The recession is more of an excuse, actually... At most you can say it accelerated the industry's collapse, by tightening lending to studios of questionable profitability.

I don't understand what you are saying. How does the recession affect gaming purchases in any way detrimental to the model most company are using and losing money with?

I agree with your conclusion though. The article completely failed to make people understand what it was about.

Apparently yes.

Really???  I dont remember asking for it, nor do I remember any of my friends thinking how much better gaming would be if it was controlled by hand movement while holding a controller.   Maybe it was the bad taste left in our mouth by the Power Glove

Well, let's take into account the unemployment rate.

Let's take into account lower wages, and higher costs. It's not an excuse.

Let me break it down for both you and killergran.

The reason the industry was so high last year (2008) was because of Nintendo. Nintendo made a killing that year and brought in millions of new gamers through wii fit and similar software/hardware sales. 12 months later, a lot of those people already had wii fit and the board. There was some saturation, on top of a 50$ price cut for the holidays. The price cuts of this past year (2009) and slightly lower sales numbers are what contribute to the graph that the OP shows.

The economy contributes to lower sales, and the price cut contributes to lower revenue. You can't measure revenue as being the deciding factor if you aren't going to realize these variables. It's completely foolish. Additionally, OP blames the enthusiasts, calling the VG industry a "hit-based" industry. Hits have always made tons of money, and lots of great games have sold poorly in the past. It's always been that way.

Well maybe in your world, the market didn't want it and the Wii is in last place, and Nintendo is struggling financially.

Here in the real world, Nintendo figured out what the market wanted, gave it to them, and is raking in the profits.

Your analysis suffers from at least two fatal flaws:

1- Many publishers were already losing money before 2009. Even before 2008. Even for companies posting record revenues. Therefore, revenue is not the problem. Record revenues and record losses can only mean one thing... record expenses. It's simple subtraction.

2- The graph does not include revenue from online distribution and other things which are increasing (as many people have stated before). Therefore, revenue is certainly not as low as the graph indicates (and the graph doesn't show a big decrease in the first place). Actually revenue could even be up, given the small differences involved between 2008 and 2009.

Dude, Look around, the Economy SUCKS. Every business is hurting. The fact the gaming Industry is staying as strong as it is , is amazing in its self. Gaming is a privilage , not a must , MM2 has made over a billion . Yes the weak are dying off, just like every other business in this Fucked Economy. The Video Game Industry is not Dying , its doing its best to stay up and give us great games despite sales sucking. That is another reason people need to stop the piracy, All that stolen money could be supporting development of other games right now that they had to pull the plug on. In this Economy everything and everyone is suffering, stay strong , keep ethics and it will get better.

you mean "substracts the losses from the revenues" right ???


About the OP,

Many compagnies are posting relatively high revenues but they still suffer from big losses because of too high R&D and developpement costs

No. I mean that if we want to look at the profitability of the whole industry, we should add the profits from the profitable companies, and subtract the losses from the money-losing companies.

So for example we'd calculate Nintendo's profit + Activision's profit - Sony's loss - EA's loss etc...