I love graphs. Everybody loves graphs! They can take any information and if passed through the hands of a skilled statistician can make bad news look good, good news look bad, and in this case, slightly bad news look down-right awful.
Silicon Alley Insider’s recent Chart of the Day is all about video games, and is smugly titled “Video Game Industry Not So Recession Proof After All”. Incidentally, the phrase “recession proof” was coined all the way back in Novemeber 2007 when it was uttered by Nintendo man-in-charge Reggie Fils-Aime whilst talking about the Wii (and sales charts indicate he was right). The phrase was once waved around by the gaming community as a sign of our awesomeness but as time has worn on it’s now more often found in vague, hypocritical, phrases like “some said it was ‘recession-proof’, they were wrong”.
Back to the chart. This graph shows the demise of the gaming industry. Just look at it: The graph was really high, and then goes down. It’s described on Kotaku as charting “the decline in video game sales since 2007″. That can only mean one thing; we’re doomed. Unless you take a closer look.
Here is that data again, only not showing year-on-year change, instead just showing total software revenue in $millions (the graph isn’t adjusted to account for the non-month aligned NPD figures, but it’s accurate enough for what I’m pointing out).
Not quite as dramatic a down turn if you put it like that. To be fair though, there is a noticeable decrease in software sales, as shown here when you stack the months Jan though Oct from 2008 and 2009:
On average there’s been a roughly 14% decrease in software sales this year. To point to this and say the recession is completely to blame is stupid, or at least I think so. Firstly, individual game releases can make a huge difference. 2008 was bulked up with the likes of Super Smash Bros. Brawl, GTA IV, Mario Kart Wii and Metal Gear Solid 4. This year we only really saw Resident Evil 5 and Halo 3: ODST (see the September blip for the impact of ODST’s sales) with a strong brand showing. Other summer best-sellers did well (UFC 2009, Prototype, inFamous) but just don’t carry the weight of a big-name franchise.
There is another fantastically overlooked part to the original graph; it shows difference in sales from last year, not actual sale figures. When the line is above 0%, sales are up. If the line is at 0%, as seen in early ‘08, described by 1up as a “massive nose-dive”, sales are equalling those of the previous year. Even if the graph is going down, if the line is above 0% then more games are being sold than the previous year. This means that sales figures only started decreasing in April of this year.
But wait, there’s more! Look at the previous year, sales were up during the summer 40% from the previous year. That’s an impressive high, and one that unless either equalled or beat, would show a negative result the following summer.
Obviously with everybody (apart from bankers) having less money, sales will be down, there’s no real question about that. But unless you take into account more details, these graphs are meaningless. If anything it shows a slowing, not decline of sales.
To go back to my first point about how graphs can be made to twist things in any number of ways, here is a graph of cumulative software revenue.
Pff, what recession.
Data: VG Sales Wikia
This is a great example of what statisticians call “regression towards the mean”:
http://en.wikipedia.org/wiki/Regression_toward_the_mean
In other words, if things are good, eventually they’ll turn bad. Another example in gaming is the so-called “Madden curse”. Anyone put on the front cover of the latest Madden game is clearly at the top of the career, so it’s not unexpected to see something bad happen to them afterwards.
Is The ‘Tak genuinely worried about a decline in gaming?
Or is this another quest for panic-views?
There is an interesting article on GWJ here. An interesting piece on the financial state of the industry.
Oh well, I didn’t thought as well that the gaming industry will not be affected by the recession. But when I learned that EA had a layoff and bought PLayfish, I realized that I was wrong.
The reason the gaming industry isn’t all that effected by the recession is because people still need some way escape the stress akin to recession,(otherwise the graph of people coming to work with a shotgun would be going up) but with less money they don’t buy the super expensive means of escapement -cruises and such- so they keep buying videogames.
Books get the same effect.
Finally someone who actually understands what these graphs mean.