Video Games—An Economic Barometer?
I have a friend who used to work for one of the major ice cream companies that distribute to stores around the country. He told me that ice cream sales are a great indicator of the state of the economy. During a good economy, ice cream sales go down. However, as people become concerned about recessions or downturns in the economy, ice cream sales go up. His theory was that when people have money to spend, they tend to eat out more and have either healthier or more expensive treats for dessert. However, as the economy heads south, people stay at home and eat more ice cream either because it is a cheaper form of treat or in order to cheer themselves up. Nothing helps raise a person out of mental depression than a big spoon and a half-gallon of rocky road (which by the way given its name during the Great Depression to help cheer people up).
During economic hard times, people want to be able to escape from their daily troubles and worries. U.S. history provides great examples of this. During the Great Depression (1929-1939), Americans flocked to the cinemas to watch movies on a regular basis. Sporting events also remained popular such as baseball games and boxing matches. People want to be able to immerse themselves in something and forget about their real lives—even if for only a few hours. Many movie classics were released during this period including Gone with the Wind, The Wizard of Oz, and the first full-length animated feature—Walt Disney’s Snow White. It was during this time that Shirley Temple captured the heart of America and actors such as Clark Cable and Katherine Hepburn became larger than life stars.
As the United States, and likely the rest of the world, enter a current recession or depression (depending on which economists you listen to), Americans are spending less money. Some businesses are going under. However, video games sales for November 2008 were up 10% from the same period in 2007. For many this was unexpected news. However, video games are the new escape for people. As adults continue to make up a considerable fraction of video game players, especially those with the money to purchase systems and games, video games provide a cost effective form of entertainment. For the price of six movie tickets, a person can buy the latest and greatest game which will provide many more hours of interactive, immersive escape from reality. People facing cutbacks or at least not receiving year end bonuses or raises can take out their aggression against zombies that might look similar to their bosses or by defeating other players online.
Now back to the title of this blog. Are video games a good bellwether of the economy? Probably not. Video games will continue to sell well during both good and bad financial times as long as the industry puts out quality products. However, it is interesting that while Americans are cutting back on their spending in other areas, video games remain an area where they continue to exercise their somewhat diminished purchasing power.
So cheer up and get lost in a video game. Have a Merry Christmas and Happy Holidays!
I have always been interested in this sort of stuff, thanks for writing it!
The video game industry is pretty much always strong no matter which way the economy is going. It’s almost recession proof.
I have always been interested in this sort of stuff, thanks for writing it!