VideoGameAccountant said:
ConservagameR said:
Not so sure about that. Maybe, but 2008 wasn't anticipated by most and was quite abrupt, where as things have been weakening for some time now and many have been keeping an eye on it for some time. That's not to say there won't be a crash and it won't be bad, but we're far more aware of the situation this time around so we can much better maneuver. How much that softens the blow is hard to say. There was a general narrative that we were going to see another crash around 2020, but with covid, we may have potentially avoided a hard crash, and instead are riding it out slowly over years. Though it's also possible we've been maneuvering around it for years now and it's going to hit at some point no matter what.
If we do get a crash as I said, then sales will slow a bit. Yet people will still want something to do and gaming is cheap and can be repetitive in a good way, and even cheaper for PS5 come this fall hopefully, so I don't see sales hurting too much even with a crash. Unless the crash is somehow terribly devastating across the board, which at that point all products and markets are in massive trouble.
I'd say right now it looks more like a long slow drawn out recession. That's something that will hold back PS5 sales a bit, but won't cause them to falter much for the next couple years.
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Im not sure you can say we saw it coming. Jerome Powell was saying inflation was transient for a year before he realized he needed to raise rates to fight inflation. This is usually want happens in any bust cycle. Rates go up, credit gets more expensive, but the economy needs credit and so you have a contraction, people lose their jobs, bills get hard to pay, defaults happen, banks lose money, meaning less credit and then it cascades from there. The issue now verses 2008 is the issue was primarily isolated to home mortgages back then. Now it's moved into everywhere else, which is why its often termed the "everything bubble." Cars, again, are a good one to look at because the value of cars should always be declining. Instead, they went up, and now we will have an auto loan crash. As for 2020, there is a theory (if you believe it) that a big reason for the lockdowns were the markets were going to crash. In 2019, the Fed injected 50 billion into the Repo market and no one knows why. The crash may have meant to come sooner but COVID pushed it back. The result is more money in the economy than there should be, and its got to come out.
As for the systems, the issue is going to be that a PS5 wont be an attractive purchase. If people have less money, they don't want a $500 console. PS4s are much cheaper now and everything is coming out on the PS4 anyway, so stick with that. There is also the cheaper Switch. This is if they buy games at all, which will be curbed in a recession. The issue for the PS5 is its already tracking below the PS4, so a recession could pop any momentum it has left, leaving it dead in the water. Not that it will have 0 sales, but the next year could be bad and its sales trend could be closer to the Wii's trajectory. We'll know more by the summer.
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The fed also has to deal with the government and get's a lot of pressure put on them. I remember reading about how much Trump was always on their case. Just because the fed waited doesn't mean a whole lot. It can be an indicator, but the fed tends to wait things out and react vs get ahead of what moves they think they may need to make. I don't believe anything necessarily, but at this point little surprises me when it comes to what's really going on behind the scenes.
In terms of what things look like, if the rumors are to be believed, Sony having the new PS5 (Slim) being manufactured by April and out by September suggests to me that Sony just may see a recession coming and sooner than later. Sony usually launches during the holidays. Typically November. While they are a little behind and would want to catch up, if the console is also as rumored, a digital only model with an optional disc drive accessory, this also says to me that they are going the extra mile to get the price down for consumers. Add to that how cheap an online sub can be for all the gaming you get, and I can't help but wonder if Sony is prepared for what they see coming. It would also explain the rumors of little to no Pro talk and mostly PS6 talk in terms of future hardware. There's no point in a Pro if we get a year or two recession, or worse a crash.
Now I'd also assume if Sony saw a crash coming, they'd make a new PS5 (Slim) and have it ready asap, but also make an XB Series S competitor. A $349 PS5 would be a tougher sell during a crash, though a $249 Series S competitor would be much easier along with a sub to add to that. Now if it's just a slower drawn out recession, a $349-$399 PS5 will still sell well. You'll just likely see a continuation of less game sales yet higher Plus subs instead.
PS4's are not much cheaper new and have limited stock, but obviously they are if used. If most people kept their PS4, then anyone else looking to get into gaming would pretty much have to buy new, so mostly PS5 then. I could see gamers keeping their PS4's with a $500 PS5, but at $349-$399, plenty will trade up to the new model. Cross gen games are about over, at least for first party. Some third party will be going present gen only. Switch supposedly isn't getting price cuts, so the new PS5 won't look that expensive in comparison. I would agree game sales per unit probably wouldn't get any better but more Plus subs instead would make up for that a bit. We haven't heard a peep about a new Series X, but have heard whispers about a slightly upgraded Series S remaining at $299. This wouldn't be good for MS in a recession because X would be dead in the water and S would have more competition with a $349-$399 PS5.
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