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Have Video Games Lost Their Recession-Proof Armor
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Have Video Games Lost Their Recession-Proof Armor

Hello everyone. Today, we’re discussing the difficulty of video games. Don’t just look at the boxes. But first.

This week’s most important gaming news

  • Grand Theft Auto maker Rockstar Games is making a clean break. GTA VI will probably look more different due to this.
  • Sony reduced its profit forecast following the fact that its PlayStation division suffered and sales of games fell.
  • The CEO of crypto-punk Axie Infinity developer Sky Mavis transferred $3 million into Axie Infinity’s cryptocurrency token just hours before revealing the extent of the hack.

Is gaming recession-proof?

According to some forecasters, the dark storm cloud of recession is getting closer or is present according to others. Who’s going to be soaked?

It’s been said that the industry of video gaming is recession-proof. If there’s an economic slump and the companies that produce games, software and hardware are likely to survive the storm and possibly expand.

Serkan Toto, the chief executive officer of Tokyo-based games consulting firm Kantan Games, Inc. The chief executive officer of Kantan Games Inc. says he cannot recall a recession during the past four decades that didn’t significantly affect the games industry. In fact when the Great Recession of 2007-2009, Activision joined forces with Vivendi Games as part of the $18.9 billion deal and acquired the World of Warcraft publisher Blizzard during the process.

What makes games so unique? Toto, in his article, notes that many AAA games nowadays are played at no cost. In addition, it is generally accepted that those losing their job consume a lot of entertainment items. Toto declares that he’s “in the camp that the industry is recession-proof indeed, at least to some extent.”

We’re in a completely different period compared to 2008, but. If recession strikes shortly, it’s likely to be amidst a robust labor market. “This recession isn’t normal.”

The gaming industry is a brand new industry as well. It’s now a 200 billion business, according to NewZoo, an analytics firm-exponentially larger than it was in 2019. It’s also become less independent and more in a bind with extensive technology and advertising.

Microsoft Corp., Apple Inc., Google, and other major tech companies are now stewards of their gaming empires. Microsoft’s $69 billion planned purchase of Activision Blizzard only tightens the connections. The industry’s success now depends on more than the latest $60 blockbuster game or $400 console. It’s based on how larger companies perform in other areas of their business.

Nothing demonstrates this more clearly than the rapid growth of gaming on mobile devices. Google Inc.’s Google and Apple govern the online storefronts that sell an enormous amount of games. According to Mandeep Singh Analyst at Bloomberg Intelligence, they also take commissions from developers and significantly impact the game industry in general. Publishers of mobile games, according to him, will be “dependent on what Apple decides in terms of its own services.”

Additionally, mobile games have brought an economic model fast, becoming the norm: free-to-play. However, games are less expensive than ever and more dependent on advertising to generate revenue. Check out Roblox Corp.’s involvement in ads and Unity Software, a gaming software firm Inc.’s most recent $4.4 billion acquisition of mobile advertising company IronSource.

It’s the place where things could become very risky. If big companies in advertising or tech fail, the gaming business could also. Microsoft, Apple, Amazon.com Inc. and Alphabet have squeezed throughout their financials this week, proving that they are navigating the economic storm better than the majority.

Gaming companies will be on the scene the following week, and you should keep your eyes peeled.

 

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