video games will be unable to promote those ideas, meaning less creativity and competition. And in any industry less competition is not necessarily a good thing for the consumer.

# WTF!?!?!?!?! — ISOHaven 2008-10-29 07:55

@RommelTJ

WTF are you talking about? I completely agree with this article and this article goes AGAINST everything Mr. Common Douche Bag said.

You are seriously confused. You don't own a damn thing other then your own stupidity.

You also didn't predict anything that many others haven't predicted. Don't ASSume for one second that you've read EVERY SINGLE POST on this site.

Let me also point you in a direction you can't seem to find yourself:

"Going with this line of thought, it suggests that smaller studios are in trouble"

LINE OF THOUGHT

SUGGESTS

None of this is fact or reality yet. These are OPINIONS. You'll also note that they are doing nothing to evaluate the online titles. So your comments in regards to flOw are still worthless. This article basically has two analysts with opposing views. One is right, one is wrong or both are slightly right and wrong. Either way there is no win or lose here and your comment clearly leads us to believe that you THINK you've won something. How sad.

# I won — RommelTJ 2008-10-29 11:08

because I made you upset, you silly head.

# OWNED! — Xis 2008-10-30 11:00

thats it..

# WTF!?!?!?!?! — ISOHaven 2008-10-30 12:48

Gee, what solid arugments you guys have.

It's the famous "just because" defense.

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Analyst: economic crisis bad for small studios, console life cycles might extend

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