I said my own opinion, I think it affects this situation only in epic games.
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Video game sales set to fall for first time in years as industry braces for recession
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Armenius
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There's a lot of multiplayer games that came out recently. Besides DiabloImmortal you have Genshin Impact, New World, and Lost Ark. Oh and OverWatch 2 came out but it's just OverWatch 1 with a bigger number. I count Diablo Immortal because it's also on PC.
We are reading that maybe the video game industry isn't doing so hot. I look at Elden Ring as the game of the year and it pissed off so many game developers. Going so far as to mock it's graphics, it's UI, and difficulty. Yet the game was praised and sold like gangbusters. I think the game industry looked at Elden Ring and got pissed that a good game actually made good money. Not just that but a good single player game.
EA made it clear that they aren't doing single player and mock those who look forward to them.
Your perception is skewed. Multiplayer releases have never outnumbered single player releases in the entire history of home video gaming. You listed 4 games out of the hundreds that came out this year.
you figure a game developer is probably office-based, no? If so, Covid probably screwed it up like it did the movie industry. Hard to imagine everyone working from home and effectively collaborating, but what do I know.
My Roblox stock has almost doubled in the last couple months, so maybe this is old news?
It also greatly improved the work/life balance for developers. No managers keeping them at the office 12-16 hours pounding out increasingly unreadable code.
Markus Guitarus
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I just came from a discussion at a music gear forum where sellers were complaining about the growing difficulty they're having finding buyers for their gear. Like this thread, for some reason many try to blame it on anything but the state of the economy. Between inflation and a looming recession, people are cutting way back on their luxury purchases. People's paychecks are going to food, rent, and gasoline, not guitars and video games.
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Zarathustra[H]
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Certainly, inflation has been hard on almost everyone. Some of us have had commensurate pay raises, and I can't speak for everyone, but mine didn't quite keep up.
At least inflation has made my mortgage payment comparatively smaller
That said video games are not cars, or even guitars. At most you are paying - what - $59.99? As long as you already have a servicable computer to run the game, that is a lot cheaper than many other ways to pass the time. You might have more people wait for the Steam sales though, or opt for Free 2 Play games.
If you exclude the cost of the hardware, video games have one of the lowests costs per hour of entertainment out there. It is not unrealistic to think that videogames may even benefit from recession tendencies, as people shift away from their more expensive passtimes, but still need something to do.
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The news is around looming recession, the decline relative to 2020-2021 that were abnormal year for gaming popularity and new privacy laws hurting mobile gaming revenues, it seems up-to-date.
Not interested. I've never played anything in the series. I hear good things about those games but I've never seen the appeal.
Quite right. The last console I bought was an OG XBOX One. I never got any of the updated versions of it and I only ever played Mortal Kombat 11 on it and Halo 5. I never finished the latter, though I played the crap out of the former. I eventually bought MK11 on PC and put a lot of time in it there. My XBOX One was last used to watch the Mandalorian Season 1 on Disney Plus as my Smart TV is getting older and the app for that wasn't available for it.
GoldenTiger
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Yep. For most people right now, $1k GPU's and even $500 consoles with $60-70 new games are off the menu with the incoming depression.
Total war buoys the economy some, I wouldn't hold out for the lack of that before a proper depression. I do hope the offline gaming improves a little before that though.
Hardware is a tough spot for PC gamers just starting. Not nearly as many bargains as you would find pre COVID.
Consoles are finally able to be bought at/near MSRP allowing new owners. And then inflation and job losses starting. Hopeful, but not optimistic.
Consoles are finally able to be bought at/near MSRP allowing new owners. And then inflation and job losses starting. Hopeful, but not optimistic.
Zarathustra[H]
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It is interesting. One could argue that the GDP was inflated prior to this, as seen in the overheated job market, and this is just representative of a return towards normal.
And I think that is the important part. I don't think we will see massive declines in consumer spending (like what might impact the gaming market) unless there are associated job losses, and with employers still screaming for labor, that seems unlikely unless things get A LOT worse.
So if it is a recession it is a funny recession
And how about that jobs report.
Interesting indeed.
Labor is always a lagging indicator though, so who knows, but I still think this will be a weird recession. GDP may drop a little bit, but probably just because it was overheated before.
There are still two open positions for every person looking for a job in this economy. I have a feeling the upcoming recession will cut back on that and make the job market more balanced, but not result in a ton of unemployment.
And this should also help slow inflation, as a recession should slow demand a little.
DukenukemX
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The way recessions work is the first that goes is unnecessary stuff, like the $59.99 games. A lot of people bought new cars and homes, so those are the last to go. Once the cost of entertainment is gone then comes the car as you're not gonna make that $1k monthly payment. Watch as the repo car market cranks up just before the recession fully hits. The last thing to happen is housing as people suddenly can't afford the homes they paid too much during the recession. It's gonna happen.
Realistically gaming is a very expensive hobby if you're going for the latest games. Smart people would realize there's a lot of old games that are super cheap and are really good. Modded a friends PS3 and loaded his machine up with games and I'm surprised of what great games you can play on the PS3. As a PCMasterRace guy I never payed attention to what consoles got, but the PS3/360 era must have had the best games ever. Just to give you a list.
- Demon Souls
- Dark Souls 1 & 2
- Last of US
- Persona 5
- Red Dead Redemption
- Uncharted 1, 2, 3
- GTA V
- Metal Gear Solid V <- How did this game get on the PS3?
- Rayman Origins and Legends
- Alien Isolation
- Batman Arkham Asylum and City
- BioShock 1, 2, Infinite
- Borderlands 2
- Crysis 2, 3
- Dead Space 1, 2 I won't mention 3
- Elder Scrolls Oblivion & Skyrim
- Far Cry 2 3 4
- Gold of War 1, 2, 3
- Mass Effect 1, 2, 3
- Fallout 3 and New Vegas
Flogger23m
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I don't think so. Recent shortages aside, $1500 will get you a decent PC. Or $500 for a console and factor in another $250 or so for online for 5 years. Even if you get a new $60 game a month, that is $720 a year. Most PC components like cases will last you 5+ years, and consoles will last 5-7 years until the next generation. Point being, you can spend $1200 or so annually and get a lot of games with decent hardware.
When you consider how much time you'll get from them compared to most other hobbies, it is still fairly cheap. Even just driving to other outdoor activities might cost you $5-15 in gas.
DukenukemX
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As an American these kind of prices are acceptable but for people living in other countries, this isn't affordable. A lot of these places will pirate their games, so something like a console is out of the question. If they own a PC then it's built from trash that was either getting thrown away or being sold cheap. Monthly reoccurring fees are obviously a no. Even still, they may just end up getting a laptop due to their financial situation forcing them to move around a lot. Compare that to movies which can easily be pirated or just ask for someone's NetFlix or Disney+ account.
Remember, we're talking about people who have little to no money to spend. Which could be some of us depending on how the economy progresses in the near future. There's a reason why free to play mobile games are popular, and that's because you don't need to spend any money. Also, you all do have phones. You can't exist today without a smart phone.
Flogger23m
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If you live in a developed country, it is cheap relatively. In developing it can be more expensive, and in undeveloped you're probably looking for basic utilities and not video games in the first place.
I am not sure why this is talked about has if it was not quite longly studied, it could change and obviously in the past in was in the context of explosive world growth, but try to spot the dotcom or housing recession here (or previous recession in the past that we could look at):
Tv/movie watching, fast food and Video games are on the cheaper side hobby and on the socially depress side has well that tend to make them quite recession proof, like drugs the poorer your life become the more attractive screen time/video games become.
https://www.prnewswire.com/news-rel...ce-again-to-be-recession-proof-301571744.html
The video game industry is generally considered "recession-proof" because people spend more time at home during a downturn. In addition, games are a relatively inexpensive form of entertainment
https://www.fool.com/investing/2022/05/25/are-video-game-stocks-recession-proof/
Looking through the past financials of EA, Take-Two, and Activision Blizzard, it is clear the Great Recession was not a big factor in their operating results. The main performance drivers were when they released new hit games. However, could that change if we head into a recession over the coming quarters?
A lot of the lessers revenues (less mobile ads revenues, less world revenues because of the US dollars being in modern time highest level versus other currency, less PS5 in the hands of people that we should have, less titles and less quality of them released because of the disruptions in the workflow, the Russian market) will not be due of a lesser appetite for games because of less money.
Tv/movie watching, fast food and Video games are on the cheaper side hobby and on the socially depress side has well that tend to make them quite recession proof, like drugs the poorer your life become the more attractive screen time/video games become.
https://www.prnewswire.com/news-rel...ce-again-to-be-recession-proof-301571744.html
The video game industry is generally considered "recession-proof" because people spend more time at home during a downturn. In addition, games are a relatively inexpensive form of entertainment
https://www.fool.com/investing/2022/05/25/are-video-game-stocks-recession-proof/
Looking through the past financials of EA, Take-Two, and Activision Blizzard, it is clear the Great Recession was not a big factor in their operating results. The main performance drivers were when they released new hit games. However, could that change if we head into a recession over the coming quarters?
A lot of the lessers revenues (less mobile ads revenues, less world revenues because of the US dollars being in modern time highest level versus other currency, less PS5 in the hands of people that we should have, less titles and less quality of them released because of the disruptions in the workflow, the Russian market) will not be due of a lesser appetite for games because of less money.
DukenukemX
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Not all developed countries have money. A lot of European countries don't have it easy with cheap PC parts like us Americans do, and their cost of living is also much higher. It's not uncommon for them to build some really low spec PCs.
Who ever said that video games were recession proof was an idiot. There are a few differences this time around compared to dotcom and 2008. Firstly, 2008 never did end and in many ways the recession we're about to experience is just more of 2008 with consequences. What's gonna happen soon maybe called the greatest depression. We're seeing record amounts of car repos. So to think that the video game industry isn't effected by this is just ignorance. Especially after 2 years of people buying up as many gaming consoles and GPU's they can get their hands on.
Yes the downturn is almost inevitable, that the base use is abnormally high demand being one reason (which is different), they still see 2022/2023 to be normally high and an increase over 2019.
That a strong paywall, would depend what the base is for the explosion and record talk, delinquency rate on car loans got specially low during the pandemy (I imagine the check, less spending on other area and also pre-pandemic car deals being perceived has good one):
https://www.federalreserve.gov/econ...inations-in-the-auto-loan-market-20220211.htm
GoodBoy
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The sky is falling??
Again?!?!?!
blah blah
Again?!?!?!
blah blah
Zarathustra[H]
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I disagree with this assessment.
There is no doubt that inflation has been painful for many, but that is already factored into the market.
On the flip side there are still over two open positions for every person seeking a job, and the June jobs report, while not quite as strong as the one before it, was pretty damn strong with 372k jobs added.
Most of the drops in consumer spending during recessions happen because people lose their jobs. The job market would have to fall A LOT for it to have that effect, because first companies would start easing off on open positions before they start laying people off.
It feels more and more like a recession is coming, but that it will just be a natural correction from an economy that has been overheated, to one that is more normal. While that will show up in metrics as a "recession" because any backing off of the economy does, it seems more and more like we are just looking at things returning to normal. Compared to an extremely overheated economy that will look like a recession by the numbers, but in practice it might actually be a good thing, correcting things back to normal, where normal "full employment" is about 5% unemployment, compared to the 3-something we are at now.
All of that said, metrics are often mixed early in a recession, and jobs are typically one of the most lagging metrics, so who knows what is actually coming, but to me it feels like this will be a blip on the radar, nothing like what we saw in 2007-2008.
It is clear to me that the fed overstimulated the economy a little bit in response to the pandemic, but predicting these things precisely is damn near impossible. Hvaing an overheated economy with some inflation is a much better problem to have than another housing/financial crisis, so I'd argue that they erred on the correct side of things. It would ahve been MUCH worse had they under-stimulated the economy during the pandemic.
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zamardii12
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I started playing God of War three different times trying to get into it because I had the exact same thoughts as you, but for some reason after I pushed through it for a while it was incredible. Once I got into it I couldn't put it down.
I buy games only used (RDR2 was an exception, I preordered it).......and I may not play them for 1-4 years.....because for me all gaming is "once I got into it, I couldn't put it down". I lost all my gaming buddies because they were all universally ravenous for whatever was new, no matter how badly it sucked or how not in the mood they might be to play it. I'm not that guy.
I'm the guy who buys a game used or clearanced out for $10 bucks, lets it sit around and then 3 years later I fire it up and go "Ugh, not in the mood". So then it sits another 5 months and then I give it another shot...and I literally play nothing but it for 2 weeks straight and I go "Well that was $10 bucks well spent!".
Could I have spent only $3 bucks on it if I had just waited until today to buy it? Probably.........but sometimes you have to have the thing handy in order to really go "yeah I'll play that" versus "Well let's see whtas on sale this week"......$10 bucks to $3 bucks not a big deal for me. I also re-play games.....I know friends who absolutely never do that, so for them the game leasing "Gamepass" type services are actually a thing if they time their subscriptions and 'deals' properly......I already have such a massive back catalog of cheaply aquired games it would only make sense if I joined a gamepass service specifically to play brand-new games, back catalog offerings I either already own or literally don't (yet) care about.
I'm the guy who buys a game used or clearanced out for $10 bucks, lets it sit around and then 3 years later I fire it up and go "Ugh, not in the mood". So then it sits another 5 months and then I give it another shot...and I literally play nothing but it for 2 weeks straight and I go "Well that was $10 bucks well spent!".
Could I have spent only $3 bucks on it if I had just waited until today to buy it? Probably.........but sometimes you have to have the thing handy in order to really go "yeah I'll play that" versus "Well let's see whtas on sale this week"......$10 bucks to $3 bucks not a big deal for me. I also re-play games.....I know friends who absolutely never do that, so for them the game leasing "Gamepass" type services are actually a thing if they time their subscriptions and 'deals' properly......I already have such a massive back catalog of cheaply aquired games it would only make sense if I joined a gamepass service specifically to play brand-new games, back catalog offerings I either already own or literally don't (yet) care about.
DukenukemX
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It basically starts with too much inflation that causes people to not be able to pay their bills. People start defaulting on payments and the stocks goes down, much like you see today. Companies respond by firing workers to try to make their stocks look good.
The unemployment rates are faked as they aren't going by the large amount of people who aren't even looking for work. Also the correction may go back much further than just before covid.
Madoc
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Not me. I plan buying a PS5 so that I have something to do while I'm starving to death.
They usually are not, I feel what you mean unemployment rate change without looking at labor participation rate change at the same time and rate of people working does not tell the complete story.
Which seem to be still be more than 1% below what it was in early 2020 (63.5% vs 62.25% now)
https://tradingeconomics.com/united-states/labor-force-participation-rate
Zarathustra[H]
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Yep, labor participation rate was the huge topic during the financial crisis from 2007-2008, but it is less so today for good reason.
Just about everyone who wants a job today can get one. It may not always be the exact job they want, but if you want to work there is absolutely nothing stopping you today. It doesn't even matter if you have experience or even a criminal record. They are hiring everyone. (and it shows)
Side note, I wish that chart intersected the axis at 0, to show the true difference...
While it is down significantly from 2007, it hasn't changed more than about a single percentage unit up or down since ~2014.
So, while the economy clearly lost some of its mojo in 2007 and that never fully came back, we are not in a significantly worse place today than we were 8 years ago.
(Side note 2, what have all of those people been doing since 2007? And where are they in this red hot market that has been SCREAMING for labor?)
Side note 3: The metric is pretty poorly defined. Its a simple percentage of those either working or looking for work out of the population overall above age 16. In order to make it more relevant I'd probably limit that age range more to exclude those in college and those who have retired. Maybe 22-65 would be a better age range?
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sharknice
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Are video games really negatively affected by a reecession?
I read something decades ago about movies actually making more money during economic downturns. Because they're a cheaper form of entertainment than a lot of alternatives like vacations, concerts, sporting events, etc. The same is true about video games today.
I read something decades ago about movies actually making more money during economic downturns. Because they're a cheaper form of entertainment than a lot of alternatives like vacations, concerts, sporting events, etc. The same is true about video games today.
The fact that legit retirement and people going to college younger can make the number change over time a bit strange, there is a 25-54 year's old metric that will not be affected much by those.
They sometime call it:
Labor Force Participation Rate for Prime Age Adults
https://www.stlouisfed.org/open-vault/2020/august/labor-force-participation-rate-explained
Read this today, loved it.
https://www.thegamer.com/game-dev-mark-venturelli-anti-nft-talk-big/
https://www.thegamer.com/game-dev-mark-venturelli-anti-nft-talk-big/
Zarathustra[H]
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I was unaware of that metric. Thanks for the link!
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This looks much more like I was expecting:
Participation right before the pandemic was up to essentially where it was before the financial crisis.
(Still wish I could put it in context by crossing the axis at 0 though)
The difference between the two is pretty stark though.
I wonder if it can be explained by:
1.) Aging demographics
2.) A lot of the people who gave up on work after the financial crisis just going into early retirement, and then aging out of this second metric, but still being included in the first.
I guess that's nice if you can do it? I certainly could not afford to retire early...
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