In the previous post … I discussed about value proposition in terms of $$$ a video game provides to a consumer. Now we look at other factors that also contribute to this resilience against macro-economic problems.
Video games have become a main form of entertainment. Besides the incredible $$$ value proposition, it provides something else. Something quite important in times where everything that could go wrong has gone wrong and more. An escape … most games allows users to escape from their current world. World of Warcraft, Grand Theft Auto IV, etc. are examples of such games that allow a user to become engross and forget about their current problems.
During the great depression, one of the few industries that thrived was the movie industry. People wanted to get away from the bleak world, from the problems, from this and from that. It was entertainment that helped them move on. From all of the Disney movies, (based on true stories ones) you see dying towns where people rush to football games to escape their bleak situation.
Video games having migrated from the outskirts are now one of the main players in the entertainment industry. The entertainment industry has always shown resilience during hard times, now is not an exception.
As Lehman Brothers has kindly shown us recently … the problems continue to persist within the economy … then what industry is one that should weather the storm nicely? You got that right Video Games.
*Of course the problem here is one would have to find a good company to invest. A rising tide lifts all ships … but some are just so full of holes they are drowning themselves. After a few more posts on macro econ and its effects on the industry I will jump into a detailed analysis of the Big players … Sony, Microsoft, Nintendo, Take 2, THQ, Activision, Electronic Arts, and Ubisoft … and some of the smaller players that I would deem relevant.
