For the game industry, January isn’t just an arbitrary point in the calendar, merely designated by tradition as a time for renewal. With the peak-selling Holidays at an end, it’s a time to literally take stock, and begin working towards hitting those targets for the next year, culminating in yet another frenzy of game releases in Q4.

In 2009, this business stands at the mid-point of the most extraordinary console generation ever; peering out over a Dantesque vista of rapid change in entertainment and communications technology and the near-certainty of a savage economic downturn.

Consumer behavior is in flux as never before, as new demographics warp our perceptions of killer genres and marketing becomes an infinitely complex relationship between supplier and consumer.

Certainly, we don’t claim to have all the answers here; but we have attempted to frame most of the big questions facing the game industry in 2009, in an A to Z format.

Avatars

Emerging, blinking weirdly, from the lofty halls of blue-sky conferences, 3D realistic-ish avatars have shambled into our living rooms, apparently requiring nothing more than to be dressed in horrid fashion items. In 2009, avatars need to wise up and smarten up. The theory is sound – we really do want virtual personalities that interact with other like-minds and hop from game to game, accruing skills and reputation along the way, like that Sylar fellow. But the practical reality is bordering on comedy. Avatars need to make us feel good about ourselves, and they must offer a practical, useful function above and beyond that of dress-up toys.

Blu-ray

This time last year, CES gave PlayStation 3 its ‘we-can-do-it’ moment of ersatz triumph, when that other format (whose name we choose to forget) was tipped down the chute, like Zurg. As Sony execs danced in the verdant forests of hope, 2008 was officially designated Year of Blu-ray. Twelve months on and the blue-suits are older and a little wiser. They have seen some steady progress as awareness has increased above the 50 percent mark; and average disk sales share (against DVD) above the 10 percent mark. Q4 hardware sales were driven by drastic retail price cuts and, according to Adams Media Research, the number of Blu-ray households in the U.S. is through the 3 million mark. Sony’s decision to bank on Blu-ray with PS3 still does not look especially prescient, especially given the price constraints it imposes on the hardware. High-definition digital downloads are now common and a serious threat to the last physical media format. Hollywood still wants to believe in Blu-ray – as does Sony. The public has yet to be convinced. It’s crunch-time.

Capcom

Arguably, Japan’s most advanced West-embracing third-party publisher, Capcom must deliver in 2009, with a roster of big brands. Street Fighter IV and Resident Evil 5 are two of the stand-out Q1 releases for the whole industry, and hold their own as the two of the most important games of the year. A new Bionic Commando is also expected as well as further forays into downloadable games, an area where Capcom has been especially active. Capcom is one of those companies that appears to operate in binary fashion; blinking on and off as one year of intense activity gives way to another of planning and preparation. This year, the lights are very much ablaze.

Digital Distribution

In the next few months, Xbox Live will pass the 200-games-launched mark. This extraordinary volume speaks of a healthy market for Microsoft and its partners, targeting a consumer-base made up of the estimated 70 percent of Xbox Live consumers who have downloaded a game. Many of the games are limited in scope and, for that matter, enjoyment. But this service is valid and is improving, as stringent game-size restrictions, for example, have been lifted. Steam on PC offers over 500 games and a registered-user base of over 15 million, and the downloadable PC games market remains a strong rebuff to those who believe PC gaming is dead. WiiWare and PlayStation Network have much catching up to do, and although they have offered some outstanding games, improving these services must remain high on Nintendo and Sony’s To-Do list. Likewise, publishers must continue to offer more value via game-update downloadable content that will sustain high game prices, rather than simply seeking to further monetize loyal consumers.

Evil Times

From time to time you may have read about how the game industry is “recession proof”. This is, and always has been, an absurd and dangerous idea, down there with unsinkable ships and the donut diet. What we do know is that good-value-for-money home entertainment can hack and slash away the worse effects of an economic downturn better than, say, the market for jewel-encrusted eggs. But no business is immune to the fundamentals of economics, like the small matter of millions of people having much, much less money to spend on entertainment. The industry will continue to grow in 2009, but not as fast as we might have predicted prior to the credit crunch. Unemployed people rarely spend $60 on new games. Piracy and the used game market – those two apocalyptic horsemen of our business – will be in town and living it up at the swankiest hotels.