Jul 18 2008
RamblerMicrosoft Says Video Games Will Survive in a Poor Economy
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Microsoft Corp is so far not seeing any slow down in its Xbox business from the soft U.S. economy. They expect the rest of the video game industry to weather downturns in consumer spending.
A senior vice president at Microsoft’s entertainment and device division has said that video games remain a high point for consumer spending.
Analysts are concerned that a decline in discretionary spending (in large because of higher prices for gasoline and food) could affect what money consumers have available for spending on entertainment.
The prediction is that even in times of economic downturn, consumer spending is still going to exist and people will prioritize it.
As of late April, Microsoft said it sold over 19 million Xbox 360s since it debuted in November 2006. At the end of March, Sony had sold 12.85 million PS3 units and Nintendo had sold 24.45 million Wii units.
Microsoft has announced that “Gears of War 2,” the sequel to its blockbuster shooter game, will be released on Nov. 7 anticipating the crucial holiday shopping season. The original game has sold 5 million units worldwide since its launch in November 2006. The sequel could do even better because there are more customers with Xbox 360 consoles now than there were when the original was released.
“Gears of War” is especially profitable for Microsoft because the game comes from Microsoft Games Studios. This means that Microsoft gets all the revenue and profit from game sales as compared to a few dollars in royalties for third-party titles.
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One response so far
I suppose Microsoft, may be right to a point. As families, opt to stay home more, due to rising gas prices, they will continue to buy leisure type activities. However, should we go into a full blown depression, something that looks more and more likely, I think they will see they are very much wrong.