by Ben SilvermanJuly 31 4:38 P.M.
Mired in an overall slump, the once recession-proof video game industry is finally experiencing some adverse effects from the troubled economy.
Just ask Sony. The games giant saw losses pretty much across the board in the year's first quarter, as sales of its flagship Playstation 3 system fell from last year's 1.6 million to only 1.1 million. Its PSP handheld saw a huge drop, too, from 3.7 million to only 1.2 million.
The one bright spot? The nine year-old Playstation 2, which managed to outsell the PS3 by roughly 500,000 units despite being older than some of its fans.
Part of the system's continued success can be attributed to the ailing economy. At only $99, it's a significantly cheaper alternative to the entry-level Xbox 360 ($199) and Nintendo Wii ($250), not to mention the still inordinately pricey Playstation 3 ($399). Adding bang to the buck is the system's massive library of highly-rated, value-priced games, which includes seminal titles from huge franchises like Grand Theft Auto, God of War and Final Fantasy. The PS2 also boasts the ability to play DVDs, which, despite Sony's efforts to promote its hi-def Blu-Ray technology, remains the industry's leading format (though video game sales outperformed both in 2008).
Unfortunately, software sales for all three Sony systems took a serious tumble, with PS3 games suffering a decline from 22.8 million last year to 14.8 million this year. However, the company has also noted that they've managed to reduce the production costs of the console by about 70%. Could consumers soon reap the benefits of those savings in the form of a long-awaited PS3 price cut?
