GamerNode: Columns - Game Industry Finally Feeling the Effects of the Recession

Game Industry Finally Feeling the Effects of the Recession

Over the past year, game journalists and everyday video game fans have argued whether or not the video game industry is recession-proof. Until just a few weeks ago, many people believed it was proving all the doubters wrong by staying afloat and not showing any major losses. Turns out it was really just a matter of time.

The evidence began to pile up approximately one month ago, when quarterly reports began to come out for Microsoft, Sony, and Nintendo. And the news wasn't good for any of the three console makers.

The Xbox 360 sold just 1.2 million units, down eight percent from the prior year, and it's lowest quarter since 2007. It's revenue had dropped 17 percent and profits 29 percent. Microsoft's game revenue from the Xbox 360 and PC were down 12 percent.

Sony didn't make it out any better. They posted a 31 percent drop in PlayStation 3 sales and PSP sales plummeted 64 percent. Its revenue dropped 10 perecent, while game sales across the PlayStation 3, PlayStation 2, and PSP fell a whopping 58 percent. Broken down that is a fall of 36 percent for PS3, 30 percent for PSP, and 56 percent for PS2.

Nintendo appeared to suffer most of all three. Its revenue dropped 40 percent, while profits freefell 60 percent. Wii sales fell 57 percent and sales for the DS dropped 14 percent.

It was then that people heard the first official claims of the industry being affected from a company, as Sony contributed its losses to the global economic recession. But the console makers' reports were just the tip of the iceberg for proof.

Electronic Arts posted a revenue decrease of 20 percent in their first-quarter report as losses increased by 41 percent. Sega Sammy had a sales drop of 19 percent and Ubisoft recorded a massive decrease of 51 percent.

Just this past week, Activision and Electronics Arts announced they would be making layoffs to subsidiaries Raven Software and Maxis, respectively. The releases at Raven have been rumored to be around 56, while there have been no estimates for the amount of employees gone from Maxis.

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