2009 Was a Horrible Year for Videogames

In 2008, as the worldwide economic crisis was hitting the global industry, many were talking about how videogaming was pretty much “recession-proof” mainly because of the fact that people would be reducing budgets for going out but that would mean they have the money to pick up videogames to enjoy at home. Now, one year later, major publishers like Electronic Arts are having problems, laying off more people and saying that a smaller number of games will be released, and is seems that the recession has finally hit videogames, if analysts like Michael Pachter are to be believed.

The analyst who works for Wedbush Morgan Securities states that “2009 continues to be a horrible year for video game publishers. Although a small rebound to sales growth in September sent a signal that the console cycle is not quite dead yet, investor confidence remained shaken when October sales again reverted to a year-over-year double-digit decline.”

He predicts that sales will again spike in November and bring some confidence but that December will be worse than expected as people continue to be frugal with their Christmas shopping. It seems that the first green shots for the videogames sector will appear in January 2010, when growth is expected to return and an upward trend lasting until October 2010 emerges.

When talking about specific titles that have failed to meet the expectations of the market, Pachter says, “each publisher will remain susceptible to criticism, with investors likely discounting the performance of The Beatles: Rock Band and Left 4 Dead 2 as low-margin contributors for EA, and others skeptical of the staying power of Activision’s Guitar Hero franchise.”

Michael Pachter also revealed that the sales of PC games in October were down about 38% year over year to reach 27 million dollars in the United States, which signals that direct sales for the platform are in free fall.