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Forums - Sales - The Recession VS. Videogames - Your Thoughts?

@richardhutnik -

Way to ignore the two most important parts of the post. (1) The working hard enough to SURPASS economic issues, and (2) sarcasm.



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It's entertainment//and I strongly believe its recession proof if you are careful targeting the right market. Everyone will turn to entertainment when the market isn't looking good//we need entertainment to keep ourselves going//I for one am going crazy buying used games at Gamestop//stocking up my collection and stuff//I mean a couple of days at Best Buy the other day. The whole Blu-ray aisle was flooded with consumers and this is Blur-ray discs//these movies generally sell around $30 a pop.



There are "recession proof" (counter-cyclical) industries.

For example, since people cannot afford to buy new cars, they instead try to keep their existing cars running. So auto parts and repair often does even better when the economy is bad.

Entertainment is often held up as being something that can do better in tough times because of the ability to escape reality. The movie industry had many hits in the US during the 1930s.

This is especially thought to be true for video games. The reason for this line of thought is that you get something that lasts. A movie might provide 90-120 minutes of entertainment whereas a video game lasts 10-15-more hours. Plus, many games can be used by more than one person, increasing their value.

However, price creep ($60 game) and shorter games (less than 10 hours) have decreased this value. A 10-hour game that's costs $60 has the same $/hour cost as a 90-minute movie with a $9 ticket ($6/hour). Plus costs associated with on-line play, additional content, micro-transactions, etc. can add up.

What will probably happen is:

1. Existing "AAA" IPs will continue to do well ... but their sales numbers may decrease. This may be especially true where the new release is more content oriented than game-play oriented (e.g., single band version music games, annual sports editions, etc.).

2. New IPs (or revamped IPs) -- "AAA" and "AA" -- will have trouble, however. People are going to be hesitant to invest monies in something they know little (or nothing) about.

3. Renting and bargain-priced games should do better. People will want to play a game some but ensure that they are not stuck with it (or that greater value than a Gamestop trade-in after they have finished playing it). And people will want to limit their investment, so they will be more likely to buy an unheard of low-priced game or a reduced price greatest hits game than a full-priced new game.

4. Game companies that don't adjust will have problems. Planning for this generation like it is 2006 won't cut it in 2009. The old assumptions were wrong and the old economic conditions are gone. What this means is more sequels and spin-offs, more multiplatform games, and lower prices (SE may this right with its approach to FF13, FF13v, and FFCCBB($40)).

Mike from Morganatown



      


I am Mario.


I like to jump around, and would lead a fairly serene and aimless existence if it weren't for my friends always getting into trouble. I love to help out, even when it puts me at risk. I seem to make friends with people who just can't stay out of trouble.

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NNID: Mike_INTV

thetonestarr said:

@richardhutnik -

Way to ignore the two most important parts of the post. (1) The working hard enough to SURPASS economic issues, and (2) sarcasm.

The later undermines the former, so not sure what to say here.  If it was sarcasm, it would need more text to give context to help with the detection.  What I had seen on forums like that is people who are NOT sarcastic, actually posting stuff like that.

 



HappySqurriel said:

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.

 

 Exactly.

People get scared and unsecure so they cut on the big, risky expenses but that gives them more money available to spend on small expenses.

 

EDIT: Is this correct grammar BTW - is it rite to say "to spend on expenses"?



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Slimebeast said:

 Exactly.

People get scared and unsecure so they cut on the big, risky expenses but that gives them more money available to spend on small expenses.

 

EDIT: Is this correct grammar BTW - is it rite to say "to spend on expenses"?

 

I'm not a professional grammar Nazi, but I think the common root word makes it redundant, if not technically grammitically incorrect. I'd say the bigger grammatical error is that you should have made two sentences. I would have written it like this:

"People get scared and insecure so they cut on the big, risky expenses. That gives them more money available for small expenses."



"The worst part about these reviews is they are [subjective]--and their scores often depend on how drunk you got the media at a Street Fighter event."  — Mona Hamilton, Capcom Senior VP of Marketing
*Image indefinitely borrowed from BrainBoxLtd without his consent.

Thanks famousringo.

Damn, I'll never get it rite.



Honestly, video games aren't even close to recession-proof.

Sure, sales are up, but that's mainly due to Nintendo expanding the market and what not.

Looking at all the layoffs with game companies, it's pretty obvious that video games, like basically everything else, are affected by the economy.



# of games above 75 on Metacritic (including downloadable):

360: 241     DS: 144

PS3: 152     PSP: 126

Wii: 85

The only system that really isn't recession proof is the PS3. The PS3 at its price now would actually be selling more if there was no recession in the states.



S.T.A.G.E. said:
The only system that really isn't recession proof is the PS3. The PS3 at its price now would actually be selling more if there was no recession in the states.

Oh so the recession is a excuse now that the PS3 is selling awful in America//gosh what's next//lol