According to The Wall Street Journal, "strong holiday sales of its Wii video game console and Nintendo DS portable game device helped Nintendo (OTC: NTDOY) nearly double its nine-month net profit and raise its sales forecasts for the third time this business year." In other words, there is no recession at Nintendo.
Figures out of Microsoft (NASDAQ: MSFT)'s device division would also indicate that there is no slowdown in video console sales. Nintendo raised its forecast for Wii unit sales for the year ending in March to 18.5 million from 17.5 million.
One of the questions Wall Street is asking is where the consumer will draw the line on purchases. Expensive products like cars are likely to get hurt. Fast food numbers seem to be fine. A video game console is a $200 to $500 purchase, with Nintendo's products being at the low end of that range.
One advantage video games have over other products in a downturn is that consumers can use them for hours a day, not unlike a TV. That puts the "cost per hour" of owning a video game products at pennies for avid users.
Does that make video games recession-proof? Probably.
Douglas A. McIntyre is an editor at 247wallst.com.