‘Recession proof’ gaming industry now struggling

by Kazuaki Nagata

Despite its reputation for being recession-proof, the domestic video game industry is having a tough time and first-half sales are looking weak, industry experts said Monday.

According to Enterbrain Inc., a Tokyo-based market researcher, industry sales, including software and hardware, totaled ¥181 billion for the five-month period from April to August. Last year from April to September, the figure was ¥238 billion.

“As a whole, even though we are missing one month, the numbers for hardware and software are rather disappointing,” Enterbrain President Hirokazu Hamamura told reporters at Foreign Correspondents’ Club of Japan.

This month, a version of “Pokemon” for the Nintendo DS and the debut of new PlayStation 3 are scheduled to take place, but it will still be difficult to achieve last year’s sales figures, Hamamura said.

The industry logged steady growth from fiscal 2004 to 2007, the year the industry scored its biggest sales in history.

But that dropped about 20 percent in 2008 as sales of the DS dropped drastically.

“I think we are seeing the same trend as 2008,” Hamamura said of this year’s progress.

Although the DS lost momentum last year, sales have actually been recovering with the release of the new DSi and the latest title in the “Dragon Quest” series, one of the most popular role-playing titles in Japan. Consoles and other hand-held devices, meanwhile, are not selling well.

Hiroshi Kamide, associate director of research department at KBC Securities Japan, said the recession has reduced the salaries of people in their mid-30s.

“Things here are pretty tough,” Kamide said, adding the industry’s core video game players are people aged up to 35.

As the industry struggles to find ways of increasing sales, hopes are high for the release of “Final Fantasy XIII,” a well-made game that is expected to boost sales of the PS3, Hamamura of Enterbrain said.