Is Wii demand waning? Stock market says "yes"

[Spankey]

greenmedic88 said:

BengaBenga said:

FishyJoe said:

Pay no attention that the Japanese stock market is down 4%. Sony is down 4%. Just about every Japanese company is down 4%.

But yeah, some guy said it so that must be the reason it's down 4%.

 

This.

All panic for nothing. Investors usually follow market trends. There are not a lot of investors that actually know whether demand for Nintendo product is low, they just follow the trend for consumer electronics.

The Dow-Jones slummed on lower consumer demand, which could affect Nintendo. Japanese investors just followed the US. This doesn't mean it actually will affect Nintendo. If it will it will mean a lower demand for videogames across the board. Pachter btw thinks that in a recession more people will buy videogames, because value for money is bigger than say a day in Disneyland.

And yet the stock is unlikely to reflect the "recession-proof" tendency of the video game industry due to lack of investor confidence as well as underlying factors like the current exchange rate.

I agree; video games, much like movies, tend to do better as a form of inexpensive entertainment during economic downturns. The only problem is that the gaming industry has expanded (along with individual project budgets) to the point that few big budget games stand the chance to recover costs, much less profit comfortably.

So what does that mean? Budget priced games and only the most hyped games have the best chances of selling well under such economic conditions. Budget priced hardware stands to benefit most as well (not good for Sony).

We'll see how well theory matches actual results come December...

 

As recession-proof as the video gaming industry might be, the HDTV industry might not be. the adoption of HDTVs or lack thereof will be critical for two of the big three as they generally look better in HD.

Thats one of the reasons why I think the Wii is in the best possibe place at the best possible time right now as it's not affected  by people needing a HDTV to get the best enjoyment from their games.