Recession: Gaming Industry Balance Sheets Concern – 16/08/2022 – Market

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The dark clouds of recession are closing in on the United States and Europe, and the games industry is showing signs of weathering it, reviving an old debate: Can the games market finally survive the recession?

In the second half of the 1990s and early 2000s, gaming companies gained a reputation for being virtually immune to financial crises, when the sector went through a phase of rapid growth and seemed to suffer little during periods of economic turmoil.

In an article for Gameindustry.biz, researcher Rob Fahey points out two main factors for this phenomenon:

  • rapid growth of the consumer community during the period. Children who started playing video games in the late 1980s and early 1990s grew up and continued playing into their teenage years and early adulthood—helped by a maturing industry that made games as more and more children entered this audience. .

  • Video games are a relatively inexpensive form of entertainment. Even in times of crisis and unemployment, people are looking for forms of recreation. In the case of games, for the price of a family dinner (or less), you can buy a game and have dozens of hours of fun.

However, he says, recent changes have significantly reduced these two protective pads:

  • Although the gaming market is still growing, the rhythm is not the same. Additionally, one of the strongest areas for expansion is mobile gaming, which has historically been undervalued by traditional companies in the industry, and is often seen as undervalued, although this scenario is changing.

  • In addition, companies are betting more on microtransactions and expansion packs, which is demanding players continue to spend even after their first purchase. So some may not see video games as such cheap entertainment options.

The uninspiring figures released by the industry in recent weeks can be seen as a sign that the sector’s crisis protection is not really there.

Today’s top three console makers, Nintendo, Sony and Microsoft, reported lower-than-expected results in their gaming divisions, with sales of their core products falling sharply.

Between April and June of this year, Nintendo saw a 23% decrease in console sales and an 8.6% decrease in game sales compared to the same period last year. Microsoft’s performance was slightly better, with hardware sales down 11% and software sales down 6%.

Sony previously announced a 4% increase in PlayStation 5 sales, but that’s where the good news ends. Sales of PS4 and PS5 games fell 26% year-over-year, resulting in a 2% drop in the company’s gaming revenue and lower expectations for the rest of the year.

And they weren’t alone. Capcom (from the “Resident Evil” and “Street Fighter” series) sales fell by 50%; Square Enix (of “Final Fantasy”) fell 15.5%, and Take-Two (of “GTA” series), making its first report since being acquired by Zynga, reported a 28% drop in sales for the first quarter of its fiscal year. Compared to the sum of the results of the two companies for the same period in 2021.

But negative numbers are seen by companies as the result of one-time and temporary problems rather than the beginning of a long-term crisis. Many of them, for example, point to an unfair comparison of the 2022 numbers to 2021, when the games sector still had a positive impact on sales growth during the lockdown.

“Overall growth in the gaming market has slowed as consumers are more likely to step out of the house due to a decline in new coronavirus infections in key markets,” Sony said in its financial report, pointing to a 15% decline. time users spend on PlayStation consoles.

And Nintendo attributed its results to the aftermath of an international logistics crisis and a shortage of semiconductor chips.

Independent analysts also highlighted the lack of major launches during the period. “The mid-year lull in video game releases is unfortunate, and a lot of it is the result of bad luck. The disruption to game development due to the pandemic didn’t help. […] and many publishers are waiting for the release of their new games,” said video game market analyst and consultant Sam Naji in an article for Gamesindustry.biz.

The argument makes sense. Bandai Namco, the distributor of “Elden Ring,” one of several big releases until 2022, was one of the market leaders when it posted a 54.5% increase in game sales in the last quarter.

In general, the state of the games sector can be summarized by the analysis of the Newzoo consultancy. The company identified a slowdown in the market and lowered its expectations for 2022, but still sees 2% growth in the games industry as a whole.

If the predictions are correct, we shouldn’t see mass layoffs of studio employees or new games being canceled due to lack of money in the coming months. However, it is clear that the days of blue skies and calm seas are in the past.


to play

New or old, game tips for you to try

Portal

(Computer and translation)

Released in 2007, “Portal” can already be considered a classic. Valve’s game is a first-person 3D action puzzle game in which the player must use a weapon that releases interdimensional portals to reach the end of a maze sequence. The premise is simple, but the physical challenges presented in the title require the player to think “outside the box” to find solutions. That alone would be fine, but the game still tells a fantastic fantasy story and plenty of interesting dialogue. Originally released for PC, the game was recently released for Switch with a bundle that included “Portal 2”, a sequel that is just as good as its debut title.


update

news, launches, business and other important things

  • In a document sent to Cade, Microsoft’s lawyers in Brazil accused Sony of paying developers not to put their games on Xbox Game Pass, according to the website Adrenaline. The demonstration comes after PlayStation owners protested Microsoft’s purchase of Activision Blizzard, arguing that the “Call of Duty” series was too important a product for a rival to own.
  • Hogwarts Legacy, an open-world game based on the Harry Potter universe, has been delayed. Originally scheduled for later this year, the game should arrive on PC and PlayStation and Xbox consoles only on February 10, 2023. post on twitterThe team responsible for the game said that it “needs some more time to deliver the best possible experience.”
  • Tactical RPG Marvel’s Midnight Suns has been delayed for a second time. Developed by Firaxis Games (from the “Civilization” and “XCOM” series), the game, originally expected to be released in March of this year, should reach the public only in February or March of next year.
  • London studio Square Enix has announced that it is developing a new mobile game based on the Nickelodeon series Avatar: The Legend of Aang. The game is called “Avatar: Generations” and according to the company, it will be a free-to-play adventure RPG with tactical battles. There is no planned release date.
  • Still in beta, Warner’s character fighting game “MultiVersus” hit the 10 million player mark last week, according to website Traker.gg. Scheduled for release later this year, the game will be free-to-play and will have versions for PC, Xbox and PlayStation consoles.

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upcoming games and promotions worth it

August 15

“MultiVersus”: free (PC, Xbox One/X/S, PS 4/5)

August 16

“Rollerdrome”: No cost (PC, PS 4/5)

August 17

“Kirby’s Dream Buffet”: BRL 77 (Conversion)

August 18

“The Curse of Golf”: BRL 37.99 (Transfer), no price (PC, Xbox One/X/S, PS 4/5)

“We are OFK”: BRL 34.19 (Transfer), no price (PC, PS 4/5)

“RPG Time: The Legend of Wright”: BRL 143 (Translation)

“Thimesia”: no cost (PC, Xbox One/X/S, PS 4/5)

August 19

Madden NFL 23: R$249 (PC), R$299 (Xbox One and PS 4), R$339 (Xbox X/S and PS 5)

Advertisement of the week

Humble Bundle has started promoting games in the “Resident Evil” series. Kits cost from US$1 (R$5) for the most basic 3 games, to US$30 (R$150) for a complete package of 10 games, including the Resident Evil 2 remake. and “Resident Evil 3,” and a 50% off coupon for “Resident Evil Village,” the latest title in the series. Part of the collected money will be donated to charitable institutions. The promotion is valid until August 24.


readings of the week

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