Hello, my name is Cecilia. Today, we will discuss how difficult video games are. Not the boxes; you will understand what I mean. However, initially…
This week’s top gaming news
- Rockstar Games, the developer of the Grand Theft Auto video game series, is undergoing a transformation. As a result, GTA VI will likely have a distinct appearance.
- Sony lowered its profit forecast after the PlayStation division and game sales declined.
- The CEO of Axie Infinity developer Sky Mavis shifted $3 million worth of the game’s cryptocurrency token hours before announcing a severe attack.
Are Games Recession-Resistant?
According to some prognosticators, or according to others, the ominous storm cloud of a recession is approaching or has already arrived. Who, then, will get wet? According to popular belief, the video game business is recession-proof. Therefore, if there is an economic slowdown, companies that produce video game software and hardware should be able to weather the storm and possibly even continue to expand.
Serkan Toto, CEO of the Tokyo-based games consulting firm Kantan Games Inc., cannot recall a recession in the past four decades that had a substantial influence on the games business. In truth, Activision merged with Vivendi Games in an $18.9 billion deal during the Great Recession of 2007-2009, acquiring World of Warcraft publisher Blizzard in the process.
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Why are Games So Unique?
“Gaming is a relatively inexpensive pastime,” says Toto, noting that many AAA games can be played for free today. In addition, it is widely accepted that unemployed individuals continue to purchase a substantial amount of entertainment products. Toto states that he is “of the opinion that the industry is truly recession-proof, at least to some degree.”
Compared to 2008, though, we’re living in a totally different era. If a recession occurs, it will coincide with a robust labor market. Michael Pachter, an analyst at Wedbush Securities, states, “Currently, unemployment is low, so it is unclear if a fall in economic activity will benefit the gaming industry.” This economic downturn is abnormal.
The video game industry is also an entirely novel entity. According to analytics firm NewZoo, it is now nearly a $200 billion giant, which is enormously larger than it was in 2019. And it has become less independent and more intertwined with large technology companies and advertising.
Microsoft Corp., Apple Inc., Google, and other large technology companies now manage their own gaming empires. The impending $69 billion acquisition of Activision Blizzard by Microsoft only strengthens the ties. The success of the industry depends on much more than the newest $60 blockbuster game or $400 system; it also depends on the performance of these larger corporations in their other industries.
The emergence of mobile gaming is the most evident indicator of this. Google and Apple control the digital stores that sell the majority of video games. And the commissions they receive from developers have a significant impact on the sector as a whole, according to Bloomberg Intelligence analyst Mandeep Singh. According to him, mobile game producers are “depending on Apple’s service decisions.”
In addition, mobile games have introduced a rapidly becoming conventional business model: free-to-play. While games are more affordable than ever, they rely on advertising more than ever to generate revenue. See Roblox Corp.’s involvement with advertisements and Unity Software Inc.’s recent $4.4 billion acquisition of mobile ad firm IronSource.
This is where things might become dangerous. If major tech or advertising companies falter, the gaming sector may also falter. This week, Microsoft, Apple, Amazon.com, Inc., and Alphabet appeared to coast through their earnings, indicating that the group is adept at navigating the challenging economic climate.
Next week will be the turn of gaming firms, so stay tuned.
How to Spend the Weekend?
Annapurna Interactive and BlueTwelve Studio’s new game Stray have everyone’s attention. Stray was developed in the south of France and released this month. Cats in a dystopian cyberpunk future are the natural focus of this story. Cats, too, are enamored: Cats’ reactions to Stray are being documented on a new Twitter account.
In Related News
Texas-based Aspyr Media has postponed the long-awaited remake of Star Wars: Knights of the Old Republic due to unforeseen circumstances. According to my coworker Jason, the game appears to be in significant jeopardy. With Sony’s full-scale entry into the PC gaming hardware market, the competition has never been fiercer.