Summary
This article is just the first warning of an overall problem int he video game industry. The economic slowdown has made it more difficult for video game publishers to finance development of new titles. Many publishers are cutting back on the number of titles they are publishing, which will mean fewer games being released this fall and well into 2010. Fewer game titles will mean less choice for consumers.
Analysis
Although the video game industry showed strong growth in 2008 it was not immune to the overall economic slowdown. Tight credit markets have limited the number of new game titles publishers are able to put into development causing a shake out in many publishers like EA who plans to shed more than 10% of its work force. While many feel that there was a glut of game titles in 2008 the pendulum seems to be swinging the other direction for 2009 and 2010 with fewer and fewer game titles in development.
The real casualty of the slowdown in game development will be creativity as publishers will stick with known game franchises and are much less likely to take chances on innovative new game ideas. As creativity and new game experiences are important to the long term growth of the industry, There will likely be a negative ripple effect that will likely be most noticeable in early to mid 2010.
Video games are usually in development for one or more years. Fewer video game starts now mean fewer titles in the coming year because there will be fewer video games in the pipeline likely leading to an overall industry slowdown next year.
A good indiction of the growth of the video game industry is the amount of money being spent on new game development. It is difficult to know for certain the fall off in development spending is but indications from developers are that fewer titles are in development than last year and development budgets are not as rich as in years past.
