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Games still cash in

Despite down economy, videogame makers and sellers are still counting on good holiday sales.

Lisa Collins, from left, Matt Petri, Phil Lor and Mike Ortega shop at GameStop at Northpark Mall in Dallas. While most industries have seen a drop in sales due to the economy, the gaming industry has had an increase in sales.

Mct photo

DALLAS — Bailouts, bankruptcies, liquidations and layoffs have been the business buzzwords during the last few months, but the videogame industry remains stubbornly resistant to the gloom enveloping the rest of the economy.

While game industry executives and analysts aren’t ignoring the broader economic trends, all the evidence seems to point to a robust holiday season for game makers and sellers and continued prosperity next year.

Part of the explanation for videogames’ continuing popularity, game insiders say, is the “nesting” effect, in which cash-strapped consumers stop going out and look for ways to entertain themselves at home.

“Clearly, interactive entertainment is a great value in a down economy,” said Dan DeMatteo, chief executive at Grapevine, Texas-based GameStop Corp., the largest standalone game retailer in the world.

The numbers seem to bear that out.

In October, videogame sales jumped 18 percent, according to market research firm NPD Group.

November has been solid, too, as GameStop said in its quarterly earnings conference call this month that initial signs for the fourth quarter are positive.

There are other signs that games remain as popular and lucrative as ever.

Blizzard Entertainment Inc. said that Wrath of the Lich King, the latest expansion for its popular World of Warcraft online game, sold more than 2.8 million copies in the first 24 hours after it was released on Nov. 13.

Blizzard said the sales avalanche made Lich King the fastest-selling PC game of all time.

Microsoft Corp. has also done blockbuster business in the last few weeks.

The shooting game Gears of War 2 for Microsoft’s Xbox 360 console went on sale on Nov. 7, and sold more than 2 million copies during that weekend.

Generally, any game that sells more than 1 million copies is considered a big success.

And almost anything sold by Nintendo Co. remains a hot commodity, especially the new Wii Fit exercise game for the Wii console, with GameStop and other retailers reporting essentially instant sellouts.

That’s not to say the game industry is ignoring the trends in other industries.

“We have some concerns short term,” DeMatteo said, noting that GameStop has frozen hiring at its corporate offices. “We’re watching expenses as anybody would prudently do.”

Arvind Bhatia, a game industry analyst in Dallas, said it’s unrealistic to assume that games will be completely unscathed by the broader economy.

“I think we’re going to see relative outperformance (compared with the rest of the economy), but I don’t think the industry is immune,” he said.

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