Don't mind me, I'm no expert, I'm just thinking out loud.

The dollar has been falling harder than Britney Spears after a binge drinking session in the last few years. 5 years ago the American Dollar and the Euro were even; now a dollar is worth 68 Euro cents . It doesn't look that ugly against the Yen, but the Dollar has lost more than 10% of its value against the Yen since July. The falling Dollar seems to be the result of the collapsing housing market and the growing national debt and trade deficit.

Now, if this pattern continues for a while and doesn't turn into a full on economic depression or global economic crisis (which could happen), what this will mean and has meant thus far is that exporting American-made products will become cheaper, and buying imported goods will be more expensive for Americans. Games developed in the United States will be cheaper to export to the rest of the world, while games developed in Japan, Europe, or Canada will have a higher development cost relative to how much they will try to sell the game for in the U.S.

For software publishing this can be a pretty big deal, since most of the budget into making a video game usually occurs in the same country as a publisher. If Nintendo sells a million copies of a game in the states and gets $50 million in revenue, which comes out to about 5.5 billion yen today. A few months ago, it would have been 6.1 billion. This is money that doesn't go into the publishers pocket, doesn't go into developing new games, doesn't go into promoting games, and doesn't go into hiring new staff, or if the company isn't doing so well, keeping the staff you already have. This is even worse for European publishers. If Ubisoft develops a game from their studios in the Paris suburbs and sells a million here in the states, they get €34 million instead of the €50 million they would have got 5 years ago.

This equation is probably a little simplified in this age of global media consolidation, with EA having a stake in Ubisoft and Vivendi eating Activision, Blizzard, and Sierra, but I think it will have an effect on the publishers, especially American and European ones. American publishers get extra revenue from selling games abroad and European ones get less from selling to the important American market. Japanese publisher will also get less from selling to the American market, but the impact will be smaller because Japan seems to be less reliant on the U.S. gaming market than Europe.

Of the big three hardware companies, Microsoft seems to be the greatest benefactor here. With apparently the largest proportion of American publishers and developers in their stable, the publishers for those companies will benefit from this situation and will have more money to develop games. I doubt this will help them get a much of a foothold in Japan, but in the USA, Canada, and Europe this can work to their advantage.

Well, there were probably much more important things to write related to the falling dollar, but this is a video game site, so here we are.