The Number Crunch

When I meet people and the "what do you do for a living" question comes up*, my new acquaintances tend to jump to the conclusion that I somehow fund my lifestyle by playing video games all day long, or they assume I simply do nothing but write reviews (for the record, I'm happy I don't!)

Although many of you who visit me here at Sexy Videogameland are probably more familiar with my consumer writing -- you might've found your way here because of my editorials, or my Kotaku columns, Escapist features or reviews, for example -- I make my living as a business reporter at Gamasutra, as you regular SVGLers know.

If there is a lull in SVGL posts, as has happened often lately, and you want to know what I've been doing with myself**, just search Google News for my byline and you'll see all my daily

Gamasutra pieces (and probably some occasional results about other people named Leigh Alexander, some of them criminals). Or better yet, just read Gamasutra, because I'm not too shy to say I think the news and features writing my coworkers do under the supervision of maestro Simon Carless is pretty top-shelf.

Anyway, the majority of my time is spent writing business news. And it's ironic that folks I meet out in the real, non-internet world tend to have trouble wrapping their head around games-as-business, because now more than ever, that's what it is, first and foremost. If it weren't for the prolific indie scene, the growth of alternative business models and social gaming, we'd have a worrying Hollywood-ization on our hands here.

The core games industry cares about investors, who care about Metacritic scores; the fates of our favorite titles and studios are determined by numbers, and success is measured in fiscal quarters, unit sales and revenue dollars. So while we as gamers might not give a rat's ass about the monthly NPD, about Nintendo's profit forecast or EA's restructuring, stories like this are a

crucial barometer of How We're Doing, and this has been a particularly tricky year for industry numbers.

Slump, Slump, Slump

You may or may not have noticed that the games industry has "declined" all throughout the summer months of 2009, which means that when we compare each month's sales dollars to the same month in 2008, we're not measuring up. Why should you care? Well, because how much money the industry is making affects everything from game budgets to publisher slates for next year, it determines how many gambles publishers can take on new IP, it determines how confident investors feel in buying into game companies, and overall, it spells whether or not we are a healthy, growing industry or a struggling one.

We had nothing short of a stellar year in 2008 -- the biz's Best Year Ever, by many estimations, in terms of both the quality and diversity of the title slate and the strength of those titles' performance. Remember how happy we were to be "recession-proof?" Unfortunately, that's all coming back to bite us now.

See, for NPD numbers to show continual growth, we always have to do better in any given month than we did in the same month last year; a really strong 2008 just sets the bar much higher for 2009. You may see the phrase "tough comparisons" all over the place -- that's what analysts and game execs alike have fallen back on to explain the declines. There's nothing wrong with the games biz, they've asserted: it's just we did too well last year. Well, you sure don't hear anyone saying "recession-proof" anymore.

Ahead Into The Unknown

Even Nintendo, basically the most successful company of the current generation, is taking a beating from analysts in the U.S. and Japan over a Wii that appears to be "tanking" -- only in a world where comparisons mean everything can a console that's sold over 56 million units be under the microscope. No wonder Nintendo's Satoru Iwata and NOA's Reggie Fils-Aime come across so defensive in current interviews.

To be fair, Nintendo brought this on itself -- by boasting that it carried the entire industry's growth on its shoulders last year (largely, it did), it set itself up to have everyone point fingers at it when Nintendo's declines drag down the rest of the biz.

It's true that part of what looks like a weakening games business is due to tough comparisons; some people also think the poor consumer economy has finally begun to catch up with Wall Street's golden sector. Maybe it's also that this year's games aren't as good as last year's -- while we're on the Nintendo example, the company admits that it hasn't had the same powerhouse software lineup this year that whipped up Wii sales throughout last year.

Analysts are currently divided on whether the game industry has a shot of ultimately posting annual growth this year -- most are pessimistic, actually, but it's all down to how things go this holiday season, the proving ground that'll demonstrate whether it's weakened software lineups or cash-strapped consumers that are slowing the biz down.

What You Guys Said

This is why I polled you guys recently on how your belts and wallets feel going into the holidays; 289 of you replied, and unfortunately, the largest share of you, at 35 percent, said you feel cash-strapped and plan to spend less money on games this year.

But the next-largest segment of you, at a healthy 28 percent, say you don't plan on doing anything differently, and will spend about the same; 14 percent of you might reduce your wish list by, say, one game, and 13 percent of you are so psyched by the bounty of holiday wishes on offer that you plan to spend more. The remainder, or 7 percent, say you don't usually spend on games for yourself and are hoping for gifts.

So if 28 percent of you will spend just as much as you did last year, and 13 percent of you will spend more, and let's say even a few of you gift-hopers get a game or two from Santa, the picture actually looks pretty good for a healthy holiday, don't you think? The ESA also did a poll that was a bit bigger than mine, and found 42 percent of 1,001 U.S. consumers it surveyed either plan to give or hope to get a video game this holiday. Who's up for some cautious optimism?

Have I gotten you all psyched about INDUSTRY NUMBERS yet? If you're into that kind of thing, you should know that we run a monthly feature by the excellent Gamasutra analyst Matt Matthews, who looks at the major trends and facts to emerge from the NPD numbers. Here's October, for example, and you'll find one on our site every month, usually the Monday after the numbers come out (which is most often the second Thursday of the month).

Plus, the shrewd crew at NeoGAF makes a monthly thread to dissect Matthews' work, so if you enjoy number crunching and chatting stats, you can always find one like this to get in on. C'mon, everybody's doin' the numbers dance, you know you wanna!

*Bonus Info 1: For more on dealing with the "what do you do" question, pseudonymous designer Spitfire once commiserated with me at length on trying to talk about working in video games with average folks.

Bonus Info 2: I stole this picture of a Pac-Man Christmas tree from here, where you can also see video of it!

**Bonus Info 3: You can also follow me on Twitter, join the SVGL Facebook group, or check out the "latest stuff of note" in SVGL's sidebar, or leave me a hello-note in the ShoutMix chat box, also in the sidebar. I miss you guys when I'm unable to keep up the blog ;_;