Causal Games Are Recession-Proof

All year long, journalists, bloggers and various analysts have wondered, “Are video games recession-proof?” The consensus seems to be: Yes! No! Maybe

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.

— Christopher Cummings

Christopher Cummings, author of The Left Click columns appearing on DailyGame.net, is senior product manager for Gamesville.com, where thousands of people compete daily in free, massively multiplayer games to win real cash prizes. You can join the Gamesville group on Facebook

This editorial originally appeared at
http://www.dailygame.net/news/archives/008398.php

3 thoughts on “Causal Games Are Recession-Proof”

  1. Hi Jay –

    Actually, yes, I do believe it’s true. While the next 18 months (at least…) are going to be pretty rough, and some casual game start-ups will likely end up closing their doors, there is a way forward if you’re clever and well-capitalized.

    At Gamesville, we spent the bulk of 2008 diversifying our revenue sources and revenue streams so we wouldn’t just be beholden to display advertising. For example, we now have a subscription service where users pay us directly, and a B2B white label solution which has other businesses essentially paying us to license our software.

    Elsewhere in the casual sector, Big Fish just announced $83.3 million in funding from Balderton Capital, General Catalyst Partners and Salmon River Capital. That’s the largest venture financing deal ever in a U.S. online gaming company, and it was announced well into the world’s current global economic woes.

    The casual games industry is continuing to grow, with an estimated 200 million game players worldwide. Now is not the time to be timid; now is the time to forge ahead!

    Chris

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