While a rising tide floats all boats, a receding one leaves some vessels higher up the beach than others. Conventional wisdom says that a recession doesn't hurt the entertainment world as hard as other sectors, but recent events have confirmed that the steep drop in consumer spending has finally caught up with the videogame industry. So what does that bode for 2009 when it comes to Mac, iPod and iPhone gaming?
As I noted in a previous column, major Mac game publishers including Aspyr Media and MacSoft have significantly slowed down their output on the platform, although they have continued to focus on PC and console gaming. Feral Interactive has picked up some of the slack, and Cider developer TransGaming has stepped into the breach through its digital distribution arm, GameTree Online, with a promise of more to come in 2009, but many high-profile games and expansion packs remain absent from the Mac.
Aspyr Media has also announced layoffs, joining Electronic Arts and Midway in making such moves, according to Macworld. In a review of recent quarterly earnings reports from publicly traded videogame companies, I noticed that THQ has also laid off employees (approximately 250, according to CEO Brian Farrell), and many companies, including Electronic Arts, said they plan to reduce their output in the coming months.
In addition, Take-Two Interactive Chairman Strauss Zelnick echoed many of his peers when he said this last week: "Broad softness at retail has and probably will continue to have an impact on our industry. This softness has affected many of our peers and we too are experiencing lower than expected overall holiday sales." During the same conference call, he added: "We've significantly reduced our expectations [for the next 12 months]."
That said, the videogame business still expects to be left higher up the beach than other industries that sell discretionary products. Retailer GameStop, for example, said last month that it expects to open over 600 stores next year as it "continue[s] to capitalize on this growing industry," although it isn't hiring anywhere other than in its stores.
GameStop's forecast is supported by a recent Reuters article about NPD's latest report, which said that sales of videogame hardware and software rose 10 percent year-over-year in November. NPD analyst Anita Frazier cited "a blistering sales pace."
The reason why may have been revealed during Activision Blizzard's quarterly earnings call last month, when CEO Mike Griffith said: "Cost per hour of entertainment of video games provides a great return on investment for the consumer as they seek value. To illustrate this, last month NPD conducted a holiday shopping survey that found for most shopping categories consumers intent to purchase were flat or slightly lower than 2007. The most notable exception again was video gaming systems and games, where consumers' intent to purchase rose 7 points over the prior year, putting video games in the top five holiday purchases for the first time ever."
Next Stop: iPhone?
While Mac gaming remains moribund, and will likely stay that way in the face of a weak economy, game playing on the iPod and iPhone has begun to take off. Apple added half a dozen clickwheel iPod games to its stable during the past two weeks, and the App Store has seen a surge in game releases, no doubt helped in part by Apple's decision to highlight gaming in their latest iPod touch commercial.
On December 8, Take-Two CEO Ben Feder noted: "We're also seeing emerging opportunities with the iPhone." In addition, John Geleynse, Apple's Director of Technology Evangelism, was overheard, according to Engadget, saying this about the iPhone: "It's not a phone, it's a console experience."
It's obvious that clickwheel iPod gaming is destined to remain a niche market, no matter how many games Apple puts out (in typical fashion, the company is tight-lipped about those plans), but it's equally clear that iPhone and iPod touch gaming could explode, as I found in a column published last month. The economy could hamper that area too, particularly if Apple's hardware sales become stagnant, but with App Store games staying at or under the US$9.99 price point and most of the major publishers releasing titles there, it's easy to see how someone who's strapped for cash might bypass the latest $50 or $60 console videogame in favor of two or three iPhone releases.
So what are you looking for this holiday season? Are you looking to stock up on Mac games, visit the App Store, or turn your attention to the Windows and console worlds? Or have games dropped far down the priority list this year? Whatever your situation, I hope you have a happy, healthy holiday season, and I'll see you in January. Perhaps Macworld Expo will reveal some intriguing game news, whether it's on the Mac, iPod, or iPhone.