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

The COVID-19 pandemic has had a substantial impact on the video game industry. The video game industry has been impacted by the outbreak in various ways, most often due to concerns over travel to and from China or elsewhere or related to slowdowns 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 generally more resilient to the pandemic. Most video game developers, publishers and operators have been able to maintain operations with employees working from home to sustain game development and digital releases, though as stay-at-home orders persisted, some productivity issues have arose. 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 social distancing, a practice recommended by the World Health Organization which has helped to boost revenues for many companies.

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. 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.

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 to release their next-generation consoles, the Xbox Series X and PlayStation 5 in the part of the year.

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. However, on March 11, 2020, the ESA affirmed that they cancelled the physical E3 show amid thew fears of the outbreak as they are looking to arrange for virtual presentations from its exhibitors. 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. 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.

Other cancelled or postponed events include:

• The Taipei Game Show, planned from February 6–9, 2020 was postponed until June 25–28, 2020, but was canceled in March 2020 due to the escalation of the pandemic.
• 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.
• The annual Vancouver Retro Gaming Expo has been cancelled [1].
• 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.
• 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. 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.
• 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.
• 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.
• The physical event of TennoCon 2020, which slated on July 11, 2020, was cancelled.
• Paris Games Week, planned in October 23–27, 2020, was cancelled.
• The physical Tokyo Game Show event from September 24–27, 2019 was cancelled though online events will be held in its place.
• Other game-related conventions, expositions and trade shows that were cancelled or postponed included:
  • South by Southwest planned in Austin, Texas in March, The SXSW Gaming Awards were still awarded though an online announcement in March 2020.
  • Emerald City Comic Con planned for Seattle, Washington in March,
  • TwitchCon Europe planned for Amsterdam in May,
  • The Minecraft Live 2020 event (Minecon) planned in Orlando, Florida in September 2020.
  • The 25th QuakeCon event, planned for Dallas, Texas in August.
  • The San Diego Comic Con, planned in July 2020.
  • The 17th annual Touhou Project dōjinshi convention (Reitaisai) planned in Tokyo, Japan, first planned on March 22, 2020 and later postponed till May 17. The 17th Reitaisai was cancelled on April 12, five days following the initial announcement of a state of emergency made by the government..
  • Comiket 98, another dōjinshi convention also held in Japan, planned on May 2-5, 2020.

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.
• 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.
• Another arcade tournament held in Japan, 闘神祭2020 (Tōshinsai), a cross-arcade game tournament co-organised by NTT-esports and Taito, postponed the finals from May 16-17 to August 8-9.
• 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.
• 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.
• 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.
• 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. 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. 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.
• The live Rocket League World Championship for its 9th season, planned for April 24, 2020 in Dallas was indefinitely postponed.
• The 2020 Fortnite World Cup was cancelled.
• The International 2020 tournament for Dota 2, set in Stockholm in August 2020, was postponed indefinitely.
• Evo 2020, set to be held in Las Vegas near the end of July, was cancelled. Online events will instead occur in its place.
• Mobile Legends: Bang Bang Southeast Asia Cup (MSC) 2020, set to be held in Phillipines on June 12 - 14 2020, was cancelled.

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:

• NASCAR launched its eNASCAR iRacing Pro Invitational Series on March 22, 2020, featuring NASCAR drivers competing using the iRacing game. The IndyCar Series launched its own IndyCar iRacing Challenge series as well.
• Major League Baseball partnered with Sony to create a short league for 30 professional players using the game MLB The Show.

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.

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. In its annual report issued in May 2020, Nintendo believed that production would resume normal levels within a few months. 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.
• 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.
• Konami delayed release of the TurboGrafx-16 Mini in March due to production chain issues in China due to the pandemic.
• Atari delayed the Atari VCS that was initially supposed to release in March 2020 due to the pandemic.
• 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.

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. 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.

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. 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. 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. 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.
• The 2018 digital adaption of Pandemic by Asmodee saw sales boosts.
• 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.
• 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. Similar shortages for the game expanded as quarantines and stay-at-home orders came to many Western locations during the month of March 2020.
• 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. 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.

Hardware and software releases

• The Evercade handheld console, originally due to release on May 22, 2020, will release between May 22–June 5, 2020.
• Several games were delayed due to the pandemic and the remote working conditions of developers, including:
  • The Outer Worlds for Nintendo Switch from March 6 to June 5, 2020.
  • Someday You'll Return from April 14 to May 5, 2020.
  • Hellpoint from April 16 to Q2 2020.
  • Trackmania from May 5 to July 1, 2020.
  • Marvel's Iron Man VR from May 15 to July 3, 2020.
  • The Wonderful 101: Remastered physical edition from May 19 to June 30 in North America and May 22 to July 3, 2020 in Europe.
  • Sword Art Online: Alicization Lycoris from May 21 to July 9 in Japan, and May 22 to July 10, 2020 in North America.
  • Ninjala from May 27 to June 24, 2020.
  • Fairy Tail, from June 25 to July 30, 2020 in Japan and Europe, and July 31, 2020 in North America.
  • E-School Life for Nintendo Switch and PS4, from June 25 to July 30, 2020 in Japan.
  • Kiss (Visual Novel) Trilogy for PS4 and Nintendo Switch, from June 25 to August 27, 2020 in Japan.
  • Death Stranding for PC from June 2 to July 14, 2020.
  • Wasteland 3 from May 19 to August 28, 2020.
  • The Last of Us Part II, from May 29 to June 19, 2020
  • Ghost of Tsushima, from June 26 to July 17, 2020
  • Little Witch Academia: VR Broom Racing, from June 2020 to late 2020 for Oculus Quest and early 2021 for PlayStation VR, Oculus Rift, and SteamVR
  • Rock of Ages III: Make & Break, from June 2 to July 21, 2020
  • Kerbal Space Program 2, from late 2020/early 2021 to late 2021.
  • Guilty Gear Strive, from late 2020 to early 2021.
  • Warframe Major Update, called Duviri Paradox, from 2020 to 2021.
  • The following were delayed to unspecified dates:
    • Dragon Marked for Death version 3.0 patch for Nintendo Switch, from April 21, 2020
    • Everyday Today’s Menu for the Emiya Family, the Fate/stay Night cooking adventure games, from May 2020 in Japan.
    • Kingdom Hearts: Dark Road, from early 2020
    • Monstrum physical edition, from May 22, 2020
    • Monster Hunter: World: Iceborne Title update 4, from May 2020.
    • Seven Knights: Time Wanderer, from June 2020
    • Star Wars Episode I: Racer Remaster for Nintendo Switch and PS4, from May 12, 2020
    • Yumeutsutsu Re:Master and Yumeutsutsu Re:After for PlayStation 4 and PlayStation Vita, from April 23, 2020
• Some games also received early releases in certain regions:
  • At GameStop in the United States, Doom Eternal was released a day prior to its official release date to separate the crowds from those purchasing Animal Crossing: New Horizons (As both games were officially released on March 20).
  • AFL Evolution 2 was released on April 16, 2020, a week prior to its original release date. To reduce physical contact, physical copies of the game were initially sold through online retailers only.
  • Final Fantasy VII Remake was shipped early to Europe and Australia so the players that are living in the "countries that are currently facing the biggest disruption" would be able to play the game on its launch day.

Game publishers and developers have expressed concerns that further extensions of the lockdown 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 social distancing. Another factor may rise from any possible delays in the release of the next-generation of console hardware (PlayStation 5 and Xbox Series X) due late in 2020, as some publishers would only want to release milestone titles alongside these console releases.

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 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. 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. GeForce Now capacity was temporarily exhausted in Europe before additional server capacity was added.

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. To help reduce demand during peak hours, the Akamai content delivery network for many video games and major digital storefronts such as Xbox Live, PlayStation Network and Steam 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.
• CeX closed all its corporate stores in the United Kingdom on March 23 and asked the franchises to do the same.
• 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.

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.

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.
• 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.
• 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.
• 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. The event raised over US$400,000.
• 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. Over 200,000 bundles were sold raising over US$6.5 million for the charities.
• 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.
• 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.
• Some game developers and publishers pledged to donate revenue generated by purchases to COVID-19 relief efforts:
  • Rockstar Games will donate five percent of revenue generated by in-game purchases in Grand Theft Auto Online and Red Dead Online in April and May 2020.
  • iNK Stories will donate 25 percent of revenue from sales of the Steam version of Fire Escape.

Notable deaths

• John Horton Conway, mathematician and creator of Conway's Game of Life.
• Rick May, voice actor; including Peppy in Star Fox 64, the Soldier in Team Fortress 2, and Dr. M in Sly 3: Honor Among Thieves.