Recession? What Recession?

Why video games are doing so much better than other forms of entertainment as we go from good times to, well, not-so-good times.

People may be buying fewer clothes, less furniture, and switching to generic brands, but they're not giving up their gaming. Economists seem to have reached a general consensus that we've entered a recession and, true to historical form, the entertainment industry seems to be feeding off it. The National Association of Theater Owners claims domestic box-office revenue actually increased during five of the last seven recession years since 1960. Ask many investment advisors and they'll tell you to bet on "sin stocks" during recessions: sales of booze, cigarettes, gambling products, and porn have all shown historical increases during hard times. Even, surprisingly, amusement parks seem to do better when things are worse. And this time around nothing seems to be any different...except perhaps exactly how extraordinarily well the video game industry is doing even compared to other entertainment sectors.

Compared to the first quarter of 2007, Six Flags saw a revenue increase of 35%, Disney's first quarter earnings per share were up 29%, and Playboy is projected to be up about 30%. Meanwhile, the gaming industry boasts the following stats for the same time period: Wii sales were up 178% compared to March of last year, Microsoft Games actually turned a profit for its second quarter in history, and Sony sold more PS3's in the first three months of this year than they did in the first six of last year. Meanwhile software sales were up 63% compared to March of last year and even system accessory sales increased nearly 60% versus a year ago. In fact, the Xbox 360 system sales were the industry's sob story...because sales "only" increased by about 30%. In other words, you're doing badly in the video game industry if you only do as well as the rest of the entertainment industry.

So why is this? I mean, we all know games rock, but are they really, in a manner of speaking, 100% better than rollercoasters, Mickey Mouse, and Jenna Jameson?

Well. Maybe.

First of all, software and hardware have a supply limit. If you want to ride a coaster, see a movie, download porn, or buy some cigarettes, you can be pretty sure you can do it whenever you want. Games and the consoles we play them on are different. If you don't get that game or system on release day, you might be out of luck for a loooong time. Nintendo might even be considering game's "gotta have it" quality economically important enough that they could be intentionally limiting Wii supplies - it's certainly why they release DS special editions. What this means is that unlike pretty much all other forms of entertainment, games' "caché" factor makes them additionally desirable...particularly when everyone has fewer dollars to spend on everything and owning something no one else has becomes even cooler.

Second, entertainment value for dollar is still higher for video games than just about any other form of entertainment. Every time congress investigates whether games are priced fairly (usually right after Christmas when they all had to buy games for their kids and decided they must be getting scammed), I want to remind them that a really good game works out on average to $2 an hour for entertainment. Don't get me started on games like Oblivion or Baldur's Gate II. Compare that to a $12-for-90-minutes movie (and it's 15¢-a-piece Gummi Bears) or a $90-for-30-seconds-coaster or a $6 magazine, and you start to see why people might actually be spending their money very, very wisely when they decide games are the one thing they want to keep when the economy starts to suffer.

Finally - and this one's subjective, I know - I would argue that of course games do better than other forms of entertainment during a recession because they're so much more immersive. If people spend more on entertainment during economic downturns than upswings, it's because they want to escape and that vacation is no longer an option. And what better way to tune out and turn off than running Mana Tombs or getting that RockBand together or planning that winning 2K play or tuning up your hot purple Viper for a run on Fujimi Kaido Down Hill?

I've been saying for years that games are clearly the dominant form of entertainment for the 21^st century. Anything movies, rollercoasters, or the Jenna's can do, games can already do better or will do better in the next few years. And here's just one more set of numbers to prove it.

Now if you'll excuse me, I have a midnight release of GTA IV to get to...

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