The Games Industry Rocks 2007
Ok, so the sales data is out for 2007, and it’s freaking awesome!
The games industry in the US recorded a whopping 43% increase year over year from 2006 (admittedly a bit of a sideways year) and 2007. And - even more encouraging - the increase was felt across both hardware and software, boosting the industry overall in a slumping economy.
I remember that when I took my first games industry job, I had a lengthy conversation with my then bosses about how we seem to defy economic logic, posting revenue increases when the economy goes down (and even when it seems to be skyrocketing). What is it about games that makes them free of the usual economic constraints? Some theories:
- Games are a better value than other kinds of media, giving consumers significantly more hours of gameplay per dollar than any other category.
- Games are ascendant, grabbing users from all other kinds of media (and the concomitant advertising dollars), and this is independent of the macro-economic cycle. Put another way, this is a major, 20,30 or 50 year long cycle of growth that we’ve only recently begun.
- The “Games Industry” is very broad. Unusually, our industry includes hardware, software, services and B2B products (like advertising, developer platforms, etc), so it’s really more like 3 or 4 different verticals all lumped together (casual game download sales and movie licensing revenues have very little in common).
- Console wars are the equivalent of a major stimulus package. With billions of dollars at stake, console manufacturers and their software partners pump a ton of cash into the game economy to ensure the success of their new ventures, effectively greasing the wheels of the category.
I’d love to hear your thoughts! Dean Takahashi has a good take on the issue (from the “why 2007″ perspective).
And the best part about all of it: these figures don’t even take into consideration the extraordinary growth being seen in new verticals (e.g. casual MMOs) or international markets. In short, perhaps, the best is still yet to come. Here’s to an even better 2008 - led by Funware enthusiasm, no doubt.
Oh, and as a small aside. 2 years ago at E3, Cal Morrell and I had a little wager. I said the Wii would win this round of the console wars. He said “no freakin way”. Apparently, we’re both a smidge right, although his prediction that it would be the PS3 was certainly off. The Wii handily outsold in terms of total units, but the XBox was the cash king in 07. My further prediction: the Wii continues to grow its unit lead this year. Care to double down, Cal? 