Comments on: Is the video game industry recession-proof?

With strong sales numbers in recent weeks, and a perceived truism that people want inexpensive entertainment in tough times, some think video games could stay strong.

[zincmann]

Buy Games USED! Dont pay the inflated prices that retailers are charging you, much can be had even for brand new titles if you look around online and do your shopping if you can wait a month or so when the title has worn off a little you will get a bargain!

[Hunnter2k3]

You are the cancer of the gaming industry.
No, really, you are.

Second hand games are killing it, regardless of what (blind) people say.
None of the money goes back to any of the developers, publishers, etc.

And the proof has already happened, and continues to happen each year as games studios go out of business / are bought out.

Just as i said elsewhere awhile back, imagine if Midway just died.
WOOP, look whats happening to Midway just now... almost as if i cursed them, but i didn't, because i always buy direct.

[aztec92154]

I would buy direct if I could buy online (like the Steam games). 5 copies of "left 4 dead" for $150 USD! What a deal

[HNoodleB]

No, zincmann is a consumer with a fully functional brain. Public libraries don't seem to have killed the book publishing business. If game developers have an obsolete business model, they get to evolve or die, just like everybody else.

[drone108]

Hunnter2k3, get off your high horse. You sound like Garth Brooks when he was crying about used CD sales, because he didn't get a cut. Did CD's die because of the used market? Hardly.

[faloutboi]

>Hunnter2k3

The concept of owning property must escape you.

Beside this was the argument with Video Rentals and Hollywood is still there.

[PreTenD7979]

I do have to agree with hunnter2k3 here, at least for part of it, I dislike buying used games because the quality does indeed go down with play, discs are only so strong, and I've played more than a few til' the holes are burnt through them.

[sting7k]

Wow, I didn't know all those gaming company stock prices were taking such big hits as well. I still see games flying off shelves and them racking in huge numbers. Guess I need to go scoop up some cheap game stocks.

[Penguinisto]

@sting7k: ALL stocks are taking illogical hits right now. It makes no sense lately... but yeah, finding strong, profitable companies and snapping up their stocks would be a good idea right about now.

@zinvmann: exactly. I'm in no hurry to get jacked for first-run retail prices either.

/P

[Wookiee-1138]

I remember the first half of the '80s.

Nothing is recession proof.

[phdecora]

Mr Terdiman,

I am writing to beg you to include some history in articles like this.

For example, why not mention that Nintendo was successful largely because its American competitors died in the video game industry crash of 1983?

The title of this article is kind of nuts, it would be like finding an article written in 2030 wth the title 'Are car companies recession proof?', as if the author didn't remember that GM, Ford, and Chrysler almost all went bankrupt in 2008.

But I can't just rip on the author, I have to also rip on the 'anaylsts' and 'industry experts' that he talked to for the article. A journalist might not know or care about the history of every industry, but the supposed experts of the industry should know and care about the history of their own industry, otherwise, on what basis can they call themselves experts?

[smwave]

Market analyists are short-term thinkers by nature. Same goes for industry experts. As long as they are making money on the stock they will make the picture as rosey or black as they need to. Time is the great balancer of the markets. History shows that as long as your company is providing a valuable service to the industry it will thrive. Once that company thinks it's got too big to fail it already has. VG developers are not immune to this, and if they start thinking they are they will fall on their own swords.

[LastExodus]

The article has nothing to do with that. It wasn't a recession or depression that caused the video game market crash of 1983. Your car analogy has no bearing here, what-so-ever. in what way can you correlate car sales and video game sales? You can't. Cars aren't entertainment, and they never do well in recessions. Entertainment, however, does. video games did well in the recession in the late 80's before stock market crash, and they're doing well now.
From a recession standpoint, they do just fine. It's not like we've hit a depression or anything...not yet.

[Methuss]

Seriously, anyone who thinks the gaming industry is recession proof is daydreaming. My brother worked in the industry for a decade. Here's what he wrote to me:

"Projects are being canceled and studios are closing left and right. Gearbox just shut down the Aliens: Colonial Marines project and laid off a bunch of people. Some of them friends. MMO Tabula Rasa is shutting down after only a year of operation. A new report is claiming that 96% of some 6000 games studied were considered a financial failure. That's not counting the 75% or so that never ship. EGM, one of the longest running gaming publications has been shut down. Midway, one of the oldest gaming companies is getting its stock de-listed from the market. That?s just this past Friday. "

Let's face it. When people are looking in their wallets and choosing McDonalds for their family night out for the week instead of TGI Fridays, they aren't going to be spending $50 on a video game. That's the reality...and it is approaching.

[LastExodus]

People always spend money on entertainment. That's how it's always been, that's how it'll always be. The gaming industry IS recession proof. It's been proven already, and it's standing quite well even right now. Don't confuse "recession" with "Depression" they're quite different.

As it were, Aliens: Colonial Marines hasn't been shut down, Tabula Rasa is just peachy (since i'm STILL playing it, apparently it hasn't shut down, with no signs that it's going to), and EGM hasn't gone anywhere.
Don't spew your blatantly false information around.

I do however agree with you on your analogy. The time when we stop tossing money for games is certainly fast approaching, but then so is the next step after a recession if it doesn't get fixed. (Editors' note: Personal attack removed.)

[knowles2]

Stocks are being illogical right now.

As for gaming industry being recession proof, nothing is. It is however relatively harden against recession because it still a rapidly expanding markets, with new customers coming and wanting their products.

The only gaming companies are failing are the small studios, they are failing because they failed to follow good management. EA is loosing because they keep making crap decisions, they had a hit on with spore, and then they loaded it full DRM which drove the customers away, I know far more people who downloaded it free rather than buy it because of DRM. EA has also invested far to much in getting exclusivity for their sports games instead of developing new games and products.

Why companies Blizzard and others who continue to produce games that continue to sale because they have built innovative brands over the nears.

But if I have my money the game industry big boys will come out stronger. The small studios will either innovate by focusing on the new social gaming arena or producing smaller games for download those who fail to plan did not developed profitable ip in the good time will cease to excist. It the harsh realities of truly free market unlike banking or the car industry which both have been poorly run and manage over the years and yet still get saved.

[NWLB]

Indeed, the great shake-out of the 82-84 range was, to use the modern term, Epic. No company or game system was immune. But then, as now, you have companies putting out horrible products and wondering why they fail. In the 1980s you had E.T. today you Age of Conan.

[kimioko]

Ah yes, I was one of those people at Gearbox. Loosing your job is one of the hardest things to go through. Especially when you love you job.

[ice82]

Just like any other companies, video game companies will be subject to the hit.
IMO, buying used games is fine since most people who sell those games that they're bored with would go back to a retail store and buy other brand new games with that money. That's what I do.

Companies go down all the time, it's not because of the consumers, but mostly because those companies aren't doing a good enough job at what they do.

Look at the car industry, used car industry has been around forever and it doesn't mean car companies go down because of that. Car companies go down because they don't make their cars good enough for enough consumers to buy them.

[Lerianis]

And that is what is starting to happen in the game industry. Game industry people are beginning (slowly, PAINFULLY) to realize that American game players are 'more picky' than usual today. Heck, unless a game is FREE, I expect to get AT LEAST 60 hours of gameplay out of it, unless it is an extremely simple, Wall-E-esque game.

[myles taylor]

Regardless of how thick your skin is, you will eventually fall if you keep getting stabbed. Certain industries do better than others during a recession, but unless things turn around, that will change.

Who's stock HASN'T dropped?

[megustansalchichas]

sales of used prouducts don't 'kill' an industry -it's called the marketplace: if you're done with your copy of Gears of War 2 there is likely a person who will purchase it from you but WON'T purchase it new until the price comes down. their purchase/gameplay increases product awareness and makes them more likely to purchase add ons and other stuff related to the license. Episodic, downloadable content at lower price points is the way to go to keep the money coming in during hard times, and you're seeing it now with games like Portal being released on Xbox live arcade even though they're already available on disc and through Steam's own service.

[watch2dog]

Bridges explained, he thinks that the dominance of giant publishers like EA and their general reliance on physical, in-the-box, units, can't hold up
-----Anyone can tell me what is the meaning of "physical, in-the-box, units"? Thanks

[Snakehead_Games]

Yes, it means the ones that are sold in store in a box. This is in contrast to software downloads that go directly to your desktop. Basically it's the old way of distributing games.

[loose_screw]

No industry is recession proof.

[Snakehead_Games]

As a partner in one of those small video game houses, I can tell you the market is better than ever. As many writers above have commented, if you provide a product that people want, then you'll do fine. The only real issue I see is that reliance upon VC or loan financing could make any company unstable right now; gaming is no exception. Plus, those tied to consoles have their own set of issues.

As for the first commenter, I simply can't understand why you wouldn't look at buying things second hand if you can. Nothing immoral about that; in fact it's great for everyone involved.

[the_iceman]

I either buy used or wait until they hit 15-20$ new....60$ is too much for a game, sorry, it is.

[findconsolegames]

I really hope so. I was in an Electrical Store today (UK - Birmingham) and this large PLC is out of PS3's and they believe this it will be a week until they get them again.

£300 for a PS3, people are abviously still buying.

<a href="http://www.findconsolegames.com" title="Buy New and Used Video Games">Buy New And Used Video Games here</a>

[ferretboy88]

Of course it is. People were lined up at all the stores on black friday. 2% increase in the economy is still better than 90% of countries. Every country is hurting right now a bit. This will pass like it did the last 100 times it happened.