Credit Crunch vs Gaming Industry

[Orca]

Though everyone important enough to be counted keeps saying gaming (or entertainment as a whole) is immune (or at least highly resistant to) a recession/depression, there's no denying the companies responsible for bringing us games aren't.

Sony is cutting 8,000 jobs from its electronics division (http://www.bloomberg.com/apps/news?pid=20601087&sid=a0MxymJQvqMA&refer=home), slashing investment, and divesting itself of unprofitable businesses in an attempt to cut costs by $1.1 billion.

Midway is, as is well known, in all kinds of financial difficulty. That might well be happening even in a good economy, however. Make another MK-lite game, guys - maybe that'll help.

Even developers are being hit - with Factor Five in its own credit crunch according to a blog post by an animator that 1UP (http://www.1up.com/do/newsStory?cId=3171691) found. The blog post was subsequently removed and a new one (http://mistasam.blogspot.com/2008/12/1upcom-misinterpretation.html) claims it was misinterpreted, though the cached version (http://74.125.77.132/search?q=cache:m0yLpSEuBIgJ:mistasam.blogspot.com/+http://mistasam.blogspot.com&hl=en&ct=clnk&cd=1&gl=us) doesn't appear to bear that out.

[Narradisall]

Who keeps saying the entertainment industry is immune?

It's a leisure activity, not a need, of course it will suffer at some point.

Sony's business plans and poor performance had this coming from miles away though. Plenty of places will go down the tube (they're not as vital as the motor industry, right, right?) I just hope the good developers and the talent still stay in the market when the dust clears.

[Commissar Rob]

The line from analysts and such seemed to be that the gaming industry would weather the storm better than most...to a limit. But cracks are going to show - there was an article yesterday at Gamastura about the used-game issue that says the economy is exacerbating an already touchy subject (http://www.gamasutra.com/view/feature/3872/as_recession_deepens_used_games_.php). Midway's been dying for a while now. And Sony's had some broad issues with their business as a whole for a while as well. We live in interesting times...

[Ghost Rider]

I think it's just as susceptible to the current economic situation as any other past time. You can see that from the recent news of several deals being cut to buy other game companies or parts of them, some of which I doubt would of happened (or maybe not happened as easily) in the past.

[LongStepMantis]

Midway is, as is well known, in all kinds of financial difficulty. That might well be happening even in a good economy, however. Make another MK-lite game, guys - maybe that'll help.

Midway's problem with the MK franchise, imo, is that they're devolving rather than improving the titles. The best MK games were the early entries and the last handful have been terrible. I have heard positive things from my friends who played MK vs. DC, so maybe they're actually learning. I haven't played it yet so I can't say.

As long as they use the same money the rest of us use, I don't see how anyone can be immune to the financial crisis.

[VerseD]

I'm not surprised to see Sony crash. Microsoft is probably doing fine, and I know Nintendo is still printing money with the Wii.

This is bad news for game designers though. Small developers like Factor Five are going to take a hit, and big publishers like EA aren't going to take chances on games like Mirror's Edge when they have sure profit from Madden or Rock Band or whatever.

[KingGorilla]

Who keeps saying the entertainment industry is immune?


Oh, no no no, major movie and music publishers are immune. Anything smaller is boned. The sick amount of grants, tax breaks, the movie industry enjoyed in the 30's and 40's were what made them recession proof. If you have to self fund or look for credit, that is a different matter.

[itchyeyes]

I think the real casualty is going to be the games. When banks aren't loaning anyone any money, nobody is green-lighting new projects. Companies with limited resources will place their money on sure bets rather than something new and risky. In about a year or two here, release lists are going to start looking thin, especially in months not ending in "ber".

[Narradisall]

Oh, no no no, major movie and music publishers are immune. Anything smaller is boned. The sick amount of grants, tax breaks, the movie industry enjoyed in the 30's and 40's were what made them recession proof. If you have to self fund or look for credit, that is a different matter.

I honestly wonder if the gaming industry has become major enough a player to join the movie and music industry in that regard. It has certainly boomed in the last few years and in some points has begun to outstrip and even take some business from the other two.

Personally if the fucker that added the asteriod part to Dead Space goes in the latest EA cuts I'll be dancing on his pink slip the bastard.

[H.Bogard]

I predict the Demise of Sony and Microsoft and the rise of the Sega vs Nintendo days with the DreamMachineCast 2.0 and WiiII!