Video Games a $45 Billion Industry on a Path to the Top

With the economy still posting its struggles some sectors continue to thrive and one that has huge growth potential is the video gaming industry. The recession has affected the video gaming industry in some unexpected ways. Despite stocks within the sector falling earlier this year due to the collapse in markets video games sales have gone up. Yes according to the Nielsen ratings more consumers are buying video games and playing them longer. Of course the industry itself is down due to the economic disaster however on any level this is positive news. According to the study 42% of gamers have increased their playing time, 35% have spend more money on gaming, and 39% say they’ll spend the same amount in 2009. Gamers are under the same spending pressures every other consumer in America is under and it seems they are trying to get more bang for their buck. With the increased playing time it shows the desire for gamers to get more value out of new line games. Another huge sector for growth within Video games is the purchasing of used-games. Used video game sales are up 50% in 09’. That will help retailers like GameStop who have saw used video game sales jump 32% in the first quarter. I personally think video games sales as a robust industry with high ceilings for potential and growth. I actually think it will soon become the largest entertainment medium in the world and this is why:

- Video Games sales in have increased more than 50% in the past 5 years, whereas Music Sales have fallen 12% and Movie Tickets Sales 6%

- Video Games are more popular than Cinema now; Past 6 months 63% of Americans have played a Video Game whereas 53% have seen a movie

- Video Games Spending has become 8% of teenager’s budgets, up from 3% five years ago.

- 89% of Teenagers now own at least one video game console, 59% own two.

- The emergence of the Wii has created a plethora of girl gamers and younger gamers, a market that use to be untapped.

- It has poised to become a $45 billion industry Worldwide in 2009 near double what Music Sales are

I foresee Video Games only getting stronger in the 2^nd half of 2009 with the release of big-name titles and the potential price cuts for consoles. This should spur a significant rebound in overall sales, which are struggling since 2008 when the market collapsed. Throughout the remainder of the year we will see the release of major franchise such as Halo, Call of Duty, the Beatles Rock Band, Madden, Left 4 Dead, and Assassins Creed, which should give a much-needed boost to the industry.  Leading into the Christmas shopping season, retailers and video games always become a hot commodity. Plus the cuts in console prices should also help boost market share in return leading to higher software sales. On the path to the world’s entertainment leader this minor slip-up we have seen in the past year will do nothing to slow up the industry long-term.