Game Industry Doing Well Despite Economic Trouble

| 14 Nov 2008 06:00

Things are tough all over - unless you happen to work for the videogame industry, in which case things are actually looking pretty good right now.

Videogame sales in the U.S. increased by eight percent over the third quarter of the year, according to numbers compiled by the NPD Group, GfK Chart-Track and Enterbrain, while in the U.K. sales increased by 15 percent. Only Japan saw a decline in sales, a rather precipitous drop of 21 percent over the quarter, although analysts said that figure could be attributed at least in part to a lack of popular titles on the market, particularly when compared to 2007.

"2007 was a banner year for the Japanese software market with the titles released in the third quarter of 2008 not being as highly anticipated as those released during the same time period in 2007," said Enterbrain analyst Ricky Tanimoto. "Also, software titles generally have stronger launch sales in Japan, which represent a large percentage of the total sales in Japan compared to the US and Britain."

And despite the dismal numbers so far, Tanimoto predicted that the international financial crisis won't have a great overall impact on Japanese game sales over the holiday season. "New portable hardware systems like Sony's PSP-3000 and Nintendo's DSi will prove to be driving market forces in Japan throughout the 2008 holiday season," he said. Meanwhile, in the U.K., the game industry is anticipating a "best-ever fourth quarter performance" overall, according to GfK Business Group Director Dorian Bloch.

Recent layoffs at publishers like EA and THQ have demonstrated that the industry isn't quite as "recession-proof" as some observers had believed, but the ongoing economic uncertainty is expected to drive continued and growing demand for less expensive, at-home entertainment options, which naturally includes videogames. And while the troubles at EA and THQ are high-profile, both have their roots in issues that go far beyond the current economic crisis. Industry analyst Michael Pachter recently said that EA's poor performance in its last quarter can be attributed primarily to poor management, which he described as "projecting an appearance of smugness bordering on hostility to investors," while THQ has been bleeding money for years.

Source: Yahoo

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