Fast food chains and videogames not affected by recession

Nothing goes better with a big, fat, juicy burger than fries smothered in ketchup, unless you add videogames to the mix. Then sales will skyrocket, according to Burger King Chief executive John Chidsey, who told Reuters that despite a recession, “If you look at the QSR space — the quick-service restaurants — we tend to be counter-cyclical because as people have pressure on disposable income, people trade for value.”

Which makes sense if you think about it, as people don’t mind dropping a few dollars for a quick meal or a cool game to occupy their time for hours, which Chidsey calls disposable income. Chidsey told Reuters that a typical person can eat well on $25 a day whether they are health conscious or not, especially if they’re purchasing items from the value menu.

But in a comparison with videogames, Douglas A. McIntyre of 24/7 Wall Street wrote that the videogame industry is also a disposable income market that won’t feel the recession either. One of the examples he used was the sale of Nintendo’s Wii system, with a 17.5 million projected figure increased to 18.5 million for fiscal 2008.

“Even modest gamers are probably not investing more than $1 a day over the course of a year,” McIntyre explained in his article. “The video game industry shows that even a modestly expensive product can sell in large volumes in a weak economy if its value is clear. Videogame consoles sell for $200 to $500. Video games are under $100. But, heavy videogame users play for hours a day. That means the net cost of the products is in the pennies a day. It is only now becoming clear what items consumers will buy in a tight market and which they won’t. Fast food and Madden 2008 made the cut.”

24/7 Wall Street is not an investment advisor, and the content of the site is not an endorsement to buy or sell any securities. All articles published by 24/7 Wall Street are simply the opinions of the writers.

Read [24/7 Wall Street] Read [Reuters] Read [Bloggingstocks]