Was the Pandemic gaming spike a fad?
Gaming in recent years has spiked with a substantial boom in the player base. The pandemic has only contributed to this, as a large influx of the population took up gaming during the global lockdowns. As we reach a saturation point, it is time to ask whether the spike in gaming was a long-term behavior or just another fad that will fade away soon.
Unfortunately, the expert opinion doesn’t look too good.
According to Zynga, the company saw a sharp decrease in its audience in 2021, even more than it estimated.
While it is easy to dismiss this as a one-off scenario, it’s not just one company. Gaming titans like Activision and Take-Two face the heat, with numbers slipping to the pre-pandemic level.
The rise of gaming in Covid
2020 made regular human activities and interactions impossible when Covid-19 started making waves around the world, impacting the lifestyle of every human being. Work-life, school, businesses were all drastically impacted, and the strict lockdown enforcement meant the majority of the population had to stay indoors.
The aftermath? A source of entertainment was inevitable, and the USA saw a whopping 46% increase in gamers during the pandemic, while Europe wasn’t too far behind, with France at 41% and the UK at 28%.
Even Twitch saw a more than twice increase in its viewership.
A Facebook study showed that there was a 50% increase in the mobile gaming numbers in the UK.
Can you blame them for choosing gaming as a pastime?
With tons of options ranging from Action-Adventure, Roleplaying, First Person Shooter, Survival, and options to play co-op and PvP with friends, there aren’t many activities that can hold up to gaming in terms of entertainment.
In 2020 the video game industry was valued higher than the movie and the North American sports industries combined!
Impact on the Industry
The pandemic boost of gaming helped skyrocket the gaming industry’s business, which sat at an estimate of $180 billion in 2020.
Almost half of the revenue is driven by mobile gaming, where in-game purchases are amongst the most successful income streams, especially for games with the initial freemium model. Even with PC and console games, the games, in general, have seen a fall in sales, but it’s the in-game purchases that drive the revenue for the publishers.
This meant the e-sports had a magical run in the pandemic, with loot-boxes and skins churning gold and accumulating a lucrative revenue.
Video game consumption also played a significant role in boosting the reputation of E-sports.
In the US alone, video game spending reached $45 billion last year. The advantage of having new players is — they generally tend to spend more than the existing players who are familiar with the game mechanics. Only 23% of US players spend on in-game purchases in the US, whereas 41% of new players did the same!
For example, when Rockstar Games gave away GTA 5 for free last year on EPIC, it may have seemed like an unwise move from their part to the average person. But the GTA Online aspect is where they planned to make a fortune. The new player in GTA online can get overwhelmed with the options, businesses, vehicles, and the economy, which may motivate the player to purchase Shark Cards, Rockstar’s microtransaction, which provides the player with in-game money.
This is just one game. The mobile gaming market is filled with games that run on the microtransaction model.
Furthermore, consoles like PS5 and Xbox series X have also played a crucial role in the gaming industry’s revenue surge, bringing a hardware sale increase of 58% from the previous year.
According to a survey conducted by the NPD group, Activision Blizzard and Nintendo, 79% of its respondents started playing video games just since the Covid breakout and the ensuing lockdown in March with an average playtime of 14 hours a week.
Post pandemic possibility
Publishers and developers were preparing for a slight decrease in the numbers as the pandemic was easing up, and so were the lockdown norms.
The pandemic had cut people’s access to the activities that involved going out and spending money, which meant that money was available for gaming expenses.
Sporting events, dining out and going to the cinemas were some activities the people couldn’t do during the lockdown.
Now that a large portion of the population has relaxed restrictions and reopened doors, how will individuals spend their time and money on gaming?
Higher hardware sales during lockdown have put a gaming ecosystem in place, even amongst previously uninterested gamers. When someone has invested a decent amount of money in gaming hardware, exploring a good collection of games for the said hardware is a natural phenomenon. This means there shouldn’t be a significant downhill decline in the gaming numbers compared to the pandemic figures.
Gone are the times when graphical limitation was the reason for publishers and developers to downgrade the quality of the games. Neither can they blame the measly gamer population, now that even non-gamers have invested in the latest generation of gaming hardware.
PlayStation 5 and Xbox Series X have closed a significant gap of hardware discrepancy, bringing the performance closer to PC levels. Meanwhile, PC makes strides in the horsepower department, with RTX set to become a norm in the coming years. Developers can now take advantage of technology and bring in the best-looking games for platforms, with no holds barred.
Gaps in the industry
Cutting edge hardware that you can’t buy
The industry has its share of shortcomings in not tapping the potential of the lockdown implications and the increased interest in games it brought amongst non-gamers.
There was a global hardware shortage, contributed by the semiconductor shortage. Then the hoarders used bots to buy out PlayStations and Nvidia’s 3000 series cards even before anyone could get their hands on it.
This meant the prospective end customers didn’t buy hardware, and it with it went the potential sales of games. The hardware shortage issue remains to this day.
Hoarders only buy it to sell it at a bumped-up price and a fat margin of profit, which brought an uneven imbalance to the whole gaming ecosystem, leaving many fans raging with fury.
Companies like Walmart succeeded in blocking 20 million attempts from bots to buy PlayStation 5 in just 30 minutes after it went on sale. And this is just the tip of the iceberg. These attempts are nothing in the grand scheme of hoarders using software automation to wipe out entire hardware inventories.
Never-ending delay of games
No, we are not talking about GTA 6. It’s not even announced yet. It may have benefitted the most if it was released during this pandemic and would have driven a ridiculous amount of hardware sales in consoles.
Instead, let’s look at a game like Halo Infinite, one of the most anticipated titles which should have been released in 2020. Not only would it have sold in record numbers, but it would have also further pushed the Xbox Series X sales for Microsoft, but the game is now set to release in December 2021.
While hardcore gamers and fans will still go ahead with the purchases (Pfft, casual. Ever heard of preorder?), the potential missed during the pandemic for many games like this is a precious lost opportunity.
On the one hand, developers shouldn’t have to crunch to get releases on the announced period, but on the other hand, it is also a scenario for speculation of what could have been.
A delay is sometimes inevitable, but when a game is pushed, the entire timeline gets affected with setbacks in rolling out updates, DLCs and expansion passes.
But a delayed game that works well is better than a rushed game that doesn’t.
The post-pandemic gaming decline isn’t a bubble that will burst
While many companies report a decline in numbers to a pre-pandemic level, it is premature to conclude this. Variety is essential for a person’s mental well-being, especially gamers. People who got into gaming during the pandemic may need some time for activities they might have missed last year. It doesn’t mean they won’t get back into gaming.
Having been indoors for more than a year now, people obviously would like to venture out and refresh with the restrictions being eased.
Gradual adoption is always better, and gaming will eventually get better mileage from the gamer, which is what the industry needs. A person who gets into gaming and gradually grows as a gamer will contribute to the industry over time compared to someone who simply follows a trend.