Intel’s Revenue Expected to Take a Hit
The economy is struggling; unemployment is high, sales are sluggish as demand is waning. Of course, you didn’t need me to tell you that, the news media has done more than its share of bemoaning over current conditions. The current environment has affected everyone; from the lower class individual struggling to make ends meet, to the fortune 500 companies trying to maintain their profit margin, keeping at bay the need for layoffs of both their white and blue collar employees. Intel, the manufacturing chip giant, is the next of a long line of companies feeling the pinch.
Last week Intel made it known that the company’s fourth quarter revenue would fall well below their original estimate, about $2 billion short. There are a few reasons for this sharp disparity, but the simplest explanation is that PC makers are simply ordering fewer chips, who in turn are doing so because the economy has curtailed consumer demand for big-ticket items, such as computers.
Intel now expects to generate around $8.7 billion in revenue for the fourth quarter, down from the $10.1 billion the company expected. These numbers are down 23 percent over the same quarter in the previous year. The drop in revenue, as mentioned above, is namely the result of PC makers cutting orders in response to the demand of the market, as makers survive off their existing stock of chips.
Those numbers may not elicit pity from many, but the company may be forced to make cuts within its workforce, forcing more people to the unemployment lines. Besides the unsettling news of more layoffs, this report could actually have an impact on the everyday consumer, limiting their options as manufacturers attempt to cut out the fat and reduce the price of their products, and possibly even lowering the quality.
While this could effect PC gaming, especially if things worsen and PC manufacturers decide to trim some specs to save costs, it’s not time to begin worrying yet. A recent article, researched and written by fellow GotGame contributor Alan Templeton, points out that while the economy is struggling, video games sales have held strong, and may even be “recession-proof,” providing people a way to escape from their troubled realities.
Need a Brief Escape?
If the struggles worsen or continue for an extended period though, the validity of these theories may be put to the test. Only time will tell, but for this writer, sometimes the only way to get a break from those incessant worrisome thoughts, is to pop in a game and for the next few hours escape to a world void of bills and debt.
Tags: Intel
I don’t want to see intel,amd or invidia crash. I think they need to relase another high end game soon. However that being said high price products are a problem. Console gaming is a problem too. More people who buyconsoles the less money there is for pc games and pc’s
Games may be recession proof, but without machines to play them on, nobody wins. The fact Intel is $2 billion short makes me pretty uneasy.
Also, not to nitpick, but the author of the article you reference is Adam, not Alan.
Intel may have to live with these numbers. The reality is that very few people want the fastest hardware now. It has taken the public a while, but there is now a groundswell of computer users that understand that the machines are fast enough and that the continual bloat is the enemy. They were not going to swallow Vista, and I get the feeling they will turn on all other bloatware in the coming years.
This prediction is almost a certainty because there will be few if any big budget PC games requiring high end hardware coming any time soon. The public aren’t buying the Ghz… Laptops with limited CPU GPU combinations are in, and Netbooks are the next big thing. Publishers will build games for the masses before investing tens of millions trying to make a niche group happy. With the economic downturn, average people just will not spend much more than a Netbook price on a new computer. When the economy recovers, a new price point ill have been set. people will not go back to spending thousands if they are used to spending hundreds.
Oh, and console gaming is not a problem. Console gaming was around long before the home computer. It was an established competitor to Microsoft DirectX long before Intel PCs got colour graphics, TV resolution screens, or sound. Not mentioning the better competitors Microsoft killed off with the slimiest FUD campaign in human history. So if you look at it carefully, PC gaming has been a problem to Consoles for a decade and a half… and may just die out for a while… these things swing back and forth every five to eight years.
Economic recession brought about by the adverse reaction was a lot of people do not want to see, if because of this jerry-building and cost-effective choice, and that is I do not want to see, you write a good article, thank you!