Google’s Vice President and General Manager Phil Harrison shows off the new Stadia controller as he speaks during the GDC Game Developers Conference on March 19, 2019 in San Francisco, California.
Justin Sullivan | Getty Images
The gaming industry is a natural marketing of social distance during the coronavirus pandemic. Video game and technology companies are actually working directly with the World Health Organization for a campaign to keep people apart. And technology giants who are relatively new to the video game industry, Facebook and Google, are making moves that show that it can be wise for them to use this opportunity with so many people at home to gain more share of the gaming market.
Facebook Gaming released a new feature this week that allows users to create tournaments with friends and the public, play each other ̵
Originally created for esports games, the feature, which works like creating an event on Facebook, lets users design tournaments that update brackets and leaderboards and raise money for charity, such as COVID-19 relief.
The idea is good for Facebook and its customers, according to Laurel Walzak, a professor at Ryerson University who specializes in gaming. “Facebook gives their audience an opportunity to engage with each other”, while the social media giant also creates “more loyalty to the brand.”
Alphabet’s Google meanwhile announced on Wednesday that it is offering consumers two free months of its higher end Stadia Pro game service, giving access to nine games, including the cult hit Destiny 2. Google launched Stadia in November last year for mixed reviews.
Free to play now
“If gaming companies will offer people free trials, they will integrate them into these services, helping them build relationships with customers,” Walzak said. “Not just people who are interested in it. But people who are looking for different forms of entertainment to participate in.”
Amazon, which owns Twitch, the most popular player livestreaming site, offers Amazon Prime subscribers and Twitch users five free games collectively worth more than $ 100, through May 1. The games include “Turok,” a reworked version of the 1990s shooting game and “Earthlock,” an indie role-playing game. Twitch has seen its use increase during the corona virus and as order-at-home orders around the US have increased.
“It’s an opportunity for gaming companies to put their brands in front of more people,” says media and streaming analyst Dan Rayburn. “The idea that they are providing services so that consumers can see how they are, will hopefully lead to a conversion with new subscribers or customers.”
Verizon has reported huge increases in gaming usage, as much as 75%, since the onset of the coronavirus outbreak in the United States.
In Italy, a major telecom company reported a fight to keep up with a 70% peak in its network, citing Fortnite games as a major cause.
It’s not just the tech giants who are taking advantage of the opportunity among Americans’ unmatched lockdown. Old media is also reaping big profits, and Disney reports on Wednesday that the new Disney + streaming service has over 50 million subscribers.
Traditional video game companies are trying to capture a larger share of the gaming market with new deals during the pandemic.
Ubisoft, for example, offered free downloads of its PC game “Rayman Legends” at the end of March, which traditionally sells for $ 19.99. Take-Two Interactive’s Rockstar Games announced at the end of March that they would donate 5% of their revenue online from their Grand Theft Auto and Red Dead Redemption franchise services to local communities and companies affected by the coronavirus outbreak.
And sports gaming companies, such as 2K Games (also owned by Take-Two Interactive), which produces the popular NBA 2K franchise, and Electronic Arts, which makes Madden football games, have teamed up with Disney’s ESPN and Fox Sports to create TV tournaments that feature popular athletes, such as Brooklyn Nets player Kevin Durant, and former pro quarterback Michael Vick – the winnings of these tournaments come to the COVID-19 charities.
WHO and players
The World Health Organization has partnered with several large companies in the gaming market and promoted a campaign entitled “Playing Each Other Together.” With the support of Activision Blizzard, Amazon Twitch, Riot Games, Alphabet’s YouTube games and other major players, such as Microsoft and Sega, the campaign encourages players to practice social distance at home by offering free special events, exclusivity and rewards for beloved games.
The gaming industry is one of the few that has performed well in the market during the pandemic. Game exchange trades outperform broad stock indices.
And games are still selling all over the world.
The latest installment in Nintendo’s Animal Crossing franchise, titled “New Horizon,” sold 1.8 million copies in the first three days of availability in Japan after being released on March 20. And the coveted war game “Call of Duty: Warzone”, launched on March 10, gathered 30 million players in 10 days. In some places, physical sales were made and customers stood together, despite public recommendations for social distance.
Players make a copy of Animal Crossing video games outside an EB Games store on Yonge St., in downtown Toronto, despite requests for distance and staying at home.
Andrew Francis Wallace | Toronto Star via Getty Images
“Gaming in general is fairly recessionary,” says Daniel Ahmad, a senior analyst at Niko Partners, who also expects the pandemic to increase 2020 revenue further. “More people playing during the year improve the final result.”
But that does not mean that the gaming industry has no coronavirus challenges.
Ahmad said one of the biggest short-term challenges the industry must face is continued production, especially when content developers are stuck and working at home – and limited by their remote resources.
“We’re already starting to see delays in major gaming releases,” Ahmad said.
Sony Interactive Entertainment announced last week that “The Last of Us: Part Two” and Marvel’s Iron Man VR games have been delayed until further notice. Other delays include the portable version of “The Outer Worlds” for Nintendo Switch (now scheduled for June) and Microsoft-owned “Minecraft Dungeons.”
“The audience is used to certain types of content,” Walzak said. Companies need to be creative and make sure that whatever technology is used is up to the standards players expect, she said.
Rayburn said that in addition to meeting the high standards for core players, new subscriptions and customer acquisitions are not a sure thing to keep long after the end of social distance. Especially when the summer comes, “people will want to go out, see their friends and go to live events,” he said.
Adhering to gambling subscriptions may not make sense when the free trials end, especially as disposable income in the United States decreases for many workers in the midst of jobs, wastewater, pay and bonus reductions, and generally more financial stress.
Rayburn believes that changes in market share that are sustainable will not be known for at least a quarter or two when the economic situation can begin to normalize.
“We don’t know if people buy these services for only a limited time,” Rayburn said. “Everyone wants to discuss,” he said, but the conversation will ultimately be about how many new subscribers or customers these companies get and keep.