At the height of the pandemic, video games offered people solace in isolation. But now, with life slowly returning to pre-crisis normality and inflation soaring, gaming companies are feeling the pinch.
Manufacturers of consoles, accessories and software for games are experiencing the same post-pandemic impact as tech titans, who have experienced a business boom while fears of Covid-19 kept people close to home.
The bottleneck has been exacerbated by steep inflation spurring belt tightening and game fatigue after years of relying on indoor entertainment.
At the start of the pandemic, “people flocked to Twitch – streamers and viewers alike,” said Brandon Williams, who goes by the name “BWpaco” on Amazon’s platform where gamers broadcast video game action.
“But I’ve spoken to quite a few people who have stopped streaming because they’ve had burnout or because it’s not for them,” added the 30-year-old streamer.
“Or they haven’t had time since they went back to work in person.”
According to twitchtracker.com, Twitch viewership, which has skyrocketed during the pandemic, has declined but remains above where it was in 2019.
– Games still running –
Matt Piscatella, an analyst with market research group NPD, estimates that people in the United States will spend a total of about $55.5 billion on gaming this year, down from last year but still up 28 percent year-on-year of the 2019 pandemic.
US video game giant Activision Blizzard, which Microsoft is about to buy, reported that sales fell in the first half of this year as gamers spent less time playing its powerhouse Call of Duty.
Nvidia, the California-based maker of high-performance graphics cards popular with gamers, recently issued a profit warning due to “declining video game revenues.”
Even spending on mobile games is showing signs of slowing down, according to analysts.
“Higher prices in everyday spending categories like food and gas, the return of experiential spending like travel and attending live events, lower new game releases and continued shortages in the supply of new-gen console hardware likely contributed to the observed decline in the second quarter,” Piscatella said.
Omdia analyst Steven Bailey said delayed releases of much-anticipated titles like Starfield and Suicide Squad had also contributed to an inevitable “correction” to the pandemic boom.
– lurking –
The boost that new titles bring to video game sales is a wild card that will likely benefit the industry going forward, as gamers usually crowd to get their hands on hot releases.
Piscatella expressed hope that the video game market will stabilize in the coming year and then return to steady growth.
The rising cost of living due to inflation is forcing players to make decisions with their money, but that doesn’t mean they’re giving up the game, the analyst noted.
More than three-quarters of U.S. consumers play video games, and subscription services like Xbox Game Pass and PlayStation Plus help drive down costs, Piscatella said.
Pandemic effects on video game play transcend the economic arena and have led to a trend for gamers to seek “comfort” games that are collaborative rather than competitive.
The explosion of Nintendo’s Animal Crossing game dedicated to community building is an example of this phenomenon, with players banding together to obtain virtual cities.
And according to streamer BWpaco, viewers are listening to Twitch channels like a radio show while their attention is elsewhere.
“They’re just lurking,” the streamer said.
“I feel like things have opened up again now and people are busier, they have it on as background noise.”
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