Video games are recession-proof
Video game sales are expected to be strong this year and in 2009, despite the economic troubles that have hurt some retail stores that sell the games, say the industry executives.business Updated: Nov 14, 2008 20:58 IST
Video game sales are expected to be strong this year and in 2009, despite the economic troubles that have hurt some retail stores that sell the games, industry executives said on Thursday.
Speaking at the BMO Capital Markets interactive entertainment conference in New York, they said their optimism is fuelled by solid sales of advanced game consoles made by Nintendo Co Ltd, Sony Corp and Microsoft Corp.
“I think it’s going to hold up a lot better than other industries,” said Mindy Mount, chief financial officer of Microsoft’s entertainment and devices division. “We remain cautiously optimistic.”
Reggie Fils-Aime, president of Nintendo of America, said its Wii console continues to sell out, while sales of the pocket-sized DS game machine have risen almost 20 percent year on year. For that reason, Nintendo has no plans to cut the price of the $250 Wii, he said.
Microsoft in September cut the entry level price for its Xbox 360 to $200, and Sony last year lowered US prices of the PlayStation 3, which comes with an 80-gigabyte hard drive and a Blu-ray video disc player, to about $400.
“If I look at this from an industry perspective I think cautiously optimistic is quite appropriate,” Fils-Aime said. “If I look at it from a Nintendo perspective, I would say very optimistic.”
The outlook for video games is rosy in contrast to many other industries that are suffering from the global financial meltdown and rising unemployment, which has prompted shoppers to curb spending.
This week, Best Buy Co Inc, the No 1 US electronics chain, slashed its profit forecast and Circuit City Stores Inc filed for bankruptcy.
Yves Guillemot, CEO of France’s Ubisoft Entertainment SA —maker of the hit “Splinter Cell” franchise — said video games are selling well at low-cost retailer Wal-Mart Stores Inc and game-seller GameStop Corporation. Reuters