balfore said:
I could be way off on this, but as far as I'm aware inflation is the decrease in value of currency, where as in 1983 $40 has the spending power of almost $100 today. How are they misusing it? I understand there are many more factors such as median income but it seems completely appropriate in the context.
Two issues here:
The first is that inflation is not necessarily what might be thought of as a constant across everything. Housing getting far more expensive when other things do not is inflation, but it leads to misleading comparisons, as you can still buy, say, the same number of loaves per bread per video game you could buy, but you can't buy the same number of loaves per bread per rent you pay. Inconsistent inflation across different markets thus is rather confusing. Honestly, an easy way of looking at this is video games - video games cost the same now as they did in the mid 1990s! Many games cost $50 in 1993, and many games STILL cost $50 in release in 2013, despite 20 years of inflation. That would suggest a 0% inflation rate for video games. Other things have also gotten cheaper - a decent computer, for instance, is far cheaper today than it was 10 years ago in absolute dollar terms. Thus, inflation is not actually a constant value across markets, and so just blindly applying a number is confusing, because it doesn't necessarily mean what it seems like it should mean.
The other problem lies in the fact that your disposable income affects how much money you can spend on entertainment. So if I used to have, say, $1000 a month in disposable income, and now I only have $800 a month in disposable income, the cost of anything I MAY spend money on has effectively inflated by 20%, because I can purchase 20% less of it, even if its price has remained constant. So if you look at the graph that mdev posted, someone who was making 54k in 2008 (adjusted) is making 50k in 2011 (adjusted). That person has lost 4k of annual income, effectively, which means his discretionary budget has shrunk by likely several thousand dollars.
So, basically, if I had $400/month of entertainment money in 1983, and $500/month of entertainment budget in 1993, assuming I'm buying a $40 video game in 1983 and a $50 video game in 1993, the difference in cost is 0, even though, ostensibly due to inflation, the $40 game "cost more" post inflation - because it takes up the same proportion of my discretionary budget, it effectively costs the same amount regardless of inflation.
I think we may see another video game crash. However, it would not be the video game crash of 1983 all over again. Still, it could be very, very bad. That being said, I think it may not be possible for it to happen in the same way; rather, I suspect we'll see a more gradual crash over a number of years as large companies flounder and the mobile games market has real problems. The predatory pricing of apps is a big problem, I think, for the mobile gaming industry, and I could easily see it ruining the industry down there on the bottom, which wouldn't be good for us on top.
Additionally, there is the AAA market which may be in danger to some extent. If they can't keep people buying games, what happens? That being said, I'm not sure such a crash is possible; if a few of the big guys died, I think the others would be able to survive it because they'd pick up the lost sales. AAA games DO require huge budgets, and thus large numbers of players.
I think games are too mainstream now to really fail in the way they did before. On the other hand, I could be wrong; honestly, I expect that the television industry is going to start having very major problems in the next few decades. Old people watch TV; I don't, and many people my age do not pay for television. What happens when the internet takes over television's role? At some point, high-budget programming is going to become increasingly untenable, unless it is supplemented by some sort of income from the internet, but internet needs and television needs are far from identical.
I wouldn't be surprised if the console industry crashed entirely, though. It has like, one more generation left in it at most, and maybe not even that. Computers are getting too inexpensive to compete with; the consoles worked on the idea that you had to pay a lot for a gaming PC, and it would still be obsolete in less time than the console. That simply isn't true anymore; a new computer in 2013 will probably last the entire lifespan of the next console generation, because it has higher specs than said consoles. The Wii U's sales are "encouraging" the competition, but I don't think that it is actually encouraging at all - some people have pointed out that if people aren't buying the Wii U in any real numbers, what makes people think that the other consoles are going to be any better off with higher price tags and less innovation?
Incidentally, regarding:
While the "indies" are making games like "Thomas Was Alone", "Braid", and "Bastion" that would hardly have stressed last generation's hardware, the AAA people seem convinced that what we really need is photo-realistic hair on our dogs.
The problem is, more or less, Braid and Thomas Was Alone are very art-house type games. They aren't actually good games. Bastion isn't actually that great of a GAME either; it is the story which sold it.
Also, regarding Kickstarter: Kickstarter is no savior. Kickstarter is actually one of those routes to failure. Kickstarter itself is going to have a bunch of high-profile failures in the near future, and people are going to get stingier with it.
Tl; dr; I think the industry may be heading for something bad happening to it, but it won't be as abrupt as the video game crash of the early 1980s, and it won't be the same. I could see the smart phone gaming market completely crater, though, and utterly wreck mobile gaming, and indeed that industry already seems well on the way for it. I could see the console industry cratering too.
But PC gaming? I think it is fairly safe due to the lack of need for proprietary hardware and the fact that you can set your budget to whatever is reasonable, while still having broad distribution. It might even benefit from the death of the console.