The corona crisis has done the games industry no harm. When people have to stay at home, gaming is a popular pastime. For Sony and Microsoft, it means more buyers of the new game consoles that are for sale from this week.
One’s need is the other’s bread. When the population was caged in large parts of the world this year to prevent the spread of the corona virus, the games industry was one of the sectors that benefited from this. To enjoy themselves during the lockdown, consumers bought games and consoles on a large scale. That urge to buy worked wonders for the stock of game makers.
No wonder the stock prices of companies like Nintendo, Activision Blizzard (known from Call of Duty, World of Warcraft), Electronic Arts (FIFA) and Take-Two Interactive (Red Dead Redemption) plunged this week when pharmaceutical company Pfizer unveiled a promising vaccine.
The big question now, to stay in game terms, is the industry going up one level? Or is it game over? The games industry has had a great third quarter. The US, the most important market, posted a record turnover of 11.2 billion dollars (9.49 billion euros).
Console war
The outlook is not unfavorable. Last week, Microsoft and Sony added a new chapter to the console war. They have been fighting this battle for the game console since 2001, when the company behind Windows and Office ventured into a market that had until then been dominated by the Japanese, Sony and Nintendo. The latter company was able to report a tripling of its half-year profit last week thanks to the pandemic sales.
Microsoft introduced its Xbox Series X on Tuesday, Sony its PlayStation 5 on Thursday. Not that there is anything to order for Sinterklaas or Christmas: both game consoles have been sold out for weeks. That was done minutes after the presale had started.
Market researcher ABI Research thinks Microsoft and Sony will jointly sell 40 million of their new consoles by the end of the year. In just two months, they deliver 6 percent more game consoles than what was sold in all of 2019.
There are also high expectations about game sales. These are already entering the most profitable months of the year and on top of that are the effects of the lockdowns and the arrival of new game computers. A quarter more games were sold in the past three months. Sony saw a corona peak in the second quarter: it used 83 percent more games than in the same three months a year ago.
For the major publishers there may be cause for joy, for studios that make games, the pandemic is more of a double-edged sword. Unlike movies, it’s not uncommon for games to fail, and even repeatedly. The workload at the end of the journey is often enormous. The coronavirus makes that crunch time worse. In recent months, large games studios suddenly saw all their employees working from home or worse: getting sick. Dreamed blockbusters such as Deathloop, Cyberpunk 2077, Far Cry 6 and Halo Infinite have been postponed to 2021 for this reason.
The Netherlands
In the Netherlands, the small games sector keeps its head above water, according to a poll by the trade magazine Control among 56 companies. Of these, 37 did not request or were not eligible for government assistance. Almost 25 have postponed investments and the majority have delayed or had to cancel projects. Almost 50 of the 56 entrepreneurs think they will survive the corona crisis.
Working from home does cause some headaches here and there. “Not all hardware can be taken home just like that,” notes director Jurjen Katsman of the Utrecht studio Nixxes. “We miss the creative process at the start of a new project,” said Roderick Roode, director of Team6 in Control. Normally forty people work at the office of this Assense game studio. Even by the time a project has to be delivered, working from home takes revenge. Then the makers have to discuss a lot and test together. Roode: “This is now a lot more difficult.”
The industry’s eye is on the consumer who spends more time than ever on gaming, says Deloitte analyst Chris Arkenberg. The consultancy saw in studies that 34 percent of American gamers started doing more online during the lockdown, such as watching live streams. “The relationship to gaming changes from a pastime to an investment of time,” says Arkenburg. “This is the ideal time for studios, publishers, console manufacturers and games services to turn the more casual gamers into longer-term customers.”
