Research Firm: Industry Could Be Headed for 1983-Style Crash

October 3, 2013 - GamePolitics Staff

New York-based research consultancy firm SuperData Research warns that the video games industry could be heading towards a crash similar to what happened in 1983 when Atari was at the top of the console heap. A new report prepared by Superdata and released by Digital River warns that the market for consoles is already crowded; 79 percent of gamers already own a console, with the average consumer owning 2.6 consoles each. The report is based in part on a March survey of 1,105 respondents.

"Industry veterans will remember the crash of 1983, when the games market was saturated with hardware devices," the report states. "Today, the industry runs a similar risk, as [with] a higher-than-ever console installed base, consumers may be resistant to adding more hardware to their living rooms."

The report notes that, while there are more gamers than ever before, the habits of these gamers are changing. Superdata's research found that gamers are increasingly moving towards multi-purpose platforms like PCs and mobile devices.

In 2008, 42 percent of gamers played games on a console platform, compared to 37 percent who favored PCs and 5 percent who preferred mobile devices. Now 51 percent of gamers play primarily on PCs, and just 30 percent on consoles, according to SuperData. Around 13 percent of gamers play primarily on mobile platforms.

The report also pointed out the shift towards digital consumption of games in the US. America's digital game spending jumped from $1 per capita in 2000 to $14 in 2012.

Source: GII


Re: Research Firm: Industry Could Be Headed for 1983-Style Crash

Right, because no one would ever consider upgrading.  

Re: Research Firm: Industry Could Be Headed for 1983-Style Crash

I don't know about you, but I just bought my PS3 a couple of months ago. There is a still a HUGE backlog of games for me to buy and play. Why would I upgrade to the PS4 anytime in the next 5 years? 

The fact remains, there are many people like me who have just bought a "current gen" console who will not buy a "next gen" console any time soon. Will Sony and Microsoft be able to sustain a next gen? 

Re: Research Firm: Industry Could Be Headed for 1983-Style Crash

It is not a question of if there are people who will upgrade, but how many.

We are hitting a point of diminishing return, the next batch of hardware may not be all that compelling to many consumers, or at least not compelling enough.  In a way we are also encountering a similar issue with the software, esp when you compare it to the much faster adjusting cell phone/web markets.

Re: Research Firm: Industry Could Be Headed for 1983-Style Crash

If there's gonna be a crash, it's gonna be from rather different causes. The constant pursuit of AAA production values and overspending on both game development and marketing is beyond unsustainable - THQ has already gone under, and Capcom barely has $150 million in the bank, which, considering how much most AAA games cost to make, is REALLY bad. Sure, Monster Hunter 4 sold a truckton in Japan, but that's not their only franchise by any means.

One way or another, at least a couple more publishers may inadvertently hang themselves before anyone realizes that the way things are being done right now is not sustainable in the long-term. The same thing is happening with Hollywood, and even Hollywood has a reasonable middle ground between the blockbusters and cheap independent films - gaming doesn't have that right now, period.

Re: Research Firm: Industry Could Be Headed for 1983-Style Crash

Yeah, if there's a "crash" again it won't be anywhere near as severe as the one in 1983 nor will the situation be even remotely like the reason behind it. The number of different game platforms isn't even what caused it, it was the constant pushing of garbage with a complete lack of quality control, it also didn't help that people had next to no idea if a game was good or not until they actually bought and played it.

More hardware is certainly not going to be the cause of it, we've had two or three major consoles "fighting" it out now for over 20 years. How many people quit PC or console gaming for mobile gaming? How many people moved to PC gaming because the gap between even a mid-range gaming PC and the current gen consoles is massive while a decent gaming PC is more affordable than ever? Not to mention significantly cheaper game prices. If anything MS and Sony are going to need to change how they do business with publishers and retailers to bring prices down but that's likely not going to happen until retailers are no longer selling games and hopefully that never happens because the industry would take full advantage of selling their games on closed platforms with zero options to buy them anywhere else.

A lot of people are ready for a new generation, it's way overdue, it's taken longer but consoles are going to follow the same pattern that's been there for several generations now though it looks like both the PS4 and XBO are going to both going to launch way ahead of past console generations in terms of "instant" install base. The early adopters will get their hardware and throughout the years others will follow once they're done with the current generation.

Re: Research Firm: Industry Could Be Headed for 1983-Style Crash

I agree, I don't see a full crash coming, constant sales of new technology are going to keep these companies afloat.  They also have multiple other devisions (sony, ms) or large cash reserves (nintendo) that allow them to operate for a long time even at a loss on the hardware side.

I do however think that certain consoles may have difficulty breaking into the market, or will onyl be niche products (gamestick, ouya, shield) - either due to low power, poor marketing, high cost, or simply bad community management.


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