A few days ago, analysts released a statement saying the lending crisis and general lowering of the economy won't have a negative effect on the video game industry. Lazard Capital Markets' Colin Sebastian talked about the "cocooning" effect, and I'd like to elaborate on that, here.

It's just common sense. When an economy isn't doing so hot, people tend to stay home more often. Throw in the elevated gas prices and when the weekend rolls around and things are tight, most individuals and families will consider: "well, I could go out…and pay for gas, food, and entertainment, or…" Or, he or she could simply toss in a game and get an evening's entertainment out of that. Now, I'm not saying everyone should just stay home all the time and play games (I know I'll get the catcalls if I say that, ironically from the people who actually do stay home and play games all the time). But when normal people begin to tighten their belts, the very first things to go are luxuries, and that includes eating out and partaking of expensive entertainment outside the home. But even a brand new next-gen game only costs $60, which can offer anywhere between 5 (at the very low end) to 20, 30, 40, or even hundreds of hours of entertainment. Using simple math, anyone can see that a DVD or Blu-Ray movie is far costlier.

In addition, you should probably see book sales rise, and Internet traffic should be up, too. The bottom line is simple, and quite obvious. Granted, the consoles can still be a pricey endeavor in an ailing economy, but again, in the long run…well, they're one hell of an investment. Many years and hundreds upon hundreds of hours of entertainment for a few hundred dollars? Few entertainment industries offer this kind of cost-effective option, as indicated by those aforementioned analysts. Sure, sales may not be through the roof as they would be in a strong economy, but they sure as hell won't suffer the way other industries might. So if you're wondering why GameStop is one of the few stores in the mall that has scores of customers these days (geez, Abercrombie & Fitch is deserted!), just think for a few minutes. The answer is clear.

Subscribe
Notify of
20 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Branko2166
Branko2166
12 years ago

Doubt the financial crunch will impact the gaming industry too much. People are still crazy about gaming and that's what counts 🙂

Troy Powers
Troy Powers
12 years ago

Well, when you put it like that, I guess I will spend $240 on games this month. In the long run, it's cheaper than going out. 🙂

Hmmmm…but I can go out downtown with friends on a Friday night, spend a few bucks on gas, five bucks for parking, go to a club or bar with no cover (yes, there are plenty of those in Cleveland), only drink water, party for a few hours and maybe even get laid…and spend 10 bucks tops.

So, for the price of a game, I could do that 6 times. I'm sure I'd score at least one of those times.

Then again, I could spend that $60 on Rock Band 2, and have the party at my house. No money spent on gas or parking, and I can get drunk and possibly laid without having to drive.

Decisions, decisions…

Ben Dutka PSXE
Ben Dutka PSXE
12 years ago

Most people don't spend so little when they go out (only young people with not much money), and furthermore, you're only talking about yourself. What couples and families that have to pay a lot more when they go out? I'm talking about $60, not $240. Who says you have to buy 4 games? Do you have any idea how many hours people have logged online with just one game? 😉


Last edited by Ben Dutka PSXE on 10/3/2008 2:26:39 PM

Aftab
Aftab
12 years ago

Troy, I don't care if you be the Don Juan of Cleveland, but taking out the ladies definitely will cost you more. First of all, no lady is gonna sleep with you first time meeting at a club, no matter how good you are, without some kind of intoxicants involved. Those alone, will cost you more than $10.

m2tbo
m2tbo
12 years ago

LOL @ Troy Powers

I'll drop $40 at the bar easily, but I rarely buy new games at $60. Maybe I should re-think my priorities hmm…games or friends, games or friends…I wish I only had to work 3 days a week.

photo K
photo K
12 years ago

3 days a work?

trudat. Everyone's different, but I stay home on fridays now instead of wasting over an hour in traffic to get to a restaurant and pay $30 for a meal. You miss out on good times out, but we all make sacrifices and the gaming industry may benefit from it. Or maybe people are addicted to games like us and would rather give up other luxuries before making videogame budgetcuts.

photo K
photo K
12 years ago

honestly i'd rather give up my car first than give up my playstations. sick but true.

LegendaryWolfeh
LegendaryWolfeh
12 years ago

3 days a week =O amazing, i work 3 days a week, given the fact that it's friday saturday and sunday = lol give or take relationship with work XD

www
www
12 years ago

Well i don't see no families sittin at home n playin games in this part of the world,adults above 30 don't even touch console power buttons only a few, u could count'em.
Over here is tv shows luv a laggin economy,n the channels r only bout 3-4,people open there eyes wide open n gaze all day by the time they done a year has gone by.

Aftab
Aftab
12 years ago

Ay Ghana Bwai, do you have to pay duty on top of the retail price of consoles and games?

www
www
12 years ago

Ay Aftab,yes u do pay.

Aftab
Aftab
12 years ago

Man, that ish must get real expensive.

Cuetes
Cuetes
12 years ago

Im 26 with a wife and two kids, going out for us means at least $100 out of my pocket. I'd rather spend 60 and get countless hours of fun. I got 4 controllers so nobody gets left out.

WaR_HaWk
WaR_HaWk
12 years ago

Im 16 and wen i go to movies with my GF i usually spend 50-60$. gaming is much cheaper

Aftab
Aftab
12 years ago

Tip, go for a meal before hand, if you can't sneak the snacks in. You'll save 20-30 bucks that way.

WaR_HaWk
WaR_HaWk
12 years ago

LOL. the snacks r super overproced in movies. freakin coke is 4$

WorldEndsWithMe
WorldEndsWithMe
12 years ago

Maybe I should call my guy and put some money in the gaming stocks.

Alienange
Alienange
12 years ago

If people start cocooning then I'm guessing there's going to be a lot of frustrated Wii owners. Stuck in the house with only a Wii? Ouch.

JPBooch
JPBooch
12 years ago

You can add the likes of Netflix and Blockbuster to bear the fruit of the economy too. There are more people who don't play games than do. I'm 36, half of my friends my age don't play games anymore and none of my friends over the age of 40 play on any serious gaming consoles(PS3 or 360). Those friends who don't like gaming, love movies. The best way is to rent them, way more bang for your buck.

Ben Dutka PSXE
Ben Dutka PSXE
12 years ago

I'm well aware of that, and I didn't mean to imply that games would "replace" going out. The point is, when things are tight, many people CAN'T go out. Games are a great substitute in such times, not a voluntary replacement.