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Video Game Market Feeling The Crunch

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As any of you that follow the stock market know, the US market is having a very tough time right now, every day we are hearing about more layoffs, billions of dollars being wrote off, new scams and for the longest time it seemed like the video game market was immune to this, well not any more. GamingFront.net has an article up right now highlighting some of the troubles that our industry is in and it isn’t looking so great anymore.

The Video Game industry which was once thought to be recession proof took a major hit today. Twelve of the industries major players were hit hard today by losses in the stock market. Among the most notables include; Sony Corp (-4.34), The Game Group (-4.38), Vivendi (-15.68 overnight), Gamestop Corp (-8.06), Walt Disney (-3.26).
Other companies are reporting modest losses. Many are contributing Gamestop Corps. steep losses to Amazon.com’s announcement that they will be entering the used game sales market.  The worst losses of the day are coming from Vivendi (owners of Activision).  Chief Executive Officer of Vivendi Jean-Bernard Levy voiced his concerns with Bloomberg.com over the global recession in relationship to Vivendi.
“We are resilient, but at one point in time I think we are going to be caught, mostly by unemployment. My biggest fear, for my business, is unemployment rates are going up.” He went on to add: “We may end up with a pretty deep and long recession.”
The full effect of todays sharp losses is still unknown, but after today one thing has become very clear the Video Game industry is no longer recession proof.

Now you might be thinking, how does this effect me? I’m not in the market, I’m not losing any money. Well, the way this will effect you is that while the gaming market is losing money they will be taking less and less risks to shore up any losses. You will see more sequels, more of the same and less ideas like what we saw in LittleBigPlanet or Mirror’s Edge because it just isn’t worth the risk to their stockholders. We will end up seeing less quality and more quantity. Don’t believe me? Look at all these gaming layoffs that have been happening as of late, these layoffs will impact the games that we play. Do you really think the games will be as polished as they are now with out all the QA, or the designers working on them?

Lets take THQ as an example, they just announced that they are laying off 24% of it’s workforce. Now THQ also has one of the games coming out later this year that I’m really excited for, UFC 2009 Undisputed, and this is why I’m using them as an example. Do you really think that UFC 2009 Undisputed won’t be affected in any way? In reality they have less people working on this game, less designers building and polishing the game, less QA testing for bugs and just less positions all around making sure this game will be the hit that I hope it will be. And this is just one game, now imagine the majority of the gaming market having this same issue.

It almost seems like a downward spiral that we are approaching that really could impact the future of gaming for years to come.

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  • snakeman555

    The video game industry will be effected like this until the economy settles back to the norm. Hopefully in the next year or so we will start to see the economy getting better, and the video game industry along with everything else will start thriving again. Until then we will just have to wait and see what happens.

  • TheL1T1G4T0R

    Thank God for DLC.

    With the current economic situation, developers are suffering and will most likely put out products of slightly less quality. But that’s the beauty with modern gaming. All those defects and bugs can be fixed later on to improve the quality of the game. I think we’ll see a whole bunch of developers focusing on fixing their games instead of pumping out new titles.

    I would figure it would be more cost effective to fix your products and try to get those you’ve already put out to sell better. But who knows? If a game truly blows, there’s not much you can do to fix public opinion.

  • that is surprising, since people need some way to vent and video games are so good for this purpose