How the recession will affect PS3, Xbox 360, and Wii

Anyone not currently living under a rock will know that we’re slap bang in the middle of a huge global recession. The economies of almost every country in the world are on a downward spiral, with most experts agreeing the worst is yet to come. But will this downturn affect the games industry, and if so, will the PS3, Xbox 360, or Wii be the worst affected?

The games industry usually survives any recession or economic downturn very well, mainly due to gamers not changing their habits, and other people being drawn to gaming as an alternative to the expensive business of going out or even going on holiday. But with this recession expected by some to be headed towards turning into a full-blown depression, will the same ring true on this occasion?

Any of the big three that expects to continue selling consoles in the same amount as they have been needs their head examining. I think it’s clear the industry will suffer, along with the rest of retail, but maybe just not as much as other industries thanks to the already mentioned view that gaming is an affordable alternative to other, more expensive pastimes.

Gamers are likely to become more picky about the games they buy though. With less money in their pockets, I expect they will spend choosing particular games that will offer more than a few hours of playing time. This could spell disaster for developers putting crap onto the market in the hope that some of it sticks.

What about the individual consoles?

I think Sony has the most to fear, seeing as the PS3 is the most expensive console to buy. Sure, it may well offer more long-term thrills than the Wii, but parents especially will think only of the initial cost rather than value for money further down the line. If the Playstation 3 doesn’t get a price cut by the middle of next year, then I fear for the console’s long-term hopes.

Microsoft seems to have cut the price of the Xbox 360 just at the right time, coinciding with knowledge of the impending economic slowdown entering the mainstream. Many parents will see the Xbox 360 as a cheaper alternative to the PS3 this Christmas, but one which offers the same level of graphics and most of the same games.

While Nintendo may be sitting pretty at the moment, and are the most likely of the big three to be able to weather the storm financially, hardware and software sales could slide. The first group of gamers likely to stop spending their money on games and consoles are the casual fraternity, of which Nintendo is relying heavily this generation.

The games industry will undoubtedly prove to be recession-proof once again, but the economic slowdown will still alter the marketplace considerably. Depending on the decisions each manufacturer makes concerning console pricing and the like, any one of Nintendo, Sony, and Microsoft could find the recession very harmful to their business.

• Wii, PS3, Xbox 360 console prices could fall with U.S. economic recession
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• GDC 2009: The games industry faces up to the economic recession
• June NPD hardware sales – Recession hits Wii, Xbox 360, and PS3
• Game Industry in recession now – PS3, Xbox 360, Wii