Evaporating ROI

Video Games were once a recession proof industry because of two principles: low cost and high return. 

Both were true for producer and consumer. Games like GTA III and Pokemon were cheap to make, cheap to buy, sold in high amounts, and provided hours of entertainment. As far as entertainment went, it was a value when incomes were down and people needed to escape the harsh reality of ramen diets and bad jobs.

But when parts manufacturers wanted a bigger slice of the pie, suddenly polygon counts and frames per second started being pushed like consumers needed to care more. Suddenly consumers thought the did care more. They tuned out of what they felt, tuned in to what they were told to believe, and suddenly they needed more processing power and more memory, more movie-quality production and movie star faces and voices. 

Now we are at the end game and Nvidia and AMD, the suppliers that pushed the production spending race to justify their hardware, are now abandoning video games for AI data centers. Left holding the bag are video game companies that have lost customers and value, no longer recession proof, no longer affordable.

Even indies, once low-budget stalwarts of low-power hardware, have now become middleware-dependent, AI-embracing, memory hogs. They demand PCs with miminum requirements often costing more than a console, for Early Access bug beds or dervative games with contemporary social messages, readily spoiling like milk on a warm summer day.

The Chief Financial Officer of General Motors recently told the Chicago Federal Reserve that they are prepared for a recession. Economists have calculated that US GDP growth would have been 0.1% without data center spending.The likelyhood that the US, if not the world, is heading for a recession is high. The chances of video games resisting the recession are much lower.

What would a recession proof industry look like? Nothing like Ubisoft, Microsoft, or 2K.