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Credit crunch: Analyst opinion, part one

Ed Barton
Screen Digest
June 27, 2008

Recent history tells us that video games are more resilient than other categories of consumer spending.

In the UK this resilience was demonstrated during the last severe recession in the early 90’s and also at the beginning of this century.

Why is the industry so much more resilient than others, particularly when compared with other entertainment spending categories? During recessions people tighten belts and go out less. Video games offer excellent value entertainment: one does not have to leave the house and a game typically costs less than going out for dinner, for even couples and the smallest of families.

In addition hardcore gamers do not tend to have mortgages or significant food and utilities bills (some of their parents might, but the 16 to 25 age group will always find the cash for gaming).

Furthermore core gamers stay gamers and will not turn to alternative, cheaper forms of entertainment.

For this category, buying the latest version of Metal Gear Solid or Grand Theft Auto is not a discretionary purchase: it is a mandatory purchase and will not be delayed until the price drops or they have more money to spend or substituted for a cheaper game or even an alternative form of entertainment.

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