Microsoft Says Xbox 360 is "Recession-Proof" (Meanwhile, MS Stock Has Hit a 10-Year Low)

It’s well-known to most everyone that the economy isn’t doing so well these days. But while most people are wondering how this will affect those forced to sell their homes or find new jobs, the video game companies would like you to know that they are doing just fine. Or at least, that’s what they say.

Recently, vice president and Chief Financial Officer of Microsoft’s Entertainment and Devices Division, Mindy Mount, commented at a BMO Capital Markets Interactive Entertainment Conference that the Xbox 360 is “recession-proof” (Via Softpedia). Her argument is that a slow economy means people will consider their personal spending more carefully and may try to find the a way to get more bang for their leisurely spending:

“In tough economic times, people tend to cut back on very high-ticket items like travel and automobiles, but they still want to be entertained. Video games already offer some of the most hours of entertainment per dollar than any other form of entertainment.”

I can see her reasoning, but the real irony of stating the 360 is immune to a recession comes when you find out Microsoft’s stock was at the lowest it has been in ten years just a few days ago (Via SeattlePI). The stock recently dropped to $19.19 per share, which is apparently the lowest it has been since 1998. That’s also down 43% from last year. Of course, those stock problems are most likely due to the PC side of the company, but you still have to wonder just how “recession-proof” the gaming industry really is.

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2 Comments on Microsoft Says Xbox 360 is "Recession-Proof" (Meanwhile, MS Stock Has Hit a 10-Year Low)

SpiralGray

On November 18, 2008 at 4:35 pm

“In tough economic times, people tend to cut back on very high-ticket items…”

Yeah, and to a lot of people the 360 is still a high-ticket item. Also, people tend to cut back on luxury or discretionary spending. “Honey, should we buy a game console or food this week? What do you think?”

What planet are some of these people living on?

Jim

On November 18, 2008 at 6:31 pm

The gaming industry does tend to cope pretty well during a recession so her comments made sense and Microsoft’s stock dropping has nothing to do with their gaming division so i didn’t see much point in you mentioning it since you seem to acknowledge the fact.
The question is, is this recession going to turn into an all out depression in which case all bets would be off.