NPD: Games 'Already Affected' by Recession

[Emabulator]

GameDaily has posted an article (http://www.gamedaily.com/articles/news/games-already-in-recession-says-npd/?biz=1) on speech given at the Game Business Law summit by the NPD Group's senior account manager, Michael Klotz. He says despite coming off a good year the video games industry is already being affected by the recession.

"Previously, people thought that games might be recession-proof," Klotz said, addressing the elephant in the room. Klotz points out those numbers were early in the year, before most people had begun to feel the effects of a recession. But later in the year, those numbers have dropped.

August had 9% growth over last year. September saw a 7% decline. October had 12% growth, and November grew by 8%. Klotz believes that those numbers should have mirrored the blistering growth experienced earlier in the year.

"We're already being affected by the recession," states Klotz. One of the good things about the video game industry, Klotz reports from consumer surveys, is that gamers have no plans to spend less on games in the future.

[beefyjr]

While almost everything will be affected by the economy to one degree or another, any industry that shows year-over-year growth, even if it's less than people hoped, isn't doing too poorly in light of how miserable retail in general is right now.

[Wyrm]

This has less of an effect on established companies and brand names, but tends to put the squeeze on new developers who may not yet have publishers for their games.

I wouldn't be too worried about the games industry tanking as a whole. People didn't stop going to the movies during the Great Depression. People won't stop buying video games if the financial system collapses a second time.

[Emabulator]

While almost everything will be affected by the economy to one degree or another, any industry that shows year-over-year growth, even if it's less than people hoped, isn't doing too poorly in light of how miserable retail in general is right now.They're certainly doing better than the industry I'm in, high end sport fishing and speed boats. I'm optimistic about a good year, at least on the repair end, due to much better fuel prices.

The video games industry will feel the pinch, but it's a reasonably priced hobby. Most people will still find the cash for their gaming habit. After all, it cost less to buy a new game than to go out to dinner or fill the fuel tank on a boat.

[hoihoi8]

It's definitely affecting companies. I've had been a part of 3 straight DS projects that were canceled to worries about the economy. It seems like there are less game jobs out there also. With that said, my company just got some contracts so I can start working again. Woo hoo

[Emabulator]

It's definitely affecting companies. I've had been a part of 3 straight DS projects that were canceled to worries about the economy. It seems like there are less game jobs out there also. With that said, my company just got some contracts so I can start working again. Woo hooGrats! Good luck on your next project. :)

[Trazzlo the Magnificant]

With Decembers NDP numbers, Nintendo managed to get another 2.15 million Wii's sold and another 3 million DS's. Microsoft sold 1.4 million 360's. Sony sold 0.7 million PS3's and 1 million PSP's.

Nintendo also took the usual string of software top 10's, MS had 3, Sony 1. Microsoft does reasonably well for third party titles, Nintendo cleaned up with 1st party titles.

So, in the recession Nintendo is raking in the dollars in hardware and software, everyone else is way behind. Most of the profits seem to be heavily directed to just one company. Someone should come up with some clever "It prints money!" picture. :p

[Papa Victor]

The only two things that are recession-proof are death and taxes.

The expectation of endless growth in this sector is just a symptom of a common delusion.

Winter is coming. And it's about damn time.

[vallor]

""We're already being affected by the recession," states Klotz. One of the good things about the video game industry, Klotz reports from consumer surveys, is that gamers have no plans to spend less on games in the future."

Am I the only person who doesn't understand what he is trying to get at? This seems contradictory.

How can the recession be hurting the game industry if the projections are that gamers are planning on spending at least as much money in the future as they did last year (which was a banner year for Game Industry revenue)?

Unless he means to say that we are already being affected by the recession *in a positive way* because people are spending more on games than they might in an otherwise stronger economy. And if that is so, why the morose tone?

On the otherhand more than a few companies have gone out of business recently or laid off staff. If we're having/had such a bang-up year, why are more companies folding now than ever before? And we aren't talking about some fly-by-night garage dev houses, we're talking about some pretty well established places.

[beefyjr]

""We're already being affected by the recession," states Klotz. One of the good things about the video game industry, Klotz reports from consumer surveys, is that gamers have no plans to spend less on games in the future."

Am I the only person who doesn't understand what he is trying to get at? This seems contradictory.

How can the recession be hurting the game industry if the projections are that gamers are planning on spending at least as much money in the future as they did last year (which was a banner year for Game Industry revenue)?

Unless he means to say that we are already being affected by the recession *in a positive way* because people are spending more on games than they might in an otherwise stronger economy. And if that is so, why the morose tone?

On the otherhand more than a few companies have gone out of business recently or laid off staff. If we're having/had such a bang-up year, why are more companies folding now than ever before? And we aren't talking about some fly-by-night garage dev houses, we're talking about some pretty well established places.

It's kind of a weird situation right now, where retail is still doing pretty well overall, but lots of developers and publishers are having problems. I think a big part of it is that the economy is bringing about a sort of financial Darwinism, where chronically mismanaged companies and brands are getting culled from the herd and companies who make mistakes are getting punished for them and, subsequently, feeling the pinch more.