Video Armageddon: The Follow-Up
As promised, let’s tackle some reader comments in response to last week’s Perspective:
Jason commented on the trend towards downloadable games and wondered if it had something to do with the economic crisis. I think that this may be possible, but I also believe that there are other factors at work here. Digital distribution means more profit for publishers; there’s less overhead for disc-minting, packaging, and so on. It also eliminates any used game sales that can eat into overall revenue. These factors can lead to lower price points, which means that more people can buy and play these games; the inevitable problem, however, will be storage space. Nintendo is encountering this already, and Sony (and mandatory installs for a number of PS3 disc-based titles) isn’t too far behind here. Not everyone knows how to upgrade a PS3 hard drive on their own.
Jiggy talked about the ignorance of the gaming community regarding the poor economy. I think it’s important to remember that the average age of gamers has steadily risen as time has gone on and has most recently been pegged at 35. At that age, it’s almost impossible not to notice the effect that a struggling economy has on disposable income. Perhaps younger segments of the gaming community may not feel these effects or may not seem to have a stake in diminished 401K values or sharp stock market drops, but as unemployment rises, money will become tighter for everyone… young and old alike.
The last point that I want to make in regards to this topic is that the sales numbers for this quarter could be an important indicator for how well gaming will be able to hold up in these tough economic times. Watch for the trends in sales of the three current-gen consoles, both on a month-to-month basis and as compared to last year. The PS3 and Xbox 360 have some stellar games in the offing for this quarter, and the Wii is still the Wii. If sales stagnate or increase slightly, it could be a harbinger of things to come; however, if sales rise markedly despite these negative economic developments, it’s possible that the industry will be able to weather the storm.
September NPD numbers are about a week away… that’ll be our first taste.
I’ll catch you next time, for another Perspective…
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