The gaming industry is $16 billion and enjoys a massive value advantage over competing entertainment. With a down economy, consumers cocoon themselves and tighten their belts, which further leverages the power of gaming. May 2008 sales were up 43% over the same month last year, and projections for 2008 show a 27% increase in sales to $23 billion. Taking advantage of the economic downturn to increase video game sales makes perfect sense.
Many hardcore gamers do not have mortgages or huge food and utility bills. They are young adults who can afford to spend money on gaming. Hardcore gamers are a small subset of video game consumers, but their purchasing power is vast. They will pay a premium price for the latest version of their favorite game, whether they can afford it or not. As a result, they may be the most valuable consumers during economic downturns.
Free-to-play video games
If you are wondering whether the future of the video game industry is bright, look no further than the current free-to-play phenomenon. Originally, video game publishers made most of their money from the sale of the initial game. Today, the industry relies heavily on ad revenue and virtual economies driven by microtransactions, which have a long-term positive impact on sales. As long as the economy remains healthy, there will be no major downturn in the free-to-play segment.
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The video games industry has created a world of unlimited trade. It is a new medium of viewer engagement that rewards avid gamers while providing a platform for manufacturers to reward their employees and increase their revenue. ‘gCommerce’, as it is commonly known, is the commerce of gaming. Increasingly, game manufacturers are realizing the potential of this new medium, utilizing it to reward their employees and avid gamers. Today, video games generate over $200 billion in annual revenues, and have a group of over 2.7 billion people worldwide.
Impact of inflation on the video game market
The game industry may have long masked itself as recession-proof, but it might be a little more fragile during times of economic recession. As a result, video game budgets are often cut, and some consumers aren’t even willing to spend as much money on entertainment as before. Inflation is one of the biggest culprits in shrinking entertainment budgets, as consumers cut their spending on movies, TV, and video games. Those who contribute to their budgets typically play video games, so it’s possible that the market will be less robust during times of recession.
Growth of the industry during economic downturns
The gaming industry is largely immune to the global economic downturn, but it does have some tailwinds that make it a recession-proof sector. These tailwinds are counter-cyclical during bad times and accelerate growth during bull markets. This article explores how the gaming industry can benefit during these times. Here are four reasons why. 1. It’s recession-proof: The industry was growing so fast that it was outpacing the rest of the economy.