Analysts: Video Game Industry Becoming Stronger Due To COVID-19 Global Pandemic

By Abdullah Jawad

COVID-19 has already wrecked the global industries including the film industry and several others across the globe, there’s one industry that’s thriving because of this pandemic and that’s – video games industry.

While the majority of the companies in the USA and Europe are adopting the work-from-home policy for their employees due to COVID-19, we are beginning to see a significant increase in the concurrent online users across platforms such as dominating PC-platform – Steam.

As per a report from Redeye, a Swedish securities company, gaming is considered ‘a safe haven’ in these times. This analysts report also suggests that this pandemic could also find new players across the globe as they spend most of the time at their homes.

“Digital Entertainment, and in particular gaming, has become one of the safer bets since the coronavirus broke out. Admittedly stocks in this sector have plummeted like the rest of the global stock market but not in the same degree. According to us, this is a healthy sign in an overall unhealthy market. Gaming companies will likely benefit when more and more people are quarantined around the world. The world’s biggest platform for PC-games, Steam has increased in popularity the last weeks, and in China, the mobile game spending increased significantly during the outbreak a month ago.”

“We have summarized the business impact of the current Corona outbreak on gaming companies. Although the low impact on the business, the shares of gaming companies have dropped significantly. We find that the price declines are related to a lower investor risk appetite and sentiment in general, and not the earnings prospects of the companies. Thus, we view gaming as a safe-haven and will likely see an increased investor interest when the first dust settles from the major market correction we have seen.”

“We expect to see a neutral to a slight increase in business volume as an effect of the Coronavirus in the short-term for most gaming companies. We find that gaming, in general, is resilient to the economic aftereffects the pandemic might cause.”

“More long-term, the surge in usage might trigger more future users that previously weren’t playing games. Games are “sticky” products, so the search for entertainment during the isolation might trigger longterm usage/consumption of gaming products.”

While we’re seeing every major movie/film release being delayed or canceled, video games, on the other hand, haven’t seen any delay or canceled due to COVID-19. There were other reasons for some video games’ delay period. As for the yearly gaming conference such as E3, GDC, it was of best interest for consumers to cancel the event for health concerns.