NEW YORK (AP) Kathleen Byrnes and Justin Choi, a married couple attending medical school, say $40 is just too much to fork out for a Nintendo Wii game they may not enjoy. They haven’t bought one since last fall, when they picked up “Star Wars: The Force Unleashed.”
Since then? “Nothing really interesting came out,” said Byrnes, 23.
Their reluctance helps explain why this is a rough summer for the video-game business. More people than ever are playing the games, but it’s been a while since a blockbuster title arrived. Consumers are watching their money more closely in the recession and resisting games that cost as much as $60.
The trends came into play recently as Sony Corp. and Nintendo Co. each reported console sales are dropping. Sony posted a loss for the second quarter, while Nintendo Co. revealed a large profit drop.
The Microsoft Corp. division that makes the Xbox 360 said last month that it lost money in the last quarter, too.
“The health of the industry is terrible,” said Wedbush Morgan analyst Michael Pachter.
For gamers, at least, there’s some good news: Console prices may come down.
Despite the bad earnings results, Sony and Nintendo both reaffirmed their forecasts for the year. And Pachter thinks each company “has no prayer” of meeting the target without cutting prices.
At first, it didn’t seem the recession would be big trouble for the video-game business, which has managed to expand its audience in recent years. By many estimates, the industry is now larger than the music business.
Sony, Nintendo and Microsoft, as well as software publishers like Electronic Arts Inc. and retailers like GameStop Corp., have pitched video games as cheap entertainment. Players can get many more hours in front of a TV screen from a $60 video game than from a $25 DVD.
But people squeezed by the economy may not have even that to spend. Many have turned to online games that are cheaper or free. Even hardcore gamers are being more selective, and many are trading used games among themselves.