Sunday, October 19, 2008

Online Games Are Recession Proof

Here is an interesting article from Christopher Cummings of

All year long, journalists, bloggers and various analystsYes! No! Maybe! have wondered, "Are games recession-proof?" The consensus seems to be:

DFC analyst David Cole puts it best, noting that the fizzling economy doesn't appear to be affecting game software sales. "Consumer spending on software is at record levels," he says, "and the game business seems to actually benefit from a recession, because games are a relatively cheap form of home entertainment."

If you go back to the Depression, obviously times were tough -- even tougher than they are today -- but people still needed to be entertained. They needed to escape their everyday lives and forget their problems. So what did they do? They went to the movies, read books, listened to the radio, played card and board games. They did everything we do today, and they had to do it cheaply, because money was in short supply.

Know something that's not in short supply? Computers. I know, I know, you probably don't even consider the PC a viable game platform since everyone knows the PC as a gaming platform is dead. Except, it's really not -- and that could be gaming's great salvation during these tough economic times.

The PC Gaming Alliance estimates there are 263 million online PC gamers. And according to DFC's new Online Game Market Forecasts report, PC online game revenue alone passed $7 billion in 2007, not including retail sales. Total PC game revenue is expected to reach $19 billion by 2013. Those are impressive figures for a "dead" gaming platform, and they add an exciting wrinkle to the question of games being recession-proof.

As times toughen economically, will consumers continue to shell out $30 to $60 for a console game? Will they back off the higher-priced games in favor of budget-oriented Wii titles? Or will they fire up the PC to play free casual games online?

Of course, there's a very real danger that shrinking consumer spending will affect advertising buys, which will negatively impact the free casual games market, which is largely ad-supported. However, while ad spending may slide in TV and the offline world, analysts predict inexpensive media types, such as the Internet, will weather this economic downturn relatively well. So maybe free online games aren't such a bad place to be, for consumers or for game developers/publishers.

My money, as always, is on online bingo. If you have a few minutes to kill, why wouldn't you go online, play a free game that you know with people you like, and try to win a few bucks? As gas prices rocket up and down, and the stock market sits and spins, family night with Dickie the Bingo Caller looks better and better.

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