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Commodity Spotlight: Video Game Systems

Thu Apr 14 2011
David Johnson
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Christmas has come and gone but let’s take a look back at what people were buying this past Christmas.

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The holiday season is a huge time of year for all retailers and this holds especially true for video game system manufacturers. Let’s take a look back at some of the patterns and developments in imports of video game systems used with televisions over the last 9 years.

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Here we have the quarterly value of imports under HTS 9504.10.0000 versus the total imports of all commodities. One of the first things that you might notice is the large jump in imports starting in fourth quarter 2006 when the next generation of video game platforms were released . Since 2002, video game systems have gone from a quarterly high of less than $1.5 billion to not dipping below the $1 billion mark in any quarter during the last 4 years.

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Another noticeable feature is the reliable pattern of peaks and valleys. All of the major game systems released in the last ten years (with just one exception) have been released in the fourth quarter or the end of the third quarter of the year . Even without any new systems though, the pattern of surging imports for the holiday season is consistent. In fact, holiday imports have surpassed 2006 during 2007, 2008 and 2010 without any next generation consoles being released.

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We see that video games surged in 2007 and then followed the trend of total imports, decreasing in late 2008 and in early 2009. The fourth quarter 2008 is interesting in that, while overall imports were falling sharply, video game systems had the highest recorded imports ever. From the third quarter of 2009 to the fourth quarter of 2009, video games declined while total imports rose. During the fourth quarter of 2010, there were large imports of video game systems in spite of only minor increases in over-all imports again returning to levels higher than 2006 but still not quite reaching the pre-recession levels of 2007 and 2008.

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So what is the picture that is being painted here? We see that imports have more than doubled over the last 9 years in spite of an economic recession. Releases of machines with new technology can spark a surge in imports for retailers. At least in the video game systems business, the imports continue to thrive and fluctuate based on strong holiday season demand.

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