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

Source: Wikipedia, the free encyclopedia.

The video game industry has been substantially impacted by the COVID-19 pandemic in various ways, most often due to concerns over travel to and from China or elsewhere, and delays in the manufacturing processes within China.

Overview

In contrast to many other economic sectors that are drastically affected by the pandemic, the video game industry has been more resilient. 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 arisen.[1] With many people globally at home and unable to work, online gaming has observed 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] that helped boost revenues for many companies in the gaming industry.[3][4]

There have still been negative impacts on the industry, notably with major trade events like 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] 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]

As the origin of the pandemic, China is expected to impact the supply chains for electronics, which may limit hardware availability once the pandemic begins to be resolved. However, it did not impact plans for Microsoft and Sony to release the Xbox Series X and PlayStation 5 respectively in Fall 2020.[7]

Cancelled or affected industry events

Many trade events and expositions for the industry were cancelled or postponed due to bans against public gatherings during the pandemic. E3 2020 was cancelled by March 2020 by the Entertainment Software Association (ESA).[8] On 11 March 2020, the ESA affirmed that they cancelled the physical event as they were looking to arrange for virtual presentations from its exhibitors,[9] but by April 2020, they determined that the logistics of arranging a virtual event was too difficult due to disruptions from the pandemic, and cancelled the event in 2020, with plans in place to return in 2021. The ESA offered the E3 website to help partners support product announcements in lieu of E3's cancellation.[10] Additional events were arranged to substitute for the trade event, such as Geoff Keighley arranging 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.[11]

Other cancelled or postponed events included:

  • The Taipei Game Show, planned from 6–9 February 2020, was postponed until 25–28 June 2020,[12][13] but was cancelled in March 2020 due to pandemic's escalation.[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]
  • Several vendors withdrew or scaled 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]
  • Several companies pulled out from the Game Developers Conference (GDC) in San Francisco in March 2020, forcing the organizers to postpone the show to later in the year.[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, were moved to a live streamed event due to concerns over the pandemic.[23]
  • Gamescom, which was 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. Gamescom Asia, which was to be held in Singapore, was postponed to 2021.[24][25][26]
  • TennoCon 2020 was cancelled.[27][failed verification]
  • Paris Games Week, planned for 23–27 October 2020, was cancelled.[28]
  • Tokyo Game Show that was scheduled to run 24–27 September 2020, was cancelled, though online events were held in its place.[29]
  • EGX 2020, planned for 17–20 September 2020, was cancelled, though online events were held 12–20 September 2020.[30]
  • Insomnia66, set to take place 10-13 April 2020 at the NEC, Birmingham was cancelled in March 2020[31]
  • COMPUTEX Taipei 2020, planned for 2–6 June 2020, was postponed to 28–30 September 2020,[32] but was cancelled in June 2020.[33]
  • The 2020 BlizzCon was cancelled.[34]
  • Brasil Game Show 2020, which was planned for 8–12 October 2020, was cancelled.[35]
  • South by Southwest in Austin, Texas, was cancelled,[36] though the SXSW Gaming Awards were still awarded though an online announcement in March 2020.[37]
  • Emerald City Comic Con planned for Seattle, Washington, in March was cancelled.[38]
  • TwitchCon Europe and TwitchCon US were cancelled.[39][40]
  • Minecon was cancelled.[41]
  • The 25th QuakeCon event, planned for Dallas, Texas in August.[42]
  • The San Diego Comic Con, planned in July 2020, was cancelled.[43]
  • The 17th annual Touhou Project dōjinshi convention (Reitaisai) planned in Tokyo, Japan, first planned on 22 March 2020, was postponed until 17 May, before being cancelled on 12 April,[44] five days following the initial announcement of a state of emergency made by the Japanese government.[45]
  • Comiket 98, a dōjinshi convention held in Japan, was cancelled.[46]
  • 2020 Gaming Community Expo scheduled for Orlando, Florida, in June was cancelled. The event moved online as a charity marathon.
  • PAX West 2020, originally scheduled for 4–7 September 2020 and PAX Australia 2020, originally scheduled for 9–11 October 2020, collaborated with EGX to host PAX Online x EGX Digital, which was held 12–20 September 2020.[47]
  • The 2021 Japanese Amusement Expo (JAEPO) was cancelled in an 1 October 2020's announcement.[48]

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 events to either become cancelled or switch to a fully online format for 2020:

  • 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 would be split into two regions: Europe and North America. The regular season and the finals were played entirely online.[49]
  • The competitions for non-rhythm games of the ninth season of Konami Arcade Championships (KAC), which were to be held from 22 and 24 February at e-sports GINZA Studio, were postponed indefinitely. This did not affect the competitions within Konami's Bemani franchise, as they were held earlier that month at the Japan Amusement Expo.[50] On 16 December, Konami announced that the tenth season in 2021 would restrict participation to Japanese players only instead of worldwide as it has been traditionally done since 2012 (which include South Korea, Asia and United States), as a result of the travel restrictions set by the Japanese government; in addition, the finals that were to be held on 6 and 7 March 2021, would be in the GINZA Studio, behind closed doors.[51] On 7 January 2021, Konami extended the qualifying period for the 10th tournament indefinitely while the finals were postponed.[52] On 8 February 2021, Konami announced the 9th tournament would be cancelled.[52] On 22 March 2021, a day after the state of emergency was lifted,[53] the qualifier rounds were announced to end on 20 April.[54]
  • 闘神祭2020 (Tōshinsai), a cross-arcade game tournament held in Japan that is co-organised by NTT-esports and Taito, was cancelled.[55] The finals initially scheduled from 16–17 May were postponed to 8–9 August.[56]
  • The Overwatch League, in its 2020 season and third overall, planned to implement a more traditional home/away approach to regular league players, 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, which included 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.[57][58][59][60]
  • The League of Legends Rift Rivals and Mid-Season Invitational tournaments were cancelled, with the latter being replaced with the 2020 Mid-Season Streamathon,[61][62] while 2020 World Championship would be played exclusively in Shanghai using the "isolation bubble" environment.[63] In addition, majority of regional leagues, including League of Legends Championship Series and the League of Legends European Championship were either played in arenas without audience or switched to online formats.[64][65] Due to national travel restrictions, esports teams of Vietnam Championship Series could not participate in the 2020 World Championship[66] and 2021 Mid-Season Invitational.[67]
  • The 2020 Pokémon World Championships was cancelled by The Pokémon Company including its North American (scheduled for 26–28 June) and global (scheduled for 14–16 August) events.[68]
  • The 2020 Nürburgring World Tour, a live event of the 2020 FIA-Certified Gran Turismo Championships season, was cancelled after the 2020 Nürburgring 24 Hours was postponed by the organizers to September.[69] As the online season had begun on 17 March, the decision was made to change the stage that was planned to end on 18 April an "exhibition stage", and to restart the season on 25 April.[70] 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.[71] Consequently, the regional and world finals for the series were held as online-based events.[72]
  • The live Rocket League World Championship for its 9th season, planned for 24 April 2020 in Dallas, was indefinitely postponed.[73]
  • The 2020 Fortnite World Cup was cancelled.[74]
  • The International 2020 tournament for Dota 2, set to be held in Stockholm in August 2020, was postponed indefinitely before being pushed back a year and rebranded as The International 2021.[75][76] That event was held in Bucharest in October 2021 but only included teams, production staff, and other essential personnel.[77]
  • Evo 2020, set to be held in Las Vegas near the end of July, was cancelled. Online events were scheduled before the entire tournament was cancelled due to sexual abuse allegations against its co-founder.[78][79][80]
  • Mobile Legends: Bang Bang Southeast Asia Cup (MSC) 2020, set to be held in Philippines on 12–14 June 2020, was cancelled.[81]
  • Arena of Valor World Cup 2020, set to be held in Vietnam, was cancelled.[82]
  • Free Fire Champions Cup 2020, set to be held in Indonesia in April 2020;[83] and Free Fire Worlds Series 2021,set to be held in Mexico, were cancelled.[84]
  • The Asia-Pacific Predator League 2020 was postponed to Spring 2021. All of the qualifying teams during the event were to participate in the finale in 2021.[85]
  • The Teppen World Championship 2020 was held entirely online.[86] Offline tournaments meant to qualify players to the finals were cancelled due to the pandemic.[87]

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.[89] On 14 June 2020, the BBC reported that about 22 million sports viewers turned to virtual races when lockdowns were implemented. Questions over the future of esports rose with Formula 1 returning in July 2020.[92][93]

Hardware production

  • Nintendo Switch production in Vietnam had been scaled back due to reduced supply of components out of China because of the quarantines. As a result, supplies for the Switch were significantly reduced in Japan.[94] In its annual report issued in May 2020, Nintendo believed that production would resume normal levels within a few months.[95] 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.[96]
  • 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.[97]
  • Konami delayed release of the TurboGrafx-16 Mini in March due to production chain issues in China due to the pandemic.[98]
  • Atari delayed the Atari VCS that was initially supposed to release in March 2020 because of the pandemic.[99]
  • Microsoft did not anticipate any delay in the planned release of the Xbox Series X console, according to Phil Spencer as of April 2020. He stated that some games expected near launch may be delayed as a result.[100]

Sales

Generally, sales of video games have increased as a result of stay-at-home and lockdown orders from the pandemic, as people turned 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, and video game hardware up by 63% – which included 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. An increase at this point, near the planned end of the eighth generation of video game consoles,was unusual and was attributed to the pandemic.[101][102] By July 2020, NPD Group reported that the total sales of video game hardware and software within the United States in the first six months of 2020 reached US$6.6 billion, the highest since 2010.[103]

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

  • The 2012 game Plague Inc. by Ndemic Creations had a significant increase 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[who?] that those worried about the pandemic used the game to see that it could spread as a means to placate their fears.[104] 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.[105][106] Ndemic later 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.[107] The company also 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.[108]
  • The 2018 digital adaption of Pandemic by Asmodee experienced an increase in sales.[104]
  • 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.[109][101]
  • Ring Fit Adventure, which involves physical activity, was in high demand in China as a result of the quarantine. Sales led to shortages and price gouging in East Asia and nearby regions.[110] Similar shortages for the game expanded as quarantines and stay-at-home orders came to many Western locations during March 2020.[111]
  • Coupled with lowered hardware production, the Nintendo Switch became a high-selling commodity during the pandemic, as it provided entertainment options across all ages, especially with Animal Crossing: New Horizons. Nintendo worked to supply as many units as possible globally to most markets, which led to some resellers using bots to scalp.[112] The Switch's high sales helped to offset low sales of other console hardware within the United States and buoy higher revenues for the sector.[102]
  • Among Us rose in popularity through Twitch after streamer Sodapoppin popularised it through the platform in late July 2020.[113][114]
  • Minecraft Dungeons topped Animal Crossing on the North America eShop when they released their new DLC packs: Jungle Awakens and Creeping Winter. They also announced cross-platform features.[115]

Hardware and software releases

Game publishers and developers have expressed concerns that further extensions of the movement control orders from the pandemic may incur additional 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 have considered working from residence remotely to avoid troubling situations.[1] An example of this happend with the Western release of Persona 5 Strikers whose voice acting in English was meant to start in April 2020 but was delayed due to the pandemic. The actors later received audio equipment from Atlus so that they could work at home.[211]

Services

As much of the world's population have been quarantined due to the pandemic, video game playing and other Internet use has increased significantly. Steam had over 23 million concurrent players during March 2020, surpassing all previous records[212] while over three billion hours of content were watched on Twitch over the first quarter of 2020, a 20% increase from the previous year's.[213] 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.[214] GeForce Now capacity was temporarily exhausted in Europe before additional server capacity was added.[215]

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.[216] To help reduce demand during peak hours, the Akamai content delivery network for many video games[217] and major digital storefronts such as Xbox Live,[218] PlayStation Network,[219][220] and Steam[221] capped download speeds and encouraged the users to download at off-peak hours.

During quarantine and lockdown, Ubisoft announced an update for Just Dance 2020 to keep players active:[222] customers who owned the game could access a month of the Just Dance Unlimited service.[222] Ubisoft also announced in its official forum that the second event entitled "Power Gala", which was part of the second season "Feel the Power" in Just Dance 2020, had been postponed.[223] The developer explained that the company wanted to protect its team due to the pandemic, and that "although [their] team still work[ed] hard to make our servers work as smoothly as possible at home", this needed to be resolved by postponing the content.[223] Two tracks from Just Dance Unlimited were made free to make up for the delay.[224]

Retailers

  • 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, 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.[225][226][227][228]
  • CeX closed all its corporate stores in the United Kingdom on 23 March and asked the franchises to do the same.[229]
  • 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.[230]

Industry trade bodies

The Japanese game ratings body Computer Entertainment Rating Organization was forced to close operations from early April through 7 May, 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.[231][232]

Industry support of mitigation and relief efforts

Popular games during the pandemic

With the need to stay inside one's home to avoid infection, many gamers flocked to online games as a substitute for social interactions they would otherwise miss. Animal Crossing: New Horizons was especially particular, with people around the world turning to the game's recreation of ordinary daily life activities and social networking features as a substitute for the normalcy disrupted by the pandemic.[246][247][248][249] Fall Guys and Among Us were particularly popular during this time, with the former being released during the pandemic and the latter receiving a surge of popularity.[250][251][252][253] Some non-online games were also thematically compared to the pandemic, such as The Longing.[254] Microsoft Flight Simulator, first released in August 2020, has been considered popular during the pandemic, as many saw it as a safer alternative to traveling.[255][256][257][258]

Notable deaths

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