Video game industry to celebrate merry Christmas

By Koushik Saha on 29.11.08

Filed Under: , , , ,

Is the video game industry recession proof?

At a time when retailers are struggling to sell merchandise leading up to Christmas less than one month away, video game makers have seen great success selling game consoles and video games.

Recently, October video game sales were up 18 percent -- up to $1.31 billion from $1.12 billion -- from the same time last year. Fable II led the way in October with 790,000 units sold throughout the month.

The Nintendo Wii continued its domination of the console market, with the Japanese company selling more than 13 million consoles since its launch in 2006. Microsoft has sold 12.1 million Xbox 360 units and Sony has sold just 5.1 million PlayStation 3 game consoles since launch.

Both the PS3 and Xbox 360 have had price cuts to help lure in new gamers, while the Wii is still being sold for $249. Even with its Blu-ray capabilities, the Wii and Xbox 360 are expected to be the top selling consoles -- the Xbox 360 will get a strong boost due to the recent release of the New Xbox Experience (NXE), which includes streaming Netflix.

In addition to October video game sales, the latest World of Warcraft expansion, Wrath of the Lich King, sold 2.8 million units in one day, which became the all-time one-day PC game sales leader.

Why all of the success for the video game industry?

"There are a couple of reasons," Hollywood Interactive Group director Ron Meiners told CNET. "One is the traditional value of entertainment during tough economic times. Like the great fantastic musicals in the 30s. Movies did great, because they took people's mind off of the troubles they were facing. (And) video games have great value as entertainment. The number of hours of solid entertainment that comes from a video game purchase is much greater than a movie, for example, for very comparable cost."Video games today offer gamers a level of interactivity and engagement that simply wasn't possible 10 years ago, which is important for game sales. If the economy continues to slide down hill, and Americans continue to be more careful with their money, it's likely video games and movies will be a good alternative to keep them distracted.

Although Blu-ray, HDTVs, and other consumer products have the necessary products and price cuts in place, the video game industry has the products but doesn't necessarily need to slash prices.

Nintendo introduced two limited edition Nintendo DS bundles for the holiday shopping season: Mario Red Nintendo DS and Ice Blue Nintendo DS. Japanese consumers now can get their hands on the Nintendo DSi, a next generation DS.

Sony also released its PSP 3000, a next-generation PSP aimed at competing with the newer DS game consoles.

Although other industries are expected to struggle, it's certainly a great time to be a gamer.

0 comments for this post