T.G.I. Wasn’t a Transition Year

Some have remarked how resilient the game industry has been. Year on year, the industry did demonstrate double-digit growth in 2008, which is somewhat of an achievement given the economic turmoil the world has found itself in during the last 6 months or so. The question is “Why?”

I can point to two good reasons.

For one, the price of games is not terribly painful, especially given the high replay value for many of today’s games. Some games like Fallout 3 and Oblivion provide 80-100 hours of gameplay for your $60. That’s less than a $1 an hour. Movies are probably in the $5-7 an hour range (depending on your consumption habits), so that’s a pretty good deal for gamers. I think people inherently “get” this idea, so they continue to buy games.

But my first point relies on my second: fortunately for the industry, there are truckloads of consoles already in homes (almost 100 million according to wikipedia). People bought these consoles, and they want to enjoy them. Since Microsoft, Sony, and Nintendo released their current generation of consoles in 2005 and 2006, they’ve had a few years to build up an installed base of console owners – and the industry should be thankful that they did so. Imagine if 2008 was a year of transition! Things would have been real ugly. (To be clear, transition years are when new consoles are released and console manufacturers do their best to convince consumers to purchase the new system. They do this by launching big, super-awesome, platform-exclusive titles like Halo 3 or Super Mario Galaxy.)

Imagine if Sony tried to launch the $600 PS3 last fall! What a massacre. Even the Xbox 360 would have had a rough go of it in the $350-400 price range. A $60 game as a Christmas gift is palatable, but a $400 console amidst this economic downturn? No way Santa is dropping off many of those.

So despite a collective concern for 2009, for those in the industry, be thankful that there are millions and millions of consoles out there, hungry for more games!