| Picko said:
Videogame inflation is probably much higher however, particularly considering that the average game is now a higher price than it was in 2007. It is likely that a significant proportion of the rise in revenues can be explained by increased sales of both Xbox 360 and PS3 games. Of its own, this isn't a bad development, afterall revenues are increasing at a faster pace than economy wide inflation. However, the price change is not an exogenous development - it came as a response to higher funding costs, which have continued to rise as financial conditions have deteriorated. We cannot say anything about the health of the videogame industry without looking at the cost side - particularly in this economic climate. |
Oh, I just assumed it was abundantly clear that if bottom lines are dropping while revenues are soaring, it was because companies were over-investing in development. I'd be curious to see how you link that to financial conditions, though. I would just say that publishers are paying to create more content and more expensive content than the market is willing to support. Oversupplying in an attempt to compete with other publishers.
It would be great if there was a source which tracked how much companies spent in aggregate on video game hardware and software production.
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