Credit crunch, credit shmunch!

So the results are in. I know it’s not a game but… well we won. I know it’s dead serious and all of society is about to crumble and that but… gaming totally came top of the leaderboard. With the kills… sorry I mean sales totted up it’s been a financially horrible Christmas. The high street numbers are awful, the worst in 20 years, with a 3.3 percent downturn on last Christmas. Despite trying to put our best foot forward and keep the economy turning over we simply couldn’t spend our limited funds this year on excessive gifts for our friends and relatives.

So desperate are we to save our cash we aren’t venturing out to the pub or cinema. We aren’t spending our evenings in restaurants or clubs, we’re staying in. Of course we as gamers are well aware that one of the most cost effective forms of entertainment is gaming but it seems the general populous have also, out of sheer necessity, learned this lesson too. As the numbers come in for game sales, the suits at big chains like Game are allowing a little upturn at the corners of their mouth. Game are reporting a 16 percent rise in sales for the 6 weeks around Christmas and 2008 overall shows a whopping 28.1 percent group sales rise over 2007. Blockbuster and HMV are also confident for 2009. It’s not just the independent retailers who are sitting pretty amongst the economic chaos, games publishers are also rather pleased with themselves. Nintendo have been knocking it out the park in the UK with massive sales and Ubisoft were named ‘Best Games Publisher for Quality and Attitude to Retail’ in MCV’s recent retail survey.

All these figures bring up a few questions. Firstly is this success within the UK gaming industry likely to be noticed by the Government? There has been much discussion between the industry and the authorities as to whether UK developers should be afforded the same government support and tax breaks as countries like Canada and this past Christmas is an outstanding example of why this industry is so important to the UK economy. On a more gloomy note I wonder if gaming can’t help but eventually be pulled into the blackhole of the financial downturn as every element of the consumer market relies somewhat on every other element.

My last private worry, plucked from the dark recesses of my mind might make me sound like a crackpot conspiracy theorist but it was given some credence by my mother independently making the same accusation. While standing next to each other in Game flicking through the second hand shelves, our hands a blur with years of experience, I expounded this theory about the games industry thriving within and because of the financial crisis. My mother, not looking up from her search said “Yeah but is that really so or has the industry put that idea out there to keep us buying. This economic thing… it’s all psychological, you know?”


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15 responses to “Credit crunch, credit shmunch!”

  1. Garvaos avatar
    Garvaos

    Your right its all well and good that the gaming industry is doing well from the un-mentionable CC word. But i ear it may be pulled into the black hole also. Fingers crossed it doesn’t

  2. Duncan Aird avatar
    Duncan Aird

    While I hope that the gaming industry does get sucked into Oblivion (even I’m ashamed of that pun), I still think it’s an achievement it’s weathered the storm this long.

    The best example of a reason to (possibly) panic comes in just 3 words: Aliens: Colonial Marines.

  3. City avatar

    i love the fact you mention gamers have long known the best thing to do with no money is to stay in and play games – this became somewhat of a saviour for my flat at uni in the first year when none of us had money.. and yay for everyone else catching on.

    I dont know if we will get pulled into the blackhole too.. i bloody hope. I would probably cry if game went the same way woolies did.

    (and your mums a conspiracy theorist nut.. awesome!!)

  4. Michael avatar

    Bedroom coders? Low cost, digital distribution, win.

  5. Kate avatar
    Kate

    I think an important chunk of this sodding credit crunch is psychological. I’m sure we wouldn’t be in such deep shit if The Daily Fail etc. hadn’t constantly posted “WE’RE ALL GOING TO DIEEE! LOCK UP YOUR CASH!” articles about six months before it all kicked off. I know the media has a responsibility of keeping the general public informed, but that doesn’t mean you have to scare the shit out of them.

    I’ve just stopped reading those articles now. I’m just concentrating on what I’m personally experiencing around me. If you read stuff like that every day, it just depresses you. But for the record, I don’t think this industry is recession proof. It seems every morning a different developer has gone under, or a publisher is applying job cuts. I think gaming will weather the storm better than most, but there most certainly will be – and have been – casualities. The government could help, but I can’t see that happening. It’s a real shame.

  6.  avatar

    First off lets not use the term “credit crunch”, its misleading and distracts from the reality that this is a recession. Thats like calling the situation in Gaza “a bit of a barney”.

    I think one question that you have to consider is how much Game Ltd would have made this xmas if it wasn’t for the recession.

    The tax breaks would be a very good thing for the government to do. Not only do they have them for the games industry in Canda but the film industry has the same deal over here. I could also go into the idea by MS/Sony/Nintendo cutting their licencing costs it would push down the price of games meaning more games were bought and the devs would get more money.

    Ah I’m off to write a proper blog article about this.

  7. Darach avatar
    Darach

    Historically, there are only two industries which have proven recession proof;
    Crime, and some parts of the entertainment industry.

    As such, I recommend everybody applies for a job with their nearest organised crime syndicate if they wish to weather the storm in relative comfort.

  8. Tony avatar
    Tony

    Darach, what if I decided to become a clown and entertain the mafia? It’s a win-win.

    Personally since about June I’ve been on a one man spending spree. We moved house and have spent a fortune on furniture, a new washing machine etc. I also bought just about all the big games that came out in November for both PS3 and 360. I’ve also steadfastly refused to go to the pub less, so I’m still spending plenty on beer.

    I think Gordon Brown ought to to give me a medal for my stalwart efforts towards saving the economy.

  9. Jonathan Grier avatar
    Jonathan Grier

    I don’t think it’s a knowledge we have over the rest of the world.

    I think it’ just interestingly convenient that the thing we want to spend our time doing is largely free.

  10. Kate avatar
    Kate

    @ Anonymous – “First off lets not use the term “credit crunch”, its misleading and distracts from the reality that this is a recession.”

    Well, technically we’re not in a recession until the 23rd of January, when official figures will state whether or not we’ve had six months of negative growth. Of course, it’s pretty much certain that we will have…

  11. Lordstar avatar
    Lordstar

    to quote you on

    All these figures bring up a few questions. Firstly is this success within the UK gaming industry likely to be noticed by the Government?

    I think For new starters and maybe even falgging companies with a good track record maybe on a case by case status they should be give some sort of tax breaks or even financial support but only after a game goes to market or you would get people setting up companies and then F’n off once the cheques cleared. It would also have to go though some strindgent quality tests or you would get people releasing any old trash.

    maybe some sort of tax break on earnings of company after initial release date? But only on earnings inside great britan or EU.

    Or maybe some attractive package to try to tempt companies to move there offices from other countries in to the UK.

  12. Andy Turner avatar
    Andy Turner

    Glad to see that were not likely to see any beloved game vendors go the way of Woolies in these harsh times.

    You also brought back both fond and terrible memories of my time working at Game with this post…I used to love reading MCV whenever we had a little downtime and we used to have a great time chatting with customers, demoing guitar hero and playing monkey golf…but then there was the horrors of sorting pre-owned after the rotten kids had had a weekend of pillaging my beautiful alphabetized to perfection pre-owned bins….by the sound of it you and your mother enjoy pre-owned shopping responsibly though.

  13. Ben avatar
    Ben

    Gaming will suffer, even if its in the smallest context.

    Publishers might not be as willing to try out new IP’s and so on, instead preferring to bank role [Established Franchise: Sequel 3] instead.

    Of course, publishers will probably start being more tight with money elsewhere, just today it was announced that EA let Pandemic Brisbane go.

    Developers will feel the backlash of it all, this year in particular I think, last year we entered the economic crisis with games already in development so was already too late into development to consider stopping it. But even then, games got content cut, likes of Tomb Raider underworld (according to ex-staff) had quite a bit cut at the end of development just to get it out the door in time, otherwise the financial hit would have been huge.

    Retail side of things won’t be complaining I don’t think, people might start looking at the pre owned games section of a shop more, which is good news for the shop, bad news for the developers.

    Today, Game have announced they’ll be launching a Game rental service, so it’s obviously not slowing them down to much, sales of games were up 17% last year the ERA just released.

    That said, for Uk developers, it’s expected the UK will slip to 5th place overall, behind the likes of South Korea, China and possibly Canada. To make grim reading “In the last six years, half the independent development studios have closed or been bought by outside[Non UK] investors.”

    Clearly its a case now, as others have said that the government pulls its fingers out and acknowledges the industry a little bit more. If they need a bit of advice just tell them to look at Canada and see how they treat the gaming industry.

    As for gamers though, I’m confident we wont be disappointed with 2009’s games this time next year.

  14. shaun mc avatar
    shaun mc

    im wondering at this point is this why GAME are trying to get into the rental market as well in order to appease the publishers who are obviously losing out on revenue streams that come from preowned games. I worked for GAME for several years (03-06) and during my time with the company their policies shifted towards what most people could compare with Currys. They make more of a determined push to get insurance sales on consoles.

    It doesent help Kirsten and co that GAME and HMV both admit to raising the price on systems/games due to lack of availability elsewhere. Even with their buying of Sainsbury reduced stock they did indeed rip off customers who could have made a nice saving in money tight times. I understand that everyone needs to make money, thats what business is about but when you buy consoles from a supermarket then sell them at a VASTLY inflated price that my friends becomes illegal.

    Sorry I’ve gotten just a little off topic but I just wanted to say that GAME actually harm the medium regarding sales rather than bolstering it. Its a shame but lets see where 2009 takes us!

    shaun mcilroy!

  15. Lorna avatar
    Lorna

    I too think a large part of the problem is psychological. How many folk actually thought anything was wrong until the press started screaming that we were all doomed and Diana would be spinning in her grave?

    Few industries are recession or ‘crunch’ proof, though Porn and food are as close to Teflon as they come, fulfilling needs, whihc I suppose entertainment also does. I imagine reusable experiences such as DVDs and games will continue to sell well but one shots like nights out, cinemas, and the like may suffer. As far as gaming goes, since it happens in the home, it will, should it ever come to that, most likely be the last to fall in this war of crunch. Hurrah and all that.

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