Gaming in the Recession

Gametrailers.com has an interesting weekly segment called the “Bonus Round” where are panel of three gaming experts and host Geoff Keighley talk about relevant issues in the gaming industry or games themselves. The episodes are broken into three or four parts and one part is posted every Sunday. Yesterday they posted the third part of their episode dealing with how the gaming industry will change with the current economic recession. Unfortunately video games are not completely recession proof and there will be changes but just what these changes will be and how far reaching they will be will be decided by the game developers and publishers themselves.
With disposable income declining and the market in the worst slump of my (and most people’s ) lifetime gaming has become less of a priority for families (I mean food and shelter are still important right?) but that doesn’t mean that people have stopped buying games all together they have just changed their “strategy” in terms of buying games and systems. Michael Pachter made an interesting point in this episode of the bonus round, he claimed that the PS3 was being hit the hardest by the recession because of its reliance on HDTV’s and other hi-tech gadgets. The value of Blu Ray, Wi Fi, and HD gaming are only pertinent to people who use them and to get the full effect a person needs an HDTV. So not only is Sony asking for a $400 minimum purchase for the system itself but to fully use the system you need to also buy an expensive HDTV. HDTV sales have dropped as a result of the recession and to the consumer trying to decide what system to buy, this doesn’t bode well for the PS3.
Another important thing to consider is the pricing for the systems, as I have mentioned the cheapest PS3 is $400 whereas the cheapest 360 is $200 and the Wii is $250. When faced with these choices the clear leader seems to be the 360 because it is a true “next-gen” system and it is the cheapest but the popularity of the Wii has kept it going strong through the recession with Wii sales still trumping its competitors by double or more each month.
But console sales are not the only thing affected by this recession, game production itself will be hit hard. Original IP’s are the spice of the video game industry and they are what really keep it going but they are much more risky than a new installment of an established franchise. Now that less capital is flowing, game developers and publishers will be less inclined to take a chance on a new IP and they will go for the sure shot franchise. As much as Guitar Hero and Call of Duty are good games it is new games like Little Big Planet or Mirror’s Edge that keep the industry fresh. (Although Mirror’s Edge didn’t do so well commercially or critically it is a new idea that could spawn future innovation)
The creative hit that this will cause developers is of some concern as the recession seems like it will stay with us for several years, games already in their development cycle will most likely survive but down the road new games won’t even get an initial green light. The recession has also led to resurgence in the idea of eliminating hard copies of games and making it all digital. Companies like Gamestop sell games used and this hurts the publishers and developers because they don’t get a cut of the sales, especially when the games are for sale used the week of release of the game. Proposed systems like Onlive are an attempt to combat the used game market by making it impossible to trade in a copy of the game. The money for the download will stay with the publisher and developer. However this is not all good, the reliability of the system must be questioned (like all new tech) and the quality of the gameplay itself (frame rate and the like) needs to be looked at thoroughly. On top of that if the hard copies of games disappear from store shelves this will mean that consumers who don’t have access to the internet (this is still a large segment of the populace) will have virtually no way of getting new games and in the end that just hurts the consumer.
The recession hasn’t hit the gaming industry very hard yet but it will over the coming years and more so in a stifling of creative properties. However that doesn’t mean that the industry will die out or even become completely unoriginal, we will still be treated to new IP’s just is smaller numbers, and with companies being more careful to put out only titles that are ensured to do well maybe the overall quality of games will increase. Who knows maybe we will come out of this recession better off than we were before it, in terms of games anyway.