With the global economy in peril, family purse strings drawn tight, and doomsayers invoking America’s Great Depression, the consumer electronics industry lives in hope of the “Shirley Temple effect”.

From the Main Streets of middle America to the just-finished malls of emerging Asia, the theory has become mantra — the idea that just as the hard-up masses flocked to cinemas and watched Bright Eyes to take their minds off the economic miseries of the 1930s, their 21st century equivalents will slash household costs and spend their money on cheap, living-room based entertainment.

Toys always sell well in recessions and, with console owners now including millions of adults and the Christmas shopping season looming, the video games industry seemed squarely lined up for the Shirley Temple role. Even if a decent game costs £45, that works out substantially cheaper than a holiday abroad, or a new bicycle or dinner for four in a restaurant. And judiciously chosen, a game can keep its owner busy for hours on end, particularly now that the online element of some titles is more compelling than the main game.

Today it was Nintendo’s turn to ply its forthcoming wares to the international market and the presentation sharply divided analysts. The bulls on Nintendo saw a company in fine form — still innovating quickly and tightly focused on increasing the size of the global gaming population. The bulls saw the DSi console as a triumph and Wii Music as a sure-fire family hit.

For the bears, the presentation confirmed their growing disappointment with Nintendo: the DSi should have had a pre-Christmas launch in the US and Europe and Wii Music represents yet another gimmicky title with little to offer the serious gamer.

Nintendo’s display was its annual gun-spiking effort ahead of the far bigger industry jamboree on its doorstep next week. The Tokyo Game Show will see the rest of the industry fighting hard to persuade the faithful that it has not run out of ideas and innovation.

With no new consoles in the mix to confuse the market — Nintendo’s DSi is evolution rather than a new generation — this year’s showdown between Nintendo, Sony and Microsoft, say analysts, is really all about the games. Retailers everywhere are praying for some nice surprises: the usual admission of delays by the games studios will go down particularly badly.

But even with this golden opportunity in its grasp, it is by no means clear that the games industry is in peak condition. This year has produced a run of huge hits for various consoles, but some now doubt the industry has the collective pipeline of must-have titles that the buying public and the retailers crave.

Japan’s video game market has begun to contract dramatically — the last time sales were this bad was in the twilight years of the PS2 console and Nintendo’s disappointing GameCube. Figures from Enterbrain suggest that, compared with the same period last year, hardware sales in Japan declined by a third in the first six months of 2008. Software was down 11.3 per cent over the same period.

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