What effects will a recession have on the video game industry?

[tokilamockingbrd]

Avinash_Tyagi said:

tokilamockingbrd said:
recessions last between 6 month and 3 years... if they see it coming they can try and nullify the effects of a recession by preemtively adjusting rates. Greenspan was the master of this, the US in fact SHOULD have had a recession in 1996 but greenspan saw it coming and he adjusted rates PERFECTLY... this "soft landing" was the key to the 10 year boon in the US economy without a recession which lasted until the dot com bubble.

 A few differences, first off is the fact that consumer spending is weakening, even in earluier recessions in the past 20 years, consumer spending has been going strong, but right now that isn't happening, becaus of low saings and loss of equity in their homes, in adiition the FED is trying to slash interest rates to prop up the market but we are entering an inflationary cycle, see back in the 90's we had productivity booms and a technological boom, but today no such thing is occuring, this will be much harder to get through than earlier recessions

Yes, the tech boom made the market more effiecent which made it possible for our economy to maintain a high rate of growth for a long time. The real problem now is the credit crunch, it is REALLY hard for average Joe to go out and get a loan for a house, no house sale= equals no trip to lowes/furniture store/best buy thus the lower consumer spending index.

 Right now the markets are adjusting themselves to the housing market/ gas prices and it is hurting consumer confidence... Needless to say most recession are mostly phycological.