In the midst of this economic downturn, many industries have taken huge hits to their bottom lines forcing them to cut jobs and batten down the hatches for the rough times ahead. One industry that seemed to dodge the doom and gloom of the weakening economy was the gaming industry.
Third quarter sales were promising, performing better than last year thanks to Microsoft and Sony announcing price drops on their respective consoles and the release of triple-A titles such as Metal Gear Solid 4. Analysts and bloggers agreed – the gaming industry was a recession-proof juggernaut that showed no signs of stopping. Kotaku.com even declared the Xbox 360 as the “official console of 2008 recession.”
Everyone seemed to bank on the theory that people would cut out of home entertainment such as movies and eating out before they would slash their gaming budgets. I was no different, blogging about my guilty pleasure spending in regards to gaming and gadgets.
Fast-forward to today, and the breaking news that gaming monolith Electronic Arts has posted a $310 million loss and will be laying off at least six percent of its workforce in response. A week prior, Joystiq.com posted a blurb announcing Sony’s move to slash its earning forecast by 38% in light of an uncertain financial market.
So where does this leave the gaming industry? With the holidays around the corner and each console offering a big name title, gamers will definitely be squirreling away their pennies to get their fix. Parents will definitely be out en masse to get the kiddies that one big-ticket gift, but there will be cut backs. Consumers might cut their gaming budget to one or two games, or maybe purchase peripherals at a later date. One thing is certain, there is no such thing as a recession-proof industry.