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People are playing online video games more due to COVID-19, which is boosting console sales and streaming hours are skyrocketing on platforms like Twitch, according to experts.
Lewis Ward, research director of gaming at International Data Corporation, an analytics research firm, said there was a clear correlation between people staying at home due to COVID-19 and an increase in online gaming. He added that sales for consoles and gaming units will continue throughout the year even if many people have already purchased something.
“There’s still going to be a rise [in sales] because Q1 was low,” he said in an interview.
According to a Nielsen SuperData report that was released on April 22, global spending on digital games reached US$10 billion in March, an 11 per cent year-over-year increase from March 2019.
“Individuals are turning to games as a reliable entertainment option during the COVID-19 crisis and are using online multiplayer to keep in touch with others,” the report said.
The report also indicated that global console revenue rose 64 per cent from February to March, from US$83 million to US$1.5 billion.
Jayson Hilchie, president and CEO of the Entertainment Software Association of Canada, said in an interview that gaming companies of all sizes have told him that sales have incrementally increased.
“This is a positive for us right now. Most companies I’ve spoken to, their current and back catalogue sales are up,” he said. “People are locked indoors, or they’re at home...they want to connect with friends in any other way. I am very thrilled with the fact that so many people are using video games that way to do it.”
Of the major game consoles, Nintendo’s Switch (NTDOY), Sony’s PlayStation 4 (SNE), and Microsoft’s Xbox One (MSFT), all saw year-over-year sales increases in March, according to industry-tracking form the NPD Group.
“Hardware spending in March 2020 grew 63 per cent when compared to a year ago, to US$461 million,” NPD analyst Mat Piscatella said to VentureBeat, adding that “Nintendo Switch hardware sales more than doubled when compared to a year ago.”
The increase in sales has corresponded with skyrocketing numbers on Twitch, a video live streaming service that focuses on broadcasting esports competitions, and live online gaming.
In the first quarter of 2020, the company reported three billion hours of people watching streams and 121 million hours of streaming content.
IDC’s Lewis said in September 2019 there were 656 million hours of live Twitch stream hours, compared to 1.035 billion hours this past March.
Some of the most popular games include League of Legends, Fortnite, Counterstrike, Dota 2, GTA 5, Fifa 20, Overwatch, Apex Legends, and Minecraft.
Evan Kubes, president and co-founder of MKM Group esports, said in an interview that the esports industry has been able to take advantage of this opportunity to partner with major sporting leagues like the NFL, NBA, NHL, and MLB to offer online competitions.
“[These organizations] are using esports as a way to not only stay relevant but to engage with fans by launching their own tournaments,” Kubes said. “Both the NBA and the MLB have launched tournaments with their pro players playing respective games.”
He added that because of the shift to esports, it also gives a chance for marketers to put money into an industry that didn’t get that much ad revenue.
“[These organizations] were relying on billions and billions of dollars of ad revenue. And now you have all these brands and marketers sitting and asking ‘where am I going to spend my marketing dollars now? Where am I going to put all this revenue?’” he said.
“I read that now there’s a money bag of over $10 billion in ad revenue just sitting dormant waiting for someone to pick it up. The number one entertainment space for that to go to is going to be the esports space.”