Will video games surge as recession deepens?

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December 16th, 2008 Priyanka Joshi

The a284_1364.videogame.jpgtechnology industry has taken some big hits in the current economy as consumers and businesses curtail spending. But one segment of the industry sees a silver lining to the downturn: video games. Really, you’d ask.

Game companies like Sony Playstation and Microsoft Xbox are claiming surge in sales and they’re aiming to capture business from people who are staying home more and looking for escapist forms of entertainment. “We really do believe that we are less susceptible to economic woes than, say, big ticket luxury items or a lot of different industries,” said Dave Roberts, CEO of PopCap Games, maker of the popular game series Bejeweled in an interview to US dailies. Roberts, like others in the game industry, said October to December were strong months for his company, despite the nation’s accelerating financial meltdown. 

The industry has long held tight to the notion that video games are resistant to economic turmoil. And so far this year, that has held true for sales of the big consoles — Sony’s PlayStation 3, Microsoft’s Xbox 360 and Nintendo’s Wii. Atomic Moguls, a Seattle company that distributes dozens of free sports games through social networks such as Facebook and MySpace, has continued to attract new users. Between September and mid-November, it reported an increase in game downloads by 30 per cent.

As times toughen economically, will consumers continue to shell out Rs 6500 for a PS2 to Rs 10,000 for a Xbox ? Will they back off the higher-priced games in favor of budget-oriented Wii titles? Or will they fire up the PC to play free casual games online? These remain open to speculations.

While some online game companies generate revenue through individual game sales and subscriptions, many also rely to varying degrees on online advertising to support their business — with ads that appear on their websites and that run in and around the games themselves. With advertisers reining in their budgets these days, that piece of the business model could prove to be a problem.

Watch this space.

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5 Responses to “Will video games surge as recession deepens?”

  1. priyanka Says:

    Well, owning any console is not a great value for money in India but then we forget that it is also an entertainment device mostly used by youngsters…and how many parents have the heart to refuse anything to their young. As far as adults using the device, again it becomes a lifestyle equipment to show off and thus it gains its place in a household….

    Consoles are becoming a mass product anyday soon but handhelds gaming devices are well on their way and ofcourse the free games on internet will build the way for it

  2. Arjun Says:

    Hi Priyanka,
    I thought it’d be pertinent to point out owning a Wii in India, is a very expensive proposition at the moment. It’s marginally cheaper than the PS3 in India. The games are prohibitively priced as well (in line with the rest of the console games), averaging between INR 2000 - 3000.

    The budget pricing of the Wii is true only abroad.

  3. Neel Says:

    Good post, enjoyed. Cetainly we need to think on other sectors too.

  4. Priyanka Joshi Says:

    Well, the answer is negative.

    But then again, sales number of all 3 –Wii, Xbox and Playstation — have surged in the last 2 months. Don’t forget, its the cheapest gadget out there to have unadulterated fun and live out your fantasies (maybe with your kids)….i guess, its seen as a stress buster than an investment of Rs 6,000 (for PS2/PSP) and onwards

  5. PD Says:

    Good thought priyanka! A question arises in my mind that would a person play PS3 sitting home if he has lost his job due to the crises? Think about it.

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