Bare Knuckles: Hard times for the game industry

Every time I've raised concerns about the health of the game industry this past year, either a story would break a short time later with an analyst exclaiming the industry was recession-proof or a gamer would e-mail me saying something akin to "What?! You crazy, man! I just bought a zillion games!"

There is a problem with both of those streams of information. For analysts, they should be telling you that most game publishers are making little profit and their share prices are getting slammed. So far, sales haven't been enough to stem the tide of economic difficulties for even the most well-known publishers.

Also, while games sales have risen steadily over the last couple of months, consumer-confidence measurements seem to be saying that everyone is putting their money under the mattress for now and the near future. That is, if they have any cash to do even that.

The most adamant e-mailing gamers have a fatal flaw in their argument, too. They don't represent the health of the video-game industry. For instance, a gearhead may still buy the new high-performance Pontiac G8 GXP (someone said it is a poor man's Corvette, a Pontiac!), but it ain't going to save Pontiac, bailout or no.

Let's see, in the last week, Midway has announced cuts to 25 percent of its workforce and owes $150 million to lenders, but has assets of only about $168 million. Ugh.

Factor 5, whose employees reportedly haven't been paid in a month, laid off half its staff. Turbine, the massive multiplayer online game-maker, has reduced management and quality-assurance staff in operations on both coasts. Sigh.

If you need any more evidence of serious problems, even Nintendo, which sold a truly bizarre amount of Wiis (two million) in November, is catching some economic shade thanks to the same casual fans that have been buying the thing all along, according to Screen Digest senior analyst, Piers Harding-Rolls.

"These new, non-enthusiast and more mainstream console gamers view many Wii and DS games as experimental and discretionary luxuries," he told gamesindustry.biz, the gaming news Web site. "As the recession bites, Wii and DS games are likely to fall from the shopping lists of some of these consumers."

Can it be any more ironic that the once mega, recently minor, E3 is supposed to return to the big-bang theory next year? How many midsize and smaller studios will be in LA for the event next year? How many will be around at all?

Now that the open beta for Sony's Home is up and running, many visitors to the company's online virtual world are giving it five "yawns."

When some of the most interesting conversations in online forums about the new social-gaming service is about why so many male gamers choose to have female avatars, there is a problem.

Personally, I just think it is a matter of bad timing, beta or not. See, this is the holiday season. Gamers are buggin' out in post-apocalyptic worlds (Fallout 3), futuristic human extinction (Gears of War 2), zombie infestation (Left 4 Dead) or a new breed of brain-teasing puzzlers (Little Big Planet).

It doesn't really seem like a time to release something with very little bang to it.

Hey, it's cool you can decorate your pad and play parlor games for free with other "Homies," I guess. Just not right now.

Huge game publisher, Electronic Arts, is hurting. It is laying off 6 percent of its staff, it lost 310 million Benjamins last quarter, and the stock price is very close to its low for the year.

And guess who might be coming to dinner?

The Wall Street Journal's Martin Peers wrote a little Disney diddy over the weekend that talks about the multi-media giant possibly looking to acquire the game giant. We aren't talking some kind of slick share-swap or other confusing and complicated purchase, either.

Disney could just step up and pretty much take it, fearing little, if it wanted to. "Brodie" it, for all of you old-school slang folk like me. It isn't as if EA still walks around with its chest puffed out. The company is worth little more than $7 billion, down from $19 billion a couple years ago.

While there wasn't concrete proof in the story, EA is starting to look juicier for those few who can make such moves.

In fact, I think I am going to look at my checking account and try to work something out.

OK, enough with the gloom and doom, even if it is feeling a bit dark and stark these days. I am going to end this with a couple of cheap game gifts for the stockings next week. These are guaranteed not to break hearts or banks come next Thursday.

1.

Gamer points.

Xbox 360 owners always need gamer points. They enable them to buy all kinds of goodies on Xbox Live, Microsoft's online game portal. For 20 bucks, you get 1,600 points. That's enough for around two downloadable games of their choice.

2.   Books. Contrary to popular belief, gamers will read something. There are all kinds of game-related books to choose from but the recent The Art of the Video Game by Josh Jenisch, The Art of Halo 3 by Prima Publishing. and The Ultimate Guide to Video Game Writing and Design by Flint Dille and John Zuur Platten are heady, thought-provoking choices.

3.

Games on games.

It's been said that video games killed the board game. It's an interesting debate, but the Clue/Mouse Trap/Perfection/Aggravation game bundle for the Nintendo DS is still loads of fun for really cheap. Besides how many DS owners have even heard of Mouse Trap?

4.   Star Wars luster. Lego's take on the Star Wars universe has been met with critical success over the years and I've seen The Complete Saga game, which encompasses all the films, for around $20 (Xbox 360, PS3, and Wii) almost everywhere. Not a new title, but an engrossing one for the younglings.

5.

Steer this way.

If someone has Mario Kart for the Wii and they don't have the wireless steering-wheel accessory, please, end their shame. It's under $20, for crying out loud.