Tag Archives | Recession

Games Industry Suffers From Recession, Finally

fightnight4After a few months of lagging sales, market researcher NPD Group is finally saying the recession caught up with the video games industry. All it took was for gaming to suffer its biggest year-over-year sales drop in 9 years.

Total industry sales in North America were down 31 percent in June, compared to the same month in 2008.  Hardware took the biggest hit, with a 38 percent drop in sales, and software fell 29 percent. Accessories fared the best, but still saw a 22 percent decline, according to GameDaily.

June is not the first recent month that the industry was in decline. Video game sales have fallen year-over-year for the last three months in a row. Still, NPD avoided chalking this up to the recession. After all, last year was particularly strong, with the fast-selling Wii Fit and blockbuster games such as Mario Kart Wii and Grand Theft Auto IV doing well in the spring. Plus, the three current generation consoles were fresher a year ago, and no company has cut prices since then.

But now, NPD analyst Anita Frazier is finally blaming the economy. “This is one of the first months where I think the impact of the economy is clearly reflected in the sales numbers,” she told GameDaily. Sales haven’t plummeted this drastically since September 2000, when there was a 41 percent industry decline.

Why pull the recession card now? To paraphrase Frazier, it’s a combination of weak line-ups, stagnant console price points and a lack of must-have games, combined with consumers’ unwillingness to spend more until things change. In other words, you can’t expect people to pay the same money for lacklustre products just because they’re video games. To put it one more way, the video game industry is not recession proof; it was just piggybacking on the strength of the Wii and a few blockbusters, so let’s please let that label die once and for all.

Frazier isn’t throwing all her optimism out the window. There’s a chance, she said, that a strong second-half could bring total 2009 game sales on par or slightly above last year’s numbers. Game makers aren’t fully cooperating, though, as Take-Two delayed the much-anticipated Bioshock 2 in hopes of reaping better sales during FY2010. Heavy Rain, a Playstation 3 exclusive that’s getting some attention, was also put off until next year.

To save 2009, the games industry needs Wii Fit Plus to spur more sales of the Wii Balance Board, it needs Call of Duty: Modern Warfare 2 and Halo 3: ODST to sell like true holiday blockbusters, and it needs people to splurge on high-cost peripherals such as the band kit for The Beatles: Rock Band.

Holiday price cuts for the three major consoles couldn’t hurt, either.


Economic Meltdown Fringe Benefit: Cheap Apple Products?

povertysuxIn normal times, big discounts on Apple products aren’t exactly commonplace. But there’s a plethora of rumors today about markdowns on Apple gear this holiday shopping season, as evidenced by big box stores like Best Buy supposedly getting ready to slash Mac prices and Apple allegedly being willing to match anyone’s price at its retail stores.

So, I dialed up a friend who is a manager at a big Apple reseller. Resellers like my pal are able to sell Apple products for whatever price they’d like, but there is a set advertised price which (why you have to put Apple products into your Amazon shopping cart to see the price). Apple is, however, permitting rebates for its surplus last-generation products.

Best Buy may be either trying to recoup inventory costs, or it has reached a special agreement with Apple. My Apple-peddling pal tells me that he is unaware of the company making any exclusive deals with resellers.

I’m led to believe that the former scenario is true. Best Buy likely has an excess of inventory due to the economy, and it is better off with thinner profit margins than assets sitting in warehouses. If the reports are accurate, Apple would not want not want its stores to be a less attractive option for prospective buyers.

We are all feeling the recession blues, and nothing spells recession like Apple having a sale. I’m reminded of the Michael O’Harro poster that was on the wall behind the wet bar in my parents’ house when I was young, “Poverty sucks.” But there are some great deals right now, aren’t there?