Editor's Note - Gaming Market Going Strong
Issue: Volume: 32 Issue: 5 (May 2009)

Editor's Note - Gaming Market Going Strong

Chief Editor

Nowadays when you turn on the television or radio, all you hear about is the state of the economy, particularly how bad it is. How will this situation affect industry trade shows this year? Will vendors opt for other, less-expensive methods to reach potential clients and partners? Will companies limit travel expenses, omitting conferences from their employees’ budgets?

I was sure that the latest economic crises in Detroit and on Wall Street would reflect negatively on trade-show attendance. So, imagine my surprise at the large crowd at the recent Game Developers Conference (GDC) in San Francisco (hardly one of the nation’s cheapest destinations). While this year’s attendance (more than 17,000) did not break last year’s record of 18,000-plus, it nevertheless shows that developers and those working in the game market are maintaining a positive outlook. And, with good reason. Many industry leaders in the entertainment sector have publicly noted that this segment of the market is practically recession-proof. At the beginning of the year, Tim Sarnoff, then president of Sony Pictures Imageworks (now president of Technicolor’s Digital Productions division), acknowledged that this has been the belief for years, but now there are many forms of entertainment available, so it’s difficult to say which ones will be affected by the economy and which will prosper.

That said, Hollywood is still going strong, with a number of potential blockbusters (which are not made on the cheap) nearing release, including Terminator Salvation (see “Shades of the Future,” pg. 18) and Star Trek (see “Back in Space,” pg. 30). Granted, those projects have been in production for a while, so the only real accurate gauge will come next year and the following year. But I have faith that the movies will continue to impress us with their cutting-edge digital effects and animation. “People always want to hear a good story or see a good movie—that is still the biggest bang for your buck,” Sarnoff says.

Another entertainment value? Video games. A price tag of $50 to $60 will get you hours and hours of play. According to NPD research group, December 2008 saw a nine percent increase in sales from the same month in 2007, helping to give 2008’s overall figures a 19 percent jump over 2007’s sales—and set a new record for total industry sales to boot. What kind of numbers are we looking at? The gaming industry reached $21.34 billion in 2008: $7.81 billion in hardware, $10.96 billion in software, and $2.57 billion in accessories.

And expect those figures to continue to rise throughout 2009. One reason is the growing popularity of the Nintendo Wii. Satoru Iwata, president of Nintendo, used his GDC keynote address to highlight new, expanded storage support for the system whereby users can download and launch content directly from an SD card. But the big news was the unveiling of the DSi, a new handheld platform that includes a camera and interactive functionality (see “Games & Graphics Unplugged” on pg. 26 for more about what’s on the horizon in terms of mobile gaming).

Will this groundswell in the gaming industry continue for this year’s E3? As you may recall, E3 turned into a gluttonous event for the gaming industry, with major software and hardware vendors dueling it out on the floor with huge, expensive booths packed with props, swag, scantily clad “booth babes,” and more (or less). Then, one vendor said “Enough,” and others eagerly followed, turning the event into a small, invite-only show. Well, this year E3 is gearing up for its big return to Los Angeles and the welcoming arms of those working in the gaming industry and those fan boys who will do just about anything to get through the doors.

After all, it’s really about fun and games. And business.