Video game sales soar as coronavirus leaves millions of prisoners at home

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Players line up for a copy of the Animal Crossing video game outside an EB Games store on Yonge Street in downtown Toronto despite requests to drive away and stay at home.

Andrew Francis Wallace | Toronto Star via Getty Images

Sales of the latest video games have broken records as millions of people are stranded in their homes after governments around the world have locked up entire cities and pushed for social distancing to keep the coronavirus from spreading.

Nintendo’s latest episode of its Animal Crossing franchise, titled New Horizon, was released on March 20 and sold more than 1.8 million copies in its first three days in Japan, according to game publishing. Famitsu video. In the UK, the title sold more copies in its first week on the shelves than the launch sales of all previous entries in the series combined, reported games publication gamesindustry.biz.

The social simulation game allows players to create their own avatar and engage in activities such as fishing and gathering resources across the islands, with the goal of building new tools and expanding their virtual homes. .

A game like Animal Crossing is an antithesis to the difficulties many people suffer from the coronavirus epidemic.

Piers Harding-Rolls

Games Research Director, Ampere Analysis

Piers Harding-Rolls, director of game research at Ampere Analysis, told CNBC in an email that the first sales figures were “outperforming previous expectations”.

“Animal Crossing as Nintendo (intellectual property) has never been a top seller,” said Harding-Rolls. “This latest version has moved the franchise into the league. “

Daniel Ahmad, senior analyst at Niko Partners, was less surprised. He said the game was “supposed to be a great seller,” but admitted that his initial sales performance was “beyond expectations.”

The two analysts agreed that the coronavirus epidemic likely had a role to play in boosting sales. In an attempt to slow the spread of the virus, the big cities of the world are locked up, people are asked to stay at home and to avoid going out unnecessarily, certain authorities even going as far as closing some businesses which are not considered as “essential. Millions of people around the world have been locked up in their homes as a result of these measures.

“COVID-19 has ultimately helped increase sales as more and more people are under control and games are a safe and low-cost form of entertainment,” said Ahmad.

Harding-Rolls said the increase in sales was probably partially fueled by “the fact that many players have more free time at home at the moment.”

He added: “A game like Animal Crossing is an antithesis to the difficulties that many people are suffering from the coronavirus epidemic, so appealed to many people because of it. “

Animal Crossing is not the only title that game lovers turn to. Last week, several reports revealed that the first-person shooter, Doom Eternal, launched on March 20, had the best launch weekend in franchise history.

In addition, Ahmad also cited another recently launched game – Activision Blizzard’s free first-person shooter, Call of Duty: Warzone, which was launched on March 10. In just ten days, the game attracted 30 million players.

“This makes it the fastest growing non-mobile title of all time,” said Ahmad.

Stay in touch with games

Beyond these examples, Harding-Rolls and Ahmad said that service-based online games are likely to experience an increase during this period, as people look for ways to connect with others when they are at home.

“Many of the existing games based on online services are seeing more usage and breaking records,” said Harding Rolls. He said that one of the reasons is that those who did not play as often before now have “more free time at home”.

Another category of people who could return to the games are those who have “fallen into disuse” and are now looking for some familiarity, said Harding-Rolls. With this group returning to the games, they “may have played a lot in the past but have since fallen.”

The games will become a place to socialize with friends in a virtual world when the real world is out of bounds.

Daniel Ahmad

senior analyst at Niko Partners

“Competitive and live online games will experience the largest increase in the future,” said Ahmad. He cited reasons such as being an avenue for people to stay in touch with friends as well as the introduction of new content over time to drive long-term engagement.

“We also note that uncompetitive games with social and online elements are another way for friends to stay in touch, explore the game worlds and create user-generated content,” added Ahmad. “The games will become a place to socialize with friends in a virtual world when the real world is out of bounds. “

Outlook for the sector

While fears about the economic impact of coronaviruses have shaken global markets in recent weeks, the video game industry appears to have weathered the storm better than its peers.

The VanEck Gaming and Esports ETF ETF, for example, has been up 2% since the start of the year, while the ETFMG Video Game Tech ETF has only dropped about 5% in the middle of the sale massive market. In comparison, the Dow Jones Industrial Average and the S&P 500 had their worst first quarter in history, losing about 23.2% and 20% respectively.

However, the overall impact of pandemic sales on video games is still unclear.

Recognizing that the next big budget games could see an increase in digital sales as consumers “afford home entertainment,” said Harding-Rolls, overall sales are expected to be negatively impacted by the closure of retailing games in many major markets. As a result, rising digital sales revenues may “not offset this obstacle,” he said.

Ahmad, for his part, said the video game market should experience a “short-term boost” because of the restrictions imposed.

– Annie Pei of CNBC contributed to this report.

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