Not all of the retail sector is in the doldrums this holiday season. The FT reports today that the video game industry is doing quite fine, thank you very much:
US industry sales are up 25 per cent so far this year, according to the NPD research firm. Game sales in October rose 35 per cent on 2007’s total. The rises are in spite of a strong 2007.
“We’re forecasting it will be better than last year this holiday season,” said Edward Woo, analyst at Wedbush Morgan Securities.
The years of the Great Depression coincided with perhaps the height of the Golden Age of American cinema. Despite unemployment numbers that make today's recession look like small potatoes, millions of Americans were willing to spend what little disposable income they had on a night at the movies.
Perhaps the same phenomenon is at work today with video games, albeit on a much smaller scale. That Wii is just what some people need to get their minds off the financial crisis. So why aren't people flocking to movie theatres in greater numbers? Perhaps this is a perfect example of just how much video games have replaced the cinema as the pop culture go-to.
There's a lesson in this for people trying to run or start businesses: don't assume that consumers only want discounting and austerity. Yes, most luxury goods will be way down. But the demand for the right kind of escapism is only increasing.