Casual Games May Be Recession-Proof

Tuesday, November 25th, 2008

Casual Games May Be Recession-Proof:

From talking with executives at gaming outfits in Seattle and Boston, it’s clear that there’s pessimism in the industry about Web advertising as a source of revenue, and about the prospects for survival for companies that get the bulk of their revenue from display ads. “For ad-based casual gaming companies, pretty much everyone agrees that it’s going to be tough for a while,” says Christopher Cummings, senior product manager for Gamesville, a gaming site owned by Waltham, MA-based Lycos. “Some startups probably won’t survive, and for others it might be lean times.”

But casual gaming companies with more ways to make money, such as charging customers for downloads or tournament play or licensing their games to other companies, may fare better—especially as computer owners turn to casual games as a less expensive diversion than going to a movie or eating out.

“One possibility in a downturn would be that people would have an aversion to games, because it’s discretionary spending,” says Jeremy Lewis, CEO of Big Fish Games, which gets most of its revenues from purchases of the downloadable games designed by its community of 650 freelance contributors. “But a second possibility is that people see it as an attractive alternative to other more expensive forms of entertainment. And a third would be that people who are out of work have more time to play games. We are certainly seeing the second effect, and maybe also the third.” Lewis says Big Fish’s October revenue was up a whopping 23 percent over September levels.

Gaming executives are also encouraged by surveys indicating that Americans plan to retrench during the recession by spending more time at home and less on activities like travel and theater-going.

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