Despite the Recession, the Videogame Market Will Expand

There's a worldwide economic crisis going on at the moment. People are being laid off, companies are having financial problems, and budgets are slashed. Still, people are interested in playing videogames. The reason might be that getting a gaming console, like the Xbox 360 or the PlayStation 3, and a couple of games is still cheaper than going on a holiday to some far away hotel.

Mike Hickey, who is an analyst of the videogame market for Janco Partners, estimates that the industry will be worth 20 billion in 2009. In 2008, videogames were worth 18.8 billion and this year, they will grow by no less than 6.7%. It seems that, in 2009, videogame sales will be more important than sales of gaming devices. 12.6 billion dollars will be generated by the sales of the various titles, from Killzone 2 to Starcraft II, which will be released this year, an increase of 15.3% over the 10.96 billion generated in 2008.

The numbers that we will see at the end of this year will depend on the how worse things will get, as far as the crisis goes. A particularly bad economic situation could impact both videogame publishers, like Electronic Arts and Activision Blizzard, and makers of videogame consoles, like Sony, Nintendo and Microsoft.

Hickey says that “We continue to believe video games offer an exceedingly strong value proposition for consumers in the current economic malaise, and should continue to over index other forms of entertainment.” In other words, videogames are now generating more revenue than DVD sales of movies.

Meanwhile, sales of gaming consoles will fall this year by about 5.4%, in terms of value, to 7.4 billion dollars. The main reasons will be price deflation and the fact that hardware usually sells less during recession. Mike Hickey believes that sales of the Nintendo Wii and the Nintendo DS are critical for the development of the videogame industry in 2009.