Analysts: Recession to inhibit game innovation

DFC Intelligence panel suggests consumer spending may increase during recession, but game makers are more likely to stick with proven properties.

With Sony slashing jobs, EA slashing jobs, Midway slashing jobs, THQ slashing jobs, and on and on, it's difficult to believe that the global economic crisis is somehow passing over the gaming industry. The full extent of the economic meltdown won't be known for some time, but it's a question DFC Intelligence recently posed to a number of industry insiders and analysts.

David Perry, creator of the Earthworm Jim franchise and founder of GameInvestors and GameConsultants, believes that while the industry will slog through the current crisis along with everyone else, there exists potential for a significant upswing in years to come.

"Long term, there will be very little impact as we have a wonderful side effect in our industry. In down times, people stay at home and play more video games," said Perry. "Short term, we get strapped into the rollercoaster ride just like everyone else. Luckily our industry has a really good (long-term) trend going on."

Perry also believes that the current economic climate will continue to fuel the industry's move toward consolidation. He added that publishers will be eager to embrace digital distribution so they have instant and reliable sales data, as well as fewer middle-men taking a cut of the sale.

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