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Games Industry Bracing for Double Dip Recession in US Economy

Posted on Tuesday, September 20 @ 12:25:10 PST by

After the recession in 2008, publishers and developers don't see the games industry as recession-proof as they would like to say it is. Or perhaps they used the recession as an excuse to change their strategies, like closing certain studios? Whatever the case, they are bracing for the likelihood of a double dip recession.

I believe we'll be seeing much fewer B-range titles as gamers flock to either AAA titles or downloadable/free-to-play titles, which Alain Corre, executive director of EMEA for Ubisoft also senses:

It's important to only do quality, because I think what will suffer is the games that are average or not well positioned. These ones will suffer the most. But the creme de la creme will be profitable.

He also believes that large companies need to use the full range of their international reach to weather any local recessions:

I think all companies have to be adaptive to recessions, but we have also to cover the world. If we can generate revenue on a worldwide basis, the GDP on a worldwide basis is actually growing. The rule of our companies is to make sure we can touch all the markets, so we adapt to different countries and we adapt the content.

While EA's COO Peter Moore doesn't think "we're about to go into a double dip recession", EA's European boss Jens Uwe Intat thinks that "the impact of recession on our industry is totally unclear":

If you have a total recession it might have an impact on people actually buying new consoles. But there are so many other devices out there that people can play on that I'm not actually really sure whether a recession would be a good or a bad thing. I don't know.

On the other hand, Crytek co-founder Avni Yerli is much more brazen on the recession's certainty and that innovation will be sacrificed:

2015, it will happen. End of 2014, 2015 it will happen.

...I think what will be at a disadvantage in this case is that you won't see innovative new games in this cycle or a year later, because nothing gets started because people, publishers, become more risk aware, and do not spend on new games or new IPs. They go for sequels, and very easy sequels.

Sony Worldwide Studios' Michael Denny, however, thinks that innovation is the key during rough economic times:

So when times are economically hard we have to try harder, we have to make sure our products stay relevant, we have to make sure we're pricing things right. But most of all we have to keep producing innovative new experiences, then people will still want them.

With so many differing opinions, what is clear is that the future is uncertain, perhaps more uncertain than ever. I happen to think that the US economy is on the verge of another recession because I don't think we really fixed the inherent problems in our financial market (*cough* derivitives *cough*), but I'll leave that to another editorial. Whether it happens or not, the games industry is still stronger than most. We'll survive.


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