The recession has actually helped my business so I welcome it. That said, it will definitely hurt video games to whatever extent which is a bad thing for us gamers.

The entertainment industry just so happens to be one of the places of solace during an economic recession. People will want to keep themselves entertained throughout the fallout. This is what is widely called Escapism. It's a way for the consumer to not focus on an alternate world opposite from everyday life. This is why Hollywood is still making money despite pumping out half-assed movies and the videogame industry is growing with the Nintendo Wii. People tend to be spending more time together these days and gaming is also an incentive, especially now with their cinematic approach.

Isn't Activision-Blizzard, the largest third party game publisher on the planet losing money now? That doesn't sound recession-proof to me.

There is a simple solution to the problem of the sales drop off during the economic recession. Game prices should be selling brand new for $40 to $50 instead of ridiculous $60 for most games. That would generate more sales.

When you consider how much money families are spending on communications, energy, transportation, clothing and shelter the ammount of money they spend on videogames is pretty minimal. Basically, on average a PS3/XBox 360/Wii owner is buying a new game about every two months which works out to a cost of (roughly) $30 per month to play videogames (or $40 to $50 if you include hardware costs) ...

Large expenses that have a recurring cost (like cars) are the first things people will cut back on, followed closely by day-to-day "latte factor" expenses like going out for lunch at work and buying fancy coffees ... It isn't that uncommon for a family to be able to save $1,500 to $5,000 by cutting back on "latte factor" expenses, and many families can save $12,000 by owning a car for 7 years rather than 5. A family has to be struggling really badly in order to look at the $30/month they pay (on average) for new videogames as a place to save money, or to look at a $200 to $300 system as being a major expense.

Now, as you can imagine, when families cut back and start saving $500 to $2,000 per month they soon hit a point where they're less terrified about the economy and are just careful and cautious. Events like Christmas come along and for $500 you can buy a videogame system that everyone in the family can be very pleased with and get enjoyment out of.

solution: Work your BOOP butt off, get a better job, buy more videogames.

In a recession/depression, the issue isn't a "better job", it is having a job, period.  In what I am doing, no matter how hard I work, it doesn't translate into more money (looking to have a non-profit started and job hunting).  In the job market, your pay is governed by your competency (so you keep your job), your ability to negotiate, and also what the prevailing wages are.  Working your butt of is what an employer expects people to do.  It is not the path to more money, because the only place effort is rewards is in academic settings.  In real life, it is results.  Can working harder get better results?  Yes.  But working harder and being a hack won't do it.

So, what you said isn't a solution during a recession/depression.

@richardhutnik

You're right. Here in Newfoundland the unemployment rate is over 14% and my home town traditionally has an even higher unemployment rate than the provincial average. I, a college graduate with years of customer service experience, can't get a job at Wal-Mart or a grocery store. Making matters worse Abitibi which is probably the most important employer in town, is shutting down operations here. I haven't received a damn pay cheque in months and my credit card is approaching its limit!

Videogames, use Casual Flood!

Considering the breakneck pace at which the videogame market has been expanding, I have a hard time seeing a worldwide recession do anything more than slow growth. The videogame market is very large and very widespread at this point. I see no reason to expect a collapse. Worst case scenario is a minor contraction.