Although I
do not believe that the video game market is “recession proof”, I do believe
that the recession has a big impact on the targeted demographic that video
games depend on to drive their sales which indirectly affects the video game
market.
“A combination of
console price cuts, a holiday rich in spending and the recent release of
several chart-busting titles helped the game industry pull in $5.53 billion in
December alone, according to the NPD Group. “(http://kotaku.com/5449233/video-games-survive-recession-but-at-what-cost)
Although
video game sales had been down since the beginning of 2009, the sales
skyrocketed towards the holiday season. Why is that? A slight rise is expected
because of gifting during the holidays, but these companies also realized that
the targeted demographic were not able to afford their products and so they
slashed prices in order to make a budget.
“Games cost too much:
The popularity of used videogames simply indicates that players are seeking to
mitigate those costs from both ends, by buying low-cost used games and/or
selling games back for store credit.” (
Another way of
looking at things, however, is to say that spending on gaming is driven by big
hits, and that the slight decline in 2009 reflects creative rather than
economic weakness. (http://www.economist.com/node/15773828)
The last
two quotes show that the gaming industry is also heavily affected by the
creative (or uncreative) content that it produces and what people are willing
to pay for it. The big hits will always attract a crowd of people willing to
pay full price for it on the day of its’ release, but the fact is the value of
the games differs from person to person. And thanks to the existence of stores
like GameStop that sell used games, there will always be a dip in the profits
of the game producers as they see no income from the re-sales.
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