It seems pretty clear right now we're headed into a recession. The Japanese market is already in a full blown recession. What possible impact could this have on the industry?

Developers - It will be much harder to raise capital for new games. It may be extremely difficult for big budget games to find funding. Some developers will get acquired because they are unable to remain in business.

Consumers - Could be a wash. People may decide to stay home more, which could increase sales. On the other hand consumers will have less money to spend.

Sony, Nintendo and Microsoft - Sony and Nintendo could be hurt very badly by the falling dollar. Sony and Microsoft could be hurt very badly by a global slowdown, Nintendo to a lesser degree depending on how the video game industry goes.  

I think developers would be a lot less willing to spend tens of million dollars on new IPs and especially ps3 games. Xbox 360 would be fairly affected, but not to the same extent. There will likely still be plenty of shooters around for it... but ps3 games are a huge gamble and, except for rare occasions, have produced little -- if any profit.

Wii will be fairly unaffected.

i think that it will affect the number of games gamers purchase. so high quality titles should still do well, but titles in the intermediate range would suffer more.

Well if people have less to spend then of course there will be less buys. Of course corporations then will be less likely to produce more and in turn retailers will be less likely to buy produced shipments from those companies. Basically everything goes down.

Of course though the hardest hit items will probably be the ones that are more expensive. So even more imiportant to get those prices down. As $400 now may seem reasonable but down the line will be unacceptable. companies need to start looking to get to the sweet spot of $199, something that might be impossible for the PS3 for at least 2 yrs.

I think we'll see continued strength in the handheld market, the games and systems are cheaper to buy and make. Big blockbuster titles will still be around but the new industry standard for such games will be length, multilayer and replayability, I see people being quite willing to still spend $60 on a game but less willing to buy as many games, nor will they be likely to risk their $60 on a new IP, giving established brands an edge.

i don't think we will see any disturbance in the gaming market.

Videogames are relatively income inelasatic, so most titles should perform well. Brands will have an edge. Casual titles may suffer a bit as casual gamers will be more wary of quality. Devolpers could struggle, although midway, infrogrammes and atari are most at risk because they're already struggling.

Media markets always thrive during recessions, so I don't expect any significant damage to the industry. The only effect will be to slow down the adoption of HDTVs, due to their comparatively high price, which may slow down the PS3 and 360. The Wii and handhelds won't be affected.

The falling dollar won't hurt. Most of the components in games are manufactured in China, which has a dollar peg, and Europe is becoming a bigger market anyway.