Recession: Game Industry Balance Concerned – 08/16/2022 – 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 that it will not be unscathed by the weather, reviving an old debate: Will the games market be recession-proof after all?

The reputation that gaming companies would be virtually immune to financial crises was strengthened in the second half of the 1990s and early 2000s, when the sector was going through a phase of rapid growth and seemed to suffer little during periods of economic turmoil.

In a Gameindustry.biz article, researcher Rob Fahey points to two main factors behind this phenomenon:

  • Rapid growth of the user community during that period. Kids who started playing video games in the late 1980s and early 1990s grew up and continued playing into their teens and early adulthood—helped by a maturing industry that began making games for that audience as more kids entered that consumer market. .

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

However, he says, recent changes have significantly reduced the protection of these two mattresses:

  • Although the gaming market continues to grow, The rhythm is not the same anymore. Additionally, one of the areas where expansion is strongest, mobile gaming, has historically been undervalued and often undervalued by traditional companies in the sector, although this scenario is changing.

  • Additionally, companies are increasingly betting on microtransactions and expansion packs that require Players continue to spend even after their first purchase. So some may no longer see video games as such cheap entertainment.

The lackluster numbers released by the industry in recent weeks can be seen as a sign that the protection the sector had during the crisis is no longer 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.

From April to June of this year, Nintendo saw a 23% decline in console sales and an 8.6% decline in game sales compared to the same period last year. Microsoft had only slightly better numbers, with hardware sales down 11% and software sales down 6%.

Sony has already reported a 4% increase in PlayStation 5 sales, but that’s where the good news ends. Sales of PS4 and PS5 games fell 26% from last year, sending the company’s game revenue down 2% and lowering expectations for the rest of the year.

And they weren’t the only ones. Capcom (of the “Resident Evil” and “Street Fighter” series) had a 50% drop in sales; Square Enix (of “Final Fantasy”), down 15.5%, and Take-Two (of the “GTA” series), making its first report since acquiring Zynga, showed a 28% drop in sales in fiscal in the first quarter of the year. Compared to the sum of the results of the two companies in the same period of 2021.

However, negative numbers are seen by companies as a result of one-off and temporary problems rather than the beginning of a long-term crisis. Many of them point out, for example, the unfair comparison of the 2022 numbers with the 2021 figures, when the gaming sector was again positively affected by the increase in sales during the lockdown period.

“Overall gaming market growth slowed as the ability for consumers to leave their homes increased due to a decline in new coronavirus infections in key markets,” Sony said in its financial report, pointing to a 15% drop. Consumers spend time on PlayStation consoles.

Meanwhile, Nintendo attributed its results to international logistics crises and semiconductor chip shortages.

Independent analysts also highlighted the lack of major launches during that period. “The mid-year hiatus for video game releases is unfortunate, and a large part of it is due to bad luck. Game development delays due to the pandemic didn’t help. […] And many publishers are waiting until their new games are released,” said video game market analyst and consultant Sam Nagy in an article for Gamesindustry.biz.

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

In general, the situation in the gaming sector can be summarized by the analysis of the consulting company Newzoo. The company identified a slowdown in the market and lowered expectations for 2022, but still estimates 2% growth in the overall gaming industry.

If the predictions are correct, we shouldn’t see massive layoffs at studios or cancellations of new games due to lack of funds in the coming months. However, it seems clear that the days of blue skies and calm seas are in the past.


game

Game tip, new or old, for you to check out

portal

(computer and switch)

“Portal”, released in 2007, 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 produces interdimensional portals to reach the end of a maze sequence. The premise is simple, but the physics challenges in the title require the player to think “outside the box” to find solutions. That alone would be nice, but the game still has a fantastic sci-fi story and a lot of fun dialogue. Originally released for PC, the game was recently released for Switch in a bundle that includes “Portal 2”, which is as good a sequel as the debut title.


Update

News, launches, business and other things that matter

  • 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 website Adrenaline. The demonstration came after PlayStation owners took a stand against Microsoft’s acquisition of Activision Blizzard, arguing that the “Call of Duty” series is too important a product for its rival to be exclusive.
  • The open-world game “Hogwarts Legacy”, based on the world of Harry Potter, has been delayed. Originally scheduled for later this year, the game is only set to release on February 10, 2023 for PC and PlayStation and Xbox consoles. Post on TwitterThe team responsible for the game said it “needed a little more time to deliver the best possible experience”.
  • The release of the tactical RPG “Marvel’s Midnight Suns” has been delayed for the second time. The game developed by Firaxis Games (from the “Civilization” and “XCOM” series), which was originally expected to be released in March of this year, should not reach the public until February or March of next year.
  • Square Enix has announced that its London studio is developing a new mobile game based on the Nickelodeon series “Avatar: The Legend of Aang.” The game will be called “Avatar: Generations” and according to the company 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 tracker.gg. Slated for release later this year, the game will be free-to-play and will have versions for PC and Xbox and PlayStation consoles.

Download

Games coming out in the coming days and promotions that are worth it

August 15

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

August 16

“Roledrome”: Price not available (PC, PS 4/5)

August 17

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

August 18

“Cursed to Golf”: BRL 37.99 (Switch), price not available (PC, Xbox One/X/S, PS 4/5)

“we are good”: BRL 34.19 (Switch), price not available (PC, PS 4/5)

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

“Thymesia”: Price not available (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)

Promotion of the week

Humble Bundle started promoting games from the “Resident Evil” series. The price of the set ranges from US$1 (R$5) for the simplest with 3 games, to US$30 (R$150) for a complete package of 10 games, including the remakes of “Resident Evil 2”. and “Resident Evil 3” and a 50% off coupon for “Resident Evil Village,” the latest title in the series. Part of the proceeds will be donated to charitable institutions. The offer is valid until August 24.


question of the week

What came out about games in Folha

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