| MontanaHatchet said: How the hell could the industry crash when it's making billions?!! Silly fangirls... |
Easily, if the industry is losing even more billions than it's making. Try reading through the financial reports of the major software publishers. Sony is losing (a lot of) money. Microsoft is losing money (Halo launch quarter excepted). Take-Two is losing money. THQ is losing money. Sega is losing money. Konami is losing money. Midway and Atari are losing so much money, they're probably going out of business. EA will post their first net loss in almost a decade this year (prediction, but I'm telling you, it's going to happen).
Who's actually making money? Nintendo, on the backs of Wii + DS. Activision, mostly due to Guitar Hero sales. That's about it right now; some other companies are breaking even, without turning big profits. Development costs for games are simply too high, and the complexity of these games are preventing enough new gamers from coming in to make up for the rising expenses. These games aren't even bad - many of them are quite good - but the overall economics of the market are very shaky. There are tons of recent examples from this year; I can list everything from Stranglehold to Heavenly Sword as proof.
When 80% of an industry's major companies are posting losses, the industry is in crisis mode. Don't get caught up in the hype over how revenue continues to soar higher every year. The net income (profit) for the gaming industry is in terrible shape right now. The market isn't going to crash, but (as shams and Kruze said), it will contract in the next few years. We'll see some big names going under, for sure. The only way that the industry has survived as long as it has in a pretty stagnant environment has been through market expansion (especially into Europe) and ridiculous deficit spending from big pocket corporations like Microsoft and Sony. Neither can last forever.
End of 2008 totals: Wii 42m, 360 24m, PS3 18.5m (made Jan. 4, 2008)
