Video Gaming Industry Finds Itself Recession-Proof

Omar Gallaga, technology culture reporter for the Austin American-Statesman, talks about just how the video gaming industry has become such a profitable business. Gallaga says it now occupies a central place in the world of home entertainment.

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MELISSA BLOCK, host:

This is All Things Considered from NPR News. I'm Melissa Block.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

(Soundbite of music)

SIEGEL: And it's time now for our weekly technology segment, All Tech Considered. Last week, we looked at how technology is changing the way charity organizations help those in need. This week, we look at how technology is changing how we let loose, specifically, the evolution of video gaming. And think about this, when the game "Grand Theft Auto IV" was released earlier this year, it made a whopping $500 million in its debut week. And that is $300 million more than the opening of the movie hit "Iron Man" that opened the same week. And while movies typically cost $100 million or more to produce, games cost no more than half that. Well, to help us understand what's been happening in that video game world, I'm joined, as always, by our tech expert, Omar Gallaga. Welcome back, Omar.

Mr. OMAR GALLAGA (Technology Culture Writer, Austin American-Statesman): Hi, good to talk to you, Robert.

SIEGEL: Video gaming obviously a massive profitable industry, and we're not just talking about kids nagging their parents to buy them games at the mall. We're talking about a very committed base of consumers, and in fact, an industry that's being held as recession-proof. Tell us a bit about that.

Mr. GALLAGA: Right, well, it's a very big industry - close to $10 billion last year and growing this year. People like me, who grew up with video games, are now in their 30s and 40s, and we kind of represent this hardcore gamer demographic that's gotten older and more affluent. Just in November alone, game sales were $2.64 billion. And the Nintendo Wii is still, two years after it launched, a huge runaway success. About - more than two million Nintendo Wii systems were sold just in November. We don't have the numbers yet for December holidays, but everyone is expecting they're going to be huge blockbuster numbers. So yeah, big, big numbers and it seems like this holiday season, definitely recession-proof.

SIEGEL: For games. Now, with the Nintendo Wii, with that console, the graphics aren't as much the story as the fact that your controller allows you to control the motion of your characters. This is the most physically interactive of all of these games.

Mr. GALLAGA: Right. And the Wii really proved this other trend in video games, which is kind of reaching out to the mainstream. Nintendo didn't try to cater just to hardcore gamers that have been playing all their lives, they really extended the market to moms, to people who hadn't picked up a game controller in ten years, people who wanted to play virtual bowling and Wii sports or get in shape with Wii Fit. They really sort of brought the fun back into video games and created games that are easy to pick up and play.

SIEGEL: Some other new trends in games?

Mr. GALLAGA: Well, there is a really big movement in so-called casual games. These are games you might download to your phone or might play in your office over Facebook - stuff like Bejeweled or Mah Jong or the Facebook version of Scrabble. Casual gamers have also, just like the Wii, brought in a lot of casual gamers into the fold. People who wouldn't considered themselves gamers, but who, you know, might spend some time playing for, you know, 15-20 minutes at a time.

Then there's the virtual music games - the Guitar Hero games and Rock Band. Those really exploded last holiday season and have also done well this holiday season. They're games where you create a virtual band and you have vocals, virtual drums and guitars. You get together with your friends and you play popular music. You might be playing Nirvana or Metallica. And you know, you're playing along to popular music, and it's sort of the video game version of playing karaoke.

SIEGEL: Yes, apparently bars across the country are now hosting Rock Band Nights and we sent our producer, Bilal Qureshi, to a local bar to see Rock Band in action.

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