Impact of the COVID-19 pandemic on the video game industry

Overview

In contrast to many other economic sectors that are drastically affected by the pandemic, the video game industry has been generally more resilient to the pandemic. Most video game developers, publishers and operators have been able to maintain operations with employees working from home remotely to sustain game development and digital releases, though as movement control orders persisted, some productivity issues have arose.[1] Further, with many people globally at home and unable to work, online gaming has seen record numbers of players during the pandemic as a popular activity to counter physical distancing for society, a practice recommended by the World Health Organization[2] which has helped to boost revenues for many companies in gaming industry.[3][4]

There have still been negative impacts on the industry, notably with major trade events like the E3 2020 cancelled or postponed which may have impacted relationships between the smaller developers and publishers. This has particularly impacted indie developers who typically use these events for face-to-face meetings with potential partners to gain funding and publishing support, and caused them to have to delay or cancel projects.[5] Further, many esport leagues had to alter plans for their games, transitioning from live events to remote play or cancellation altogether. Portions of the sector that relied on physical products, such as retail stores and peripheral makers, as well as those dependent on in-person activities such as quality assurance through playtesting, ratings evaluation, and marketing, also struggled with global stay-at-home orders.[6]

The origin of the pandemic in China is also expected to impact the supply chains for electronics for the year which may limit hardware availability once the pandemic begins to slow down. This may impact plans for Microsoft and Sony Corp. to release their next-generation consoles, the Xbox Series X and PlayStation 5 in the part of the year.[7]

Cancelled or affected industry events

Many trade events and expositions for the industry have been cancelled or postponed due to banned against public gathers during the pandemic. Of note, the largest trade event E3 2020 was ultimately cancelled by March 2020 by the Entertainment Software Association (ESA) after several weeks of doubt.[8] However, on March 11, 2020, the ESA affirmed that they cancelled the physical E3 show amid the fears of the outbreak as they are looking to arrange for virtual presentations from its exhibitors.[9] However, by April 2020, the ESA determined that the logistics of arranging a virtual event was too difficult due to disruptions from the pandemic, fully cancelling the show in 2020, but with plans in place to return in 2021. The ESA offered the E3 website to help partners to support product announcements in lieu of the E3 show.[10] Additional events have been arranged in lieu of E3, with Geoff Keighley having arranged a four-month Summer Game Fest with several game developers, publishers, and other industry leaders to provide announcements and game demos from May to August 2020 as a replacement for the E3 and other cancelled events.[11]

Other cancelled or postponed events include:

  • The Taipei Game Show, planned from February 6–9, 2020 was postponed until June 25–28, 2020,[12][13] but was canceled in March 2020 due to the escalation of the pandemic.[14]
  • The Mobile World Congress, to have been held in Barcelona, Spain in March 2020 was cancelled as several of the China-based vendors had to cancel plans.[15]
  • The annual Vancouver Retro Gaming Expo has been cancelled .
  • Several vendors withdrew or scaled the plans back to present at PAX East in Boston at the end of February 2020 including Sony Interactive Entertainment, Square Enix, Electronic Arts, Capcom, CD Projekt and PUBG Corporation.[16][17][18][19]
  • Similarly, several companies pulled out from the Game Developers Conference in San Francisco in March 2020, forcing the organizers to postpone the show until later in 2020.[20][21] However, the event organizers devised a scheme to run the GDC as a virtual conference following a similar schedule across the same set of days by using the streaming services with a subset of the planned events that are presented through the streaming media and was made available online a week later. This included the Game Developers Choice Awards and Independent Games Festival presentations.[22]
  • The 16th British Academy Games Awards, normally presented at a ceremony in London are moved to a live streamed event due to concerns over the pandemic.[23]
  • The physical 2020 Gamescom event, to be held in Cologne, Germany, was forced to cancel as Germany banned public events through August 2020 following the lifting of the initial lockdown, but organizers will move some portions of the event to be solely online. Also, the physical 2020 Gamescom Asia, to be held in Singapore, was postponed to 2021.[24][25][26]
  • The physical event of TennoCon 2020, which slated on July 11, 2020, was cancelled.[27]
  • Paris Games Week, planned in October 23–27, 2020, was cancelled.[28]
  • The physical Tokyo Game Show event from September 24–27, 2019 was cancelled though online events will be held in its place.[29]
  • COMPUTEX Taipei 2020, planned from June 2–6, 2020, was postponed to September 28–30, 2020,[30] but was canceled in June 2020.[31]
  • The 2020 Blizzcon event will not be held, typically in early November. Blizzard Entertainment will be looking for an online replacement but does not expect to have this until early 2021.[32]
  • Brasil Game Show 2020, which planned from October 8–12, 2020, was cancelled.[33]
  • Other game-related conventions, expositions and trade shows that were cancelled or postponed included:

Esports

Most esports events are based on online games, but are typically played in local arenas to reduce network latency between players as well as to provide an audience. The pandemic caused many of these vents to either become cancelled or switch to a fully online format for the year:

  • ESL Pro League Season 11, a Counter-Strike: Global Offensive tournament was originally going to be an offline event with the finals taking place at Denver, Colorado, United States. However, due to the pandemic, ESL announced that the both the regular season and the finals will be split into two regions: Europe and North America and that regular season and the finals will be played entirely online.[44]
  • The 9th Konami Arcade Championship, an annual arcade esports tournament due to be held between February 22 and 24 in e-sports GINZA Studio (non-Bemani arcade titles only) was postponed indefinitely. Bemani arcade titles are not affected as the finals were held on February 1, 2 and 8.[45]
  • Another arcade tournament held in Japan, 闘神祭2020 (Tōshinsai), a cross-arcade game tournament co-organised by NTT-esports and Taito, was cancelled.[46] The finals initially scheduled from May 16–17 and postponed to August 8–9.[47]
  • The Overwatch League, in its 2020 season and third overall, was planning to implement a more traditional home/away approach to regular league player, with teams travelling across the globe to various homestead events for matches. With the pandemic, numerous changes to the league's plans had to be implemented, including switching to online matches, reworking the teams' distributions in divisions as some teams were forced to suspend operations, cancelling certain mid-season events, and otherwise reducing the planned schedule of play.[48][49][50][51]
  • The League of Legends Championship Series and the League of Legends European Championship were temporarily suspended on March 13 and resumed play as an online-based format on March 20.[52]
  • The ongoing series of the 2020 Pokémon World Championships was cancelled by The Pokémon Company including its North American (scheduled for June 26–28) and Global (scheduled for August 14–16) events.[53]
  • The 2020 Nürburgring World Tour, a live event of the 2020 FIA-Certified Gran Turismo Championships season, was cancelled after the motorsport event it was supposed to coincide, the 2020 24 Hours Nürburgring, was postponed by the organizers to September.[54] As the online season had already began on March 17, the decision was made to change the stage that planned to end on April 18 an "exhibition stage", and to restart the season on April 25.[55] A teaser trailer for the restarted season indicated that no further live events would be held, having held only one live event in Sydney, Australia.[56]
  • The live Rocket League World Championship for its 9th season, planned for April 24, 2020 in Dallas was indefinitely postponed.[57]
  • The 2020 Fortnite World Cup was cancelled.[58]
  • The International 2020 tournament for Dota 2, set in Stockholm in August 2020, was postponed indefinitely.[59]
  • Evo 2020, set to be held in Las Vegas near the end of July, was cancelled. Online events will instead occur in its place.[60][61]
  • Mobile Legends: Bang Bang Southeast Asia Cup (MSC) 2020, set to be held in Phillipines on June 12–14, 2020, was cancelled.[62]
  • Arena of Valor World Cup 2020, set to be held in Vietnam, was cancelled.[63]
  • Free Fire Champions Cup 2020, set to be held in Indonesia on April 2020, was cancelled.[64]

On the other hand, while many traditional physical sports games, seasons, and playoffs were cancelled due to the pandemic, the organizing leagues turned to video game equivalents as alternative entertainment, using the professional athletes from their leagues within the games. Some examples of this included:

Television networks which normally would have shown the sporting events that were cancelled have turned to both these replacement sports programs as well as other esport tournaments as replacement programming during the pandemic.[66] On June 14, 2020, BBC reported that about 22 million sports viewers turned to virtual races when lockdown was put into place. Questions over the future of esports are rising with Formula 1 returning in July 2020.[68][69]

Hardware production
  • Nintendo Switch production in Vietnam had been scaled back due to reduced supply of components out of China due to production slowdown from the quarantines. As a result, supplies of the Switch were significantly reduced in Japan and with retailers fearing similar shortages in Europe and North America.[70] In its annual report issued in May 2020, Nintendo believed that production would resume normal levels within a few months.[71] Further, Nintendo of America closed its repair center as a preventative measure. The company's headquarters in Redmond, Washington and the flagship store in New York City were also closed.[72]
  • Valve announced that its production on the Valve Index virtual reality headset was reduced due to the impact of the pandemic and would have fewer shipments expected than planned by the release of Half-Life: Alyx.[73]
  • Konami delayed release of the TurboGrafx-16 Mini in March due to production chain issues in China due to the pandemic.[74]
  • Atari delayed the Atari VCS that was initially supposed to release in March 2020 due to the pandemic.[75]
  • Microsoft did not anticipate any delay in the planned release of the Xbox Series X console, according to Phil Spencer, as of April 2020, though did state that some games expected near launch may be delayed as a result.[76]

Sales

Generally, sales of video games have increased as a result of stay-at-home and lockdown orders from the pandemic, as people turn to video games as a pastime.[1] The NPD Group reported that video game sales in North America in March 2020 were up 34% from those in March 2019, video game hardware up by 63% - which includes more than twice the number of units of the Nintendo Switch console. Net spending across the first quarter of 2020 in the United States reached US$10.9 billion, up 9% in 2020 compared to 2019 according to NPD. Such an increase at this point, near the planned end of the eighth generation of video game consoles, is unusual and attributed to actions of the pandemic.[77][78]

Some specific examples of game software and hardware sales affected by the pandemic include:

  • The 2012 game Plague Inc. by Ndemic Creations saw a large boost in sales as a result of the pandemic. The game temporarily became the top-paid app on several regional app stores, beating out the perennial bestseller Minecraft. Some analysts believed that those worried about the pandemic used the game to see that it could spread as a means to placate their fears.[79] While the game was based on scientific models of the spread of contagious diseases, Ndemic had to remind the players that the game was not meant to be taken as an accurate model for transmission and spread and referred those interested to the Centers for Disease Control and other national and international health organization websites.[80][81] Later, Ndemic added a new gameplay mode to Plague Inc, with the goal to try to stop an ongoing pandemic through various possible options by using the work that it developed in coordination with WHO and the Global Outbreak Alert and Response Network.[82] Further, Ndemic donated US$250,000 to the Coalition of Epidemic Preparedness Innovations and the WHO COVID-19 Solidarity Response Fund to help fight the pandemic and encouraged the players of the game to do the same.[83]
  • The 2018 digital adaption of Pandemic by Asmodee saw sales boosts.[79]
  • Both Doom Eternal and Animal Crossing: New Horizons, major AAA titles released in March 2020, outperformed industry expectations, with Animal Crossing selling more in its opening week in the United Kingdom than all of the previous launches in the franchise combined for the same region.[84][77]
  • Ring Fit Adventure which involves physical activity by using special accessories saw high demand in China as a result of the quarantine as the residents sought something for physical activity, leading to shortages and price gouging in east Asia and nearby regions.[85] Similar shortages for the game expanded as quarantines and stay-at-home orders came to many Western locations during the month of March 2020.[86]
  • Coupled with lowered hardware production, the Nintendo Switch also became a high-selling commodity during the pandemic, as it provided entertainment options across all ages, particularly with the release of Animal Crossing: New Horizons. Nintendo worked to supply as many units as possible globally to most markets, but this led to some resellers developing means through bots to identify when Switch units were back in stock at various storefronts, purchasing as many units as possible at list price and then reselling these at a higher markup.[87] High sales of the Switch helped to offset low sales of other console hardware within the United States and buoy higher revenues for the sector.[78]

Hardware and software releases

Game publishers and developers have expressed concerns that further extensions of the movement control orders from the pandemic may incur additionally delays. One major factor that may cause delays is the ability to capture voice acting without access to studios during physical distancing for society, even though some of members considering working from residence remotely to avoid troubling situations. Another factor may rise from any possible delays in the release of the upcoming console hardware for next-generation (PlayStation 5 and Xbox Series X) due late in 2020, as some publishers would only want to release milestone titles alongside these console releases.[1]

Services

Because much of the world's population is quarantined due to the pandemic, video game playing and other Internet use has grown greatly. Steam, the main digital storefront for personal computer video games saw over 23 million concurrent players during March 2020, surpassing all previous records[136] while the streaming service, Twitch saw over three billion hours of content watched over the first quarter of 2020, a 20% increase from the previous year's.[137] Microsoft reported a substantial increase in users of its Xbox Game Pass service in the months of March and April 2020 bringing it to over 10 million subscribers.[138] GeForce Now capacity was temporarily exhausted in Europe before additional server capacity was added.[139]

The additional bandwidth from video games and other Internet services created concerns that critical bandwidth would not be available for medical and other key infrastructure elements necessary to mitigate the spread of SARS-CoV-2.[140] To help reduce demand during peak hours, the Akamai content delivery network for many video games[141] and major digital storefronts such as Xbox Live,[142] PlayStation Network[143][144] and Steam[145] capped download speeds and encouraged the users to download at off-peak hours.

Retailers
  • The North American video game chain, GameStop and its Canadian subsidiary, EB Games came under criticism for its overall response to the pandemic. Notably, it received widespread criticism when, after numerous states and provinces issued "stay at home" or "shelter in place" orders requiring non-essential businesses to close up starting in March 2020, that it considered its stores an essential business, stating that they provided a "significant need for technology solutions". The chain later revised this decision, closing most locations and leaving only select stores open to provide drive-up delivery of online or by-phone orders to the customers.[146][147][148][149]
  • CeX closed all its corporate stores in the United Kingdom on March 23 and asked the franchises to do the same.[150]
  • Game X Change, a regional game retailer based in Arkansas, attracted criticism for keeping the retail locations open in areas with stay at home orders.[151]

Industry trade bodies
  • The Japanese game ratings body Computer Entertainment Rating Organization (CERO) was forced to close operations from early April through May 7, and upon reopening, implemented appropriate controls that reduced work hours, which is expected to delay some releases in Japan as they await a rating for retail release.[152][153]

Industry support of mitigation and relief efforts
  • Nintendo of America donated 9,500 N95-rated face masks for the first responders in the Washington state region in March after their facility was shuttered during Washington's stay-at-home program was in place.[154]
  • Twitch hosted a 12-hour charity stream on March 28, 2020 to raise money for the COVID-19 Solidarity Response Fund. The stream featured games, music and sports celebrities playing games such as Fortnite and Uno.[155]
  • Several game publishers worked with WHO to support its "#PlayApartTogether" campaign, encouraging the players to continue social engagement in video games via online games instead of through physical means. Eighteen companies initially joined the effort when announced in March 2020, and at least forty more had joined by early April.[2][156][157]
  • Games Done Quick, a charity-driven speedrunning event, had to move its planned June 2020 event due to the pandemic, but instead announced that it will run a fully online "Corona Relief Done Quick" event from April 17 to April 19, 2020 with money raised going to Direct Relief.[158] The event raised over US$400,000.[159]
  • Humble Bundle offered a "Conquer COVID-19 Bundle" of games and e-books from March 31 to April 7, 2020 with all proceeds going to Direct Relief, International Rescue Committee, Doctors Without Borders and Partners in Health.[160] Over 200,000 bundles were sold raising over US$6.5 million for the charities.[161]
  • The United Kingdom video game tradegroup, The Association for UK Interactive Entertainment (UKIE) worked with the UK's Department for Digital, Culture, Media and Sport to push the government's campaign of "Stay Home, Save Lives" into their members' video games that supported dynamic messaging like within in-game menu screens.[162]
  • Former Nintendo of America president Reggie Fils-Aimé and video games journalist Harold Goldberg will host Talking Games with Reggie and Harold, a seven-part podcast, to raise charitable funds for the New York Video Game Critics Circle to help mentor lower-income and under-served students in New York City impacted by the pandemic.[163]
  • Some game developers and publishers pledged to donate revenue generated by purchases to COVID-19 relief efforts:

Notable deaths

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