Playstation, Video Games, Xbox

How COVID-19 Has Affected the Video Game Industry

While many industries struggled to stay afloat in 2020, the video game industry thrived. With people staying home and many traditional entertainment venues, such as movie theaters, bars, sports stadiums and music concerts shut down, many people turned to video games for entertainment. Was boredom the only reason for the rise of the video game in 2020?

Gaming From Anywhere

There are more ways to play video games than ever before. In addition to traditional console systems that hook up to a television, a consumer can play a video game on their PC, laptop, smartphone, tough tablet or portable gaming system. Even with most people staying home, this versatility is important, because in the past, families who share televisions and computers might end up squabbling over whether a family member is going to get to watch Netflix or play “Fortnite,” but with so many options out there, the whole family can choose an entertainment option on their personal device.

Smart Marketing

The gaming industry didn’t rely on boredom and being trapped at home to drive consumers to their gaming platforms. They actively sought to hold gamers’ attention by hosting branded crossover events, recruiting celebrity influencers and putting on virtual concerts.

Continuing a Trend

Gaming was already growing before the pandemic hit. The rise of mobile connectivity, paired with a rapid increase in free-to-play games had already driven up consumer engagement with gaming platforms. The pandemic enhanced this trend. With many people struggling economically, the appeal of free-to-play games is pretty easy to understand. Additionally, many people sought to remedy the isolation brought on by social distancing by connecting with other gamers online. As many as 55% of people in the United States were gaming during COVID-19 lockdowns.

Variety of Motivations

Gamers across the spectrum reported a variety of motivations to play games during the pandemic. According to an April 2020 survey, about 56% played games to alleviate boredom or pass the time. 45% used video games as an escape from the real world. 36% turned to games as a substitute for other types of entertainment they couldn’t enjoy during COVID restrictions. 29% used games to communicate with friends and family and 26% played games to socialize with strangers.

Spending Increases

While some gamers turned to free-to-play games, such as “Fortnite,” to save money, others upped their video game spending during the pandemic. Game earnings increased a modest 6% in the early part of the year but jumped to a 14% increase as the pandemic progressed. Some of this new spending may be attributed to the release of two high-profile consoles. The PlayStation 5 and Xbox Series X both launched in November, a couple of months after Nintendo released a cheaper, portable only version of their popular console, called the Nintendo Switch Lite. Aside from the new consoles, spending likely increased because the more time people play games the more likely they are to purchase in-game items in free-to-play games or purchase new games to replace the old ones they have finished playing through.

Popularity of Gaming Video Content

Consumers didn’t just spend more time playing games in 2020, they also spent more time watching other people play them. More than 70% of Millennial gamers report that they watched GVC content online in 2020. GVC saw an 18% increase in growth and generated more than $9 billion in revenue.

Restrictions that closed many entertainment venues and kept people spending more time in their homes were a boon to the video game industry in 2020. It remains to be seen if the genre’s newfound popularity will continue beyond the end of the pandemic, but the industry’s overall long-term growth suggests it will.

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