"The DS Has Peaked In Japan"

Gloom and doom! Those living in the US are starting to feel (or maybe, totally feeling) the effects of a downward economy. How will it affect gaming? According to analyst Hiroshi Kamide at KBC Securities Japan, "A recessionary environment is negative for the electronic entertainment industry, but we believe the core gaming market to be more resilient than its casual counterpart." So, core gamers will keep buying, while casual gamers won't. Good news for some companies, bad news for others! "The casual market looks more exposed to an economic downturn, due to its non-essential nature," continues Kamide. "The sector remains 'hit-driven', which provides a positive outlook for the companies with strong core title line-ups." Big games like Metal Gear Solid IV should still perform. What's more, Kamide adds:

Casual gaming growth has been driven over the last three years by the Nintendo DS platform. Demand has peaked in Japan, and we believe is currently peaking overseas. Compounded by a less robust retail environment, we expect to see a decline in the handheld sector...

Companies that KBC expect to do well during the economic slowdown include Capcom and Square Enix as both have strong core franchise game sequels coming out. Granted, Dragon Quest IX should be a big DS hit, but we're not entirely convinced that it'll bring new players to the platform at this point. Everyone in Japan already has a DS!


Comments

    I doubt it will affect sales that much. Entertainment traditionally does alright during a recession.

    Its hard to disagree with the statements made by the analyst, but I don't believe that its all doom and gloom. Demand for the DS may well have peaked in Japan, but it likely has more to do with the fact that most everyone who wants/will want a NDS has one already!
    A downturn in the casual market can only mean bad things for slactivision and their endless Guitar Hero Iterations... WooT!

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