Video games: ‘Recession resistant’ or doomed?
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Is the game industry in critical condition? Credit: Screen shot of Saw courtesy of Konami.
There’s been no shortage of hand-wringing this summer as, month after month, video game sales reported by the NPD Group fall off a cliff.
Game executives, who entered the year touting the ‘recession resistant’ nature of video games, are now forced to admit that their business is just like all the others when it comes to a recession. Some are even speculating about the industry’s apocalypse. That’s at least the assumption of the opening episode of a documentary series released this morning titled ‘Video Games Are Dead.’
Produced by Scott Steinberg of DigitalTrends, the first online-only episode explores what we’ve been wondering in recent months: Is the traditional game publishing model facing imminent extinction?
Publishers such as Electronic Arts and Activision Blizzard would probably beg to differ. But a closer look at what they’re doing to future-proof their business tells a slightly different story. While both are still pumping out discs, they’re also turning full tilt to alternative ways to get their games out.
EA, for example, is supporting OnLive, a proposal to stream games via high-speed broadband. It’s also exploring ways to give away its games for free in hopes players will pay for extras. Revenue from its digital efforts exceeded $100 million its first quarter.
Activision, meanwhile, has sold millions of copies of its map packs for its Call of Duty games via Xbox Live, the Microsoft online marketplace. And part of the reason its has weathered the economic storm is the ongoing revenue it receives from subscribers of its online colossus, World of Warcraft.
These types of revenue aren’t counted in the monthly NPD reports, which tallies sales of shrink-wrapped discs sold at retail stores, not revenue from sales of online transactions.
-- Alex Pham
Follow my random thoughts on games, gear and technology on Twitter @AlexPham.