Interesting video game industry facts

Video game industry is currently one of the fast growing industries in the world.

So, let’s look to some of the mind-blowing facts about the US market in 2013:

. 59% of Americans play video games.
. Americans spent $21,3 billion on videogames, hardware and accessories.
. The average gamer is 31 years old and has being playing games for 14 years.
. The average age of the most frequent game purchaser is 35 years old.
. 48% of the gamers are women.
. 44% of the gamers play on their smartphone.



Source - ESA Entertainment Software Association

Myths about Portuguese Exports

Almost everyone, Portuguese people included, think that Portuguese top exports are wine, cork, shoes and clothing.

Although those goods are in fact very important in Portuguese economy, those are not even in the top 5 of Portuguese exports.

So, what are the major Portuguese exports?

1st – Machines and devices (15,1%)
2nd – Vehicles and other transportation goods (11,7%)
3rd – Mineral fuels (8,5%)
4th – Metal (8,2%)
5th – Plastic and rubber (6,8%)
6th – Chemicals (5,7%)
7th – Clothing (5,4%)
8th – Agricultural products (5,4%)
9th – Food (5,2%)
10th – Paper (4,9%)
11th – Other minerals (4,9%)
12th - Textile materials (3,7%)
13th – Shoes (3,6%)
14th – Wood and cork (3,2%)
15th – Optical and precision products (1,2%)

Info: aicep (2012)

Dollar to Euro - My Economic Prediction on 22nd Oct 2008

I answered a question in linkedin on the 22nd October 2008, where I predicted that Dollar would loose value to Euro in the near future.

It's time to do the math.
22nd Oct 2008 - 1 Dollar = 0,7786 Euro
26th Nov 2009 - 1 Dollar = 0,6635 Euro
So, Dollar devaluated to Euro 15% in the last 13 months

Click here to see this question on linkedin forum.

So, in 2008, I recommended a "Great Deal" to India, as you can read bellow.

The question was:
Would it be a good strategy for India to borrow trillions(or whatever is available) of dollars?

And my answer was:
It could be a great move if:
- India borrow in Dollars
- Buy immediately another solid currency as “Euros” with those borrowed Dollars
- And by keeping the original debt in Dollars, is expected that Debt will have a value decrease automatically if India previously converted those financial assets to another currency as “Euro”.

Note that although European Central Bank also pumped some millions of Euros to the market, it wasn’t even close of the sum that American Federal Reserve pumped into the market, so it is expected that Dollar depreciate more to the Euro.

To all Americans that read this, Dollar depreciation also could bring good news for you.

Although the goods that America imports are going to be more expensive, your products made in America will look cheaper to the rest of the world, and so is expected a increase in your exports, boosting American Economy.

However there is a great risk that with dollar depreciation, America Demand worldwide will decrease even more and that could affect other economies that are dependant of their exports to the US, creating a “Domino effect” of recession worldwide.

In my opinion, with globalization, fewer countries are exclusively dependant of one country to export their goods, and so, with the actual economic scenario almost all countries will suffer a little with America demand decrease, but only a few countries will suffer a lot, and probably that will not generate a “Domino effect”.

Should the Government Increase the Minimum Wage? Why or why not?

Increasing the minimum wage is a popular political policy that is 95% financially supported by the private sector, because usually, the minimum wage employees work in the private sector. So, it can be an evil mean of government propaganda (government receives appreciation from the electors but it is the private sector that pays the bill).

There are arguments in favour and against of this kind of policy.

In favour:
- Many political deciders and some “left wing” economists believe that corporations are always looking to exploit the employees, specially the less skilled employees, which have less job options, therefore even with big profits, corporations don’t care enough by those employees in the bottom of the structure.
- By increasing some people’s income, it will have a good effect on consumption increase, therefore stimulating the economy.

Against:
- Increasing the minimum wage will affect much more the smaller companies than the big ones. And smaller companies are already under pressure by companies from other countries with cheaper labour costs. It is expected that some smaller companies cannot afford the extra cost and will loose competitiveness in the market, and could even close their doors. The final result of minimum wage increase could be unemployment increase, therefore contributes negatively to the economy, because it will generate less consumption and increase government welfare costs with unemployed people.

My opinion:
- Both arguments have merit, therefore it is a question of when is more appropriate to increase the minimum wage, achieving the purpose of the policy with minimum effects on unemployment.
The answer of "when" depends of each country economic status, but surely that minimum wage increase is a bad policy during an economic downturn, because it will contribute even more for the downhill.

What measures should small businesses take to weather this economic downturn?

I believe that the answer for small and also to bigger businesses is:
1) Increase their Market Orientation skills
2) Review their Costs Structure

1)Increase their Market Orientation skills
Many businesses fail to acknowledge of where the market is heading, and also don’t realize that economy is not frozen in time, and the value bubbles through the Production->Market Chain are constantly changing result of macro and micro factors.
So, before investing, Managers should analyze better if their expectations meets the market trend.

2) Review their Costs Structure
Considering two types of costs:
Variable costs – Which increase or decrease, according to the increase or decrease of business volume (or in another word, of “sales”)
Fixed costs – Which remain the same, even if the business volume decrease.
Companies usually increase their fixed costs, when the “economic weather” is good, and forget that all economies evolve in cycles, and economic storms will happen.
Like Romans use to say, “In time of peace, we prepare for war”, in economics, the sentence is also applied as “in time of good economic periods, we should prepare for harsh economic periods.”
So, all businesses should invest more in solutions (human, technological, infrastructure) that will allow accomplishing two goals:
a) Increase their performance and efficiency.
b) Decrease the weight of fixed costs, on the company cost structure. By doing that, companies will perform better with “good economic weather” and will cruise through “economic storms”.