COVID-19: Video game industry doing well, but all is not rosy for consoles
The stay-at-home economy is booming as millions around the world stay at home to avoid the brunt of the COVID-19 pandemic, and consequently, some industries are seeing growth while others stagnate.
The video gaming industry is one which many may have expected to perform well throughout lockdowns, but according to new research from GlobalData, it’s not all rosy, and some of the biggest industry hard-hitters may suffer in 2020.
While COVID-19 will have a short-lived positive impact on gaming in general, console manufacturers, in particular, will likely lose a huge amount of potential revenue.
According to the report from GlobalData, Sony is the most exposed, because games such as the widely-anticipated The Last of Us Part II and Iron Man VR have been delayed indefinitely.
Sony’s blockbuster launch of its new console, the PS5, is not expected to happen during the holiday season in 2020, representing a significant blow to potential sales.
The Electronic Entertainment Expo (E3) has also been cancelled, the industry’s single biggest trading event of the year, where games and consoles are launched and ground-breaking partnerships announced.
Microsoft and Nintendo, alongside Sony, will bear a significant portion of the COVID-19 brunt as supply chains are interrupted.
“Trade events where new consoles and games are launched have been cancelled, hardware and software production has been delayed, and dozens of esports tournaments have been cancelled, postponed or run behind closed doors,” says GlobalData senior analyst of thematic research Rupantar Guha.
“In addition, game art designers are operating below capacity, network providers are struggling to keep up with demand, and several independent developers face an existential threat.”
Of course, it’s not all doom and gloom for video games, which have seen a significant bump in general sales and users.
“The lockdown in China caused a 39% increase in global mobile game downloads in February 2020, according to Sensor Tower,” says Guha.
“The number of concurrent users on the video game platform Steam hit 23.5 million by the end of March.
“Esports could also fill a hole for many sports fans, given the cancellation of live sporting events.”
GlobalData’s report reveals that long-term winners in the sector are Tencent, Epic Games, Valve and Activision Blizzard thanks to their well-performing games and distribution platforms.
The news comes as games market insights and analytics company Newzoo revealed yesterday the winners and losers in the industry in the wake of the pandemic.
The shooter genre has benefited the most from the stay-at-home economy, says Newzoo, rising 40% in March in player share when compared to December last year.
The report also revealed that fighting games and multiplayer online battle arena games (MOBAs) – such as League of Legends and Dota 2 – were the only two genres that the company covers which did not increase its player share in March.