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

Avinash_Tyagi on 19 January 2008
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



 

Predictions:Sales of Wii Fit will surpass the combined sales of the Grand Theft Auto franchiseLifetime sales of Wii will surpass the combined sales of the entire Playstation family of consoles by 12/31/2015 Wii hardware sales will surpass the total hardware sales of the PS2 by 12/31/2010 Wii will have 50% marketshare or more by the end of 2008 (I was wrong!!  It was a little over 48% only)Wii will surpass 45 Million in lifetime sales by the end of 2008 (I was wrong!!  Nintendo Financials showed it fell slightly short of 45 million shipped by end of 2008)Wii will surpass 80 Million in lifetime sales by the end of 2009 (I was wrong!! Wii didn't even get to 70 Million)

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insomniac17 on 19 January 2008
Kasz216 said:

I think sales will go up.

Entertainment usually does well in times of economic crisis because people want to forget the crap that's happening.

Maybe more Wii games get bought by "the casuals" something they can play for a while instead of spending a similar amount on like 2-3 movies... etc.

MAYBE the HD systems will take a hit due to the relative cost of their product... but even then... those who already have the systems will probably end up buying MORE games.

If it looks like it will be prolongued, maybe the Wii will get some more titles, since as stated it will be harder to raise capital. As will DS.


 provided Nintendo has finally caught up with demand. and if that happens, they might see another hardware shortage lol. 

tokilamockingbrd said:
during the great depression the only industries that thrived were the Radio and Movie industry... People will always have money for entertainment in the US. Especially videogames, which imo give you the most bang for your buck. I actually think the Wii will thrive, it is the cheapest to make games for so the devs will focus their efforts on the Wii.

But recession or no, media will be fine. Housing, Retail, and Finance industries will be hit hardest. (housing may very well have caused this recession.. but gas seems to be taking the blame.)

 blame the idiots running my county. last time I checked, my county had the highest rate of forclosures (spelling?) in the nation. they bought out all this farmland (idiots) and built way more houses than we needed, even with all the illegal immigrants coming here... anyway, I'm getting off topic;

I imagine that Nintendo would do the best if the recession lasts, b/c like everyone had said, its cheap price + lots of fun = great entertainment for the family. 

 



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tokilamockingbrd on 19 January 2008
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.



psn- tokila

add me, the more the merrier.

Avinash_Tyagi on 19 January 2008

Ah but this one has a looming real problem, low savings, and high debt, both public and private, Rising prices and less money. This particular recession is only the vanguard for a much bigger problem which is looming on the horizon.



 

Predictions:Sales of Wii Fit will surpass the combined sales of the Grand Theft Auto franchiseLifetime sales of Wii will surpass the combined sales of the entire Playstation family of consoles by 12/31/2015 Wii hardware sales will surpass the total hardware sales of the PS2 by 12/31/2010 Wii will have 50% marketshare or more by the end of 2008 (I was wrong!!  It was a little over 48% only)Wii will surpass 45 Million in lifetime sales by the end of 2008 (I was wrong!!  Nintendo Financials showed it fell slightly short of 45 million shipped by end of 2008)Wii will surpass 80 Million in lifetime sales by the end of 2009 (I was wrong!! Wii didn't even get to 70 Million)

Naraku_Diabolos on 19 January 2008

Speaking of housing, you should see how stupid the housing industries are where I live. They've torn down A LOT of forests just to build houses and neighborhood. Funny thing is, hardly anyone is living in or near them. There's this one bit of forest outside my neighborhood's entrace, and they DESTROYED it just to build houses. And when I mean forest, I mean an untouched and healthy piece of land. What's worse is that we have deer, foxes, skunks, badgers, and most importantly, chipmunks that lived there. Why the hell am I mentioning chipmunks? Our neighborhood has an infestation of them, especially around my house since it's close to the woods that were destroyed. Damn little critters are destroying my garden, flowers and a southern, Japanese magnolia tree I bought and tended too. Now we have all these freaking holes around our house, and they dug a nest right near the surface and root system of that tree I'm trying to grow. I got my revenge in the fall when I stuck a water hose down the hole lol

But seriously, why the hell does my area need houses? If they build more houses, they will HAVE to build more schools. When I went to public school, it was so crowded you would get trampled over, especially the west side of my county where they have nearly 7,000 kids in one high school. And they also destroy forests just to build some damn strip malls.

I may be no Captain Planet, but I will f*cking kill them for what they did to the environment where I live.

"Protect the environment, or I'll f*cking kill you! CAPTAIN PLANET!!"



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HappySqurriel on 20 January 2008
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.

Alan Greenspan didn't prevent any recessions, he just postponed them ...

Alan Greenspan's moronic move to lower the interest rate to 1% (effectively creating a negative real interest rate and giving money away for free) created the housing bubble; this housing bubble gave consumers a false sense of wealth and they used their "equity" to borrow large sums of money and increase their purchasing power at a rate faster than the ecconomy as a whole was growing.

The combination of inexpensive money and the housing bubble encouraged "banks" to create new lending products which targeted people who could no longer afford houses (because of the bubble) which had questionable terms; the banks then repackaged these sub-prime loans, and lenders assumed that the mortgages were safe because they were backed by the value of the house.

As house prices began to fall the entire house of cards crumbled ...

 

My Econ 201 prof summed it up best: You can NOT fix ecconomic problems with monetary policy!