Can Nintendo Play Hard Through a Recession?

The game maker expects strong holiday sales, as more consumers opt for home entertainment

Satoru Iwata, president of Japan's Nintendo, delivers a speech at a press conference in Tokyo on October 31, 2008.The videogame company said on Oct. 30 that its third-quarter operating profit had risen by 35%, but lowered its annual profit forecast. TORU YAMANAKA/AFP/Getty Images

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By Kenji Hall

October 31, 2008 at 4:52 PM UTC

This article is for subscribers only.

Video games are recession-proof. That has been the conventional wisdom among gaming industry executives for years. But faced with the worst financial crisis in decades and the prospect of a global slowdown, will consumers see games as a frivolous expense?

Nintendo (NTDOY) CEO Satoru Iwata doesn't think so. On Oct. 31, Iwata predicted that this holiday season would help the Japanese company pull off its third straight year of record-high earnings. "In the near term, we don't expect the gaming business to be affected by economic trends," he told journalists and analysts in Tokyo.