The effects of the economy on the videogame market

[Mendicate Bias]

Dodece said:
There is no such thing as a recession proof industry, and especially no such thing as a depression proof industry. When we look at the games industry we are probably seeing a deferred reaction, because it was a logical downgrade in entertainment budgets. However there is little doubt that entertainment budgets themselves will be curtailed if economic trends persist.

Gaming has reaped a shortfall this year as consumers curtailed expensive entertainments they instead gravitated to more cost effective entertainment. A game has longer entertainment longevity, effective resale prospects, and has few secondary expenses. Further more it can be shared with others providing even greater benefit.

This all said the increase can be followed by a comparative decrease, and a polarization of the audience towards particular games. Most specifically games with greater replay value. Gaming is like most anything else consumers when they need to will do what it takes to stretch their money to the greatest benefit.

Let us use an example of a person that spends two hundred dollars every month on entertainment. Prior to economic hard times they would buy a retail game every other month at full retail price. The rest was spent on cable, eating out, movies, music, and group activities. Once the economy started to go south, and the price of gas started to go up they shifted to buying two games a month. The games went farther. That would be a four fold increase.

However if the economy continues a downward spiral there is little doubt that fears will curtail an entertainment budget, and the guy buying two games a month might return to a single game every two months or even less. What happens when the budget reaches a hundred dollars a month. Not enough to buy a game every month, have cable, have broadband, and occasionally go out with their friends. So economic pressures can force the games industry to retract its initial gains, as everyone has to fight for a diminishing entertainment dollar.

Bottom line if the economy turns below a certain point then gaming that enjoyed the initial fruits could become the industry that flounders the hardest. While it may be good entertainment value it also usually requires the greater up front investment. Now were you placed in a position between deciding to buy a new game or have cable which would you choose? After all most gamers have a couple dozen games to play you can make due. However unless you have a massive unwatched movie collection you might have a problem letting go of the more diverse entertainment.

Gaming is not this generations movies. This generations movies are cable and the internet, and for most consumers those entertainments will take priority over buying a new video game let alone a console.

Thats exactly the point I'm trying to make

If you had to choose between having internet or buying a new console, which would you choose?