Is the Online Gaming Sector Recession Proof?

With the recent announcement of a drop in mortgage applications, it has been widely reported that the global economy is gearing up for a recession. Share prices of publicly traded companies have taken a hit as investors seek to withdraw cash from stock markets and put excess funds into safer, lower-risk investment portfolios. However, to the surprise of many industry analysts, the turbulent online gaming sector appears to be coping quite well with the uncertainty and turbulence facing the markets.

This has led many industry experts and investors to boldly declare that this sector is recession proof. But is this bravado based on false confidence, or is there some substance to his rather bold statements?

The online gaming industry has had a rough couple of years following the passage of the UIEGA, which effectively made online gaming illegal overnight in the United States. The share prices of a number of online gaming companies have been hit hard, but in 2008 a number of the publicly traded companies have returned to the levels of profitability they experienced prior to the passage of the UIEGA legislation in October 2006 .

There is some substance to analyst predictions that the gaming industry is recession-proof. With consumer money belts tightening, consumers are likely to spend much more leisure time at home. Online gaming, particularly online poker sites such as Poker, represent leisure activities that can provide hours of entertainment, and many consumers would rate them as good value for เว็บแทงบอล money. With broadband connectivity becoming cheaper and more accessible, many believe that the recession may provide new opportunities to acquire new players.

This argument has some substance. However, the curbing of consumer spending is likely to immediately affect leisure activities such as online gaming. Existing online gaming players are likely to reduce their gaming spending, or even stop altogether.

Analysts’ predictions therefore look too positive. While they may proclaim that the gaming industry is recession-proof, gaming spending is more likely to be top of the list for most consumers when it comes to reevaluating their disposable income. Industry analysts seem to be betting when the odds are stacked against them.