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Just as industry anticipation going into the biggest and best time of year in terms of sales for the gaming industry, comes word that not even video games may escape the global economic crunch. Not that the surprising news seems to be slowing things down none. As a new feature in this month’s Lucid Gaming column, I’ve included a Sales Chart for both hardware and software.
In the News
Economic slump hits gaming industry
Signs that the economic slowdown affecting US and world markets has reached as far as the video game industry became evident last week when Electronic Arts said that they’re cutting jobs in order to cushion slumping game sales. According to EA, retail sales of its games have slowed down in October, which so far has been the worst month of the crisis so far. The company lowered its profit forecast for the all-important holiday season and said it planned to cut its workforce by about six per cent, translating somewhere between 500 and 600 jobs. EA says that this measure could save them $50 million a year in expenses.
"Considering the slowdown at retail we’ve seen in October, we are cautious in the short term," Chief Executive John Riccitiello said in a statement. "Longer term, we are very bullish on the game sector overall and on EA in particular."
This was surprising news for a couple of reasons. One, many analysts expected entertainment industries to be immune from the slump as people tend to stick close to home for their entertaining needs in rough economic times. Secondly, EA is one of the pre-eminent game studios, with titles including blockbuster franchises like Call of Duty, Madden NFL and Rock Band. Shares of EA fell 17.1 percent to $22.99 in afternoon trading on the Nasdaq Friday. Meanwhile, rival game maker Activision Blizzard Inc saw its shares decline 2.8 per cent to $12.36. Shares of THQ Inc also slippedby 1.5 percent to $7.45 per share.
Fab Four coming to a console near you
Their songs haven’t been a part of any Guitar Hero or Rock Star game yet, but it looks like the Beatles are skipping all that and doing a game of their own. Apple Corps, the company that owns the Beatles catalog, announced last week that they were lending their support in developing a stand-alone game for the Lads from Liverpool rather than the often rumoured Beatles Rock Band add-on pack. "This game will take you on a journey from the Beatles' first album Please Please Me until the last album at Abbey Road," Jeff Jones, CEO of the Beatles' Apple Corps label, announced in a conference call yesterday. "It will span samples of the whole catalogue all the way through." The project is a collaboration between Apple Corps, as well as Rock Band developers MTV and Harmonix. The surviving members of the Beatles, Paul McCartney and Ringo Starr, will be involved in the game's creative planning, as will Beatles widows Yoko Ono and Olivia Harrison.
Video Game law under review in California
A three-judge panel in California is reviewing arguments over whether or not to uphold a 2005 law in California that restricts the sale and rental of overly violent video games to children under the age of 18 without parental consent. The state law, which prohibits the sale or rental of the games to anyone under 18 and requires them to be clearly labeled, was struck down last year by a lower court. Video game manufacturers argued that it violates minors' First Amendment rights.
California Deputy Attorney General Zackery Morazzini asked the 9th U.S. Circuit Court of Appeals to uphold the law, saying violent games are just as obscene as the sexually explicit material limited from children by the U.S. Supreme Court. Meanwhile, the Video Software Dealers Association and Entertainment Software Association are arguing that upholding this law opens the door to banning other types of materials under the argument that it’s to protect the children. "Maybe a state will say we shouldn't let you sell, without a parent's permission, books about homosexuality or sex education or birth control," Paul Smith, the industry's attorney, told reporters after the hearing. "I think it's a very scary prospect."
From the tenor of the hearing, it appeared that the judges were leaning to agreement, saying that upholding California's law would mark an expansion of federally regulated materials and could open the door to other restrictions by state legislatures. "Aren't you asking this court to go where no court has gone before?" Appellate Judge Consuelo Callahan asked Morazzini. "Is there anything out of limits for the Legislature to prohibit to minors?" Judge Alex Kozinski said. "What about games where people eat unhealthy foods and get fat?"
A ruling is expected from the panel in the next couple of months.