From what I've been reading, it's becoming very clear to the experts that the USA is entering a recession, which will last for an unknown amount of time. Read the links at the end of this post if you want to find out more.

What I am wondering is, will this affect sales of consoles and games? Many say that the gaming market is quite recession-proof, as people always spend money on entertainment. However, it doesn't seem inconceivable to think that certain things may be affected. Some examples of potential effects:

- people who want to buy GTA IV and don't have a console yet could sway to the 360 in order to save money.

- more expensive games with peripherals (for example Wii Fit) could have lower sales than expected.

- folks who lose their jobs and/or want to keep more money on their acounts could sell their used consoles and not rebuy them for a few months (or even longer). This would decrease sales of new consoles as people take advantage of deals on used consoles.

- sales of HDTVs could suffer as they're seen as luxury items, which would diminish the effect of Blu-Ray's victory for the PS3.

I'm sure you can think of many more possibilities. Do you think those (and other) things will happen due to this recession? Do you have any stories about people who are changing their gaming purchases due to the effects of the recession? Are you feeling the impact of this problem on your own skin?

Some links:

http://biz.yahoo.com/ap/080405/economy.html

http://www.hattiesburgamerican.com/apps/pbcs.dll/article?AID=/20080405/NEWS01/804050304/1002

http://en.wikipedia.org/wiki/Recession_of_2008

Assuming there is a recession, it is more likely than not that the videogame will be negatively affected in some way. However, this could be hard to measure, as the Wii is selling out and noone really has any reasonable idea how Sony and Microsoft are going to do.

The other (very remote) possibility is it does what motion pictures did during the great depression and actually increase due to peoples desire for "escapism." But to be honest, I view that as unlikely, as consoles are FAR more expensive.

All the possibilities you mentioned could happen. Although the videogame is fairly recession proof I don't see it being entirley safe. I reckon HDTV's could slow as they are luxery items which could slow blu-ray adoption and prehaps negativley affect the PS3. Games are also very epxensive no so people with lower income are likely to spend less on games. This could see games sales slow. I rekcon the industry will grow year but at a much slower pace due to this recession.

For the moment, for me,

RECESSION Theory is BULLSHIT

....

but if it happens, yes PS3 will suffer.

 ^^ I'm with him. I've looked over this stuff too (admittedly not extensively) and all I see is a slowdown from ridiculous highs back to still above average economic activity. People just have a short memory for this stuff.

People also have to remember that the definition of a recession is pretty iffy.  It is technically two consecutive quarters of GDP contraction. 

So:

HUGE rise, small drop, small drop= a recession

but

small rise, HUGE drop, small rise= not a recession.

In that scenario the second option hurt much more, but technically wasn't a recession. 

In fact, last year, people were already talking about recession in NA.
Since gaming is quite expensive and optionnal (u dont need it to live), I expected the expensive PS3 to suffer, and the whole gaming market to slowdown significatively.
But Xmas sales were insane (WiiPS360), CoD is a 8M seller (!!), and even 2008 easter egg sales were very high. The gaming market is just in very good health.
It is why I m a bit sceptical about the WW Recession ...

If there's no recession, why is the federal bank doing sudden interest rate cuts, and why is the government attempting to get people to spend more money by issuing checks to every taxpayer?

When I see financial experts saying a recession is very likely (or in some cases, that it's happening already), I see the situation as much worse than you guys are portraying it...

I have no doubt that America's economy already had an effect on gaming systems. A slow economy benefits both Wii/ Ps2 and hurts 360/ps3. PS3 came out a year later than 360 so they will be hit the hardest when money gets tight.

I was just making a general comment on the lack of specificity portrayed by the term "reccession."

As for the current situation.  Whether or not the economy goes into reccession will be touch and go.  But yes, it is very serious.  Not "dire," but a very strong slowdown for sure.