Here we go again, Dow plunges

[FishyJoe]

TheBigFatJ said:

Ail said:

 

 It shoudn't impact most of the major games we buy.

I could be wrong but I don't think the major publishers ( Activision, EA, THQ, Take Two, Ubisoft ) actually resort to credit much to finance their project .

Activision has no debt, neither does Take Two. If credit was used to finance projects at those company you would expect them to have some debts..

Further, games development will not be significantly impacted by short term market movement, even if they are extreme movement.  If the market is in bad shape for over a year game devs may take fewer risks on new development, but for the industry to make even a 50% change, it would take more than a year of bad market. 

Even in that case, you'd expect more of the shovelware to die down than the quality and good selling games.  Things that sell well will continue to be produced.

You also need to realize that games are very inexpensive.  An average gamer probably spends $1000 or less on gaming a year -- very low compared to an average middle-class entertainment budget.  That's only a couple of tickets to football games, for example, one semi-decent dinner a month for a couple. 

Video games aren't cars -- they're cheap.

 

Throw out that middle-class entertainment budget stuff out the window. The consumer model is going to change significantly. The market failing is just the first symptom of a bad economy.

Video games are completely discretionary. Without consumers buying on credit, that takes a huge number of game sales off the table. In additional, retailers will stock fewer games since they don't have to credit to buy more games.

Video games may be cheap, but used games are even cheaper. Why buy a $60 game today when I can wait a couple months and buy it for $30? That is the kind of thinking a consumer is going to have in a bad economy.