Coronavirus and video games report

The coronavirus crisis has been felt in the video game industry causing delays or even the postponement of large events such as the GDC. Is E3 2020 in danger now? Will it also affect the production of PS5 or Xbox Series X? We review the effects of the Coronavirus in the world of video games.

Rare is the day that the word coronavirus does not appear on the news, newspapers and even in street conversations. And the video game industry has not been spared from this either , which the Covid-19 virus is affecting significantly in many different ways. During the last weeks we have already told you about the delay of some video games, supply problems, and even the postponement of large events such as GDC 2020 , which made this difficult decision after seeing big players in the sector such as Microsoft, Epic Games, Electronic Arts or Unity cancel their attendance at this veteran technology fair. But how much more can this crisis affect the video game world?

Although the main thing is to put aside the hysteria and tremendous messages, in this special we are going to review some of the possible scenarios that are glimpsed on the horizon, because among many amateurs and even professionals in the sector it is already beginning to be glimpsed with some fear the possibility of E3 2020 being canceled or postponed, while Los Angeles has declared a state of emergency due to the coronavirus. Not forgetting the rumors that the virus could even affect the launch of PS5 and Xbox Series X. To what extent is it possible for this to occur? We are going to try to offer you an overview of the current situation, analyzing what happened in other major events affected by the Coronavirus, while we will delve into how this crisis has also affected the work of professionals in the video game industry , including journalists .

New consoles, video games … how does it affect them?

The manufacture of hardware and software has already left several news about a shortage of units, but the situation, if not corrected, could grow larger, leaving headlines that we still have trouble imagining today: the possibility of seeing a delay in the releases of PlayStation 5 and Xbox Series X. It is still remote, very remote, but some analysts are already beginning to assess the situation, especially if we take into account the capital importance of China, the main focus of the pandemic, when it comes to the production of different essential components for the operation of consoles and other devices.

There’s still plenty of time to get back to normalWe are in March, so there is still enough time to return to normality, but what is the deadline for Sony and Microsoft to start evaluating other scenarios? Daniel Ahmad, a well-known analyst at Asia market research firm Niko Partners, believes that supply chain disruption will have a minor impact for now , but if the spread continues for a month or two, the issue will be it could see a lot more compromised, forcing companies to change their plans.

“If manufacturers are not able to operate at full capacity by the end of the second quarter , we could see an impact on the next generation consoles, resulting in a possible delay in their premieres or a launch with limited units,” said Ahmad in statements to The Hollywood Reporter that are shared by Jefferies Group , a financial services company, which already at the beginning of February warned about the possible inconveniences that the coronavirus could cause. For now, everything seems to be going smoothly in the two large manufacturers, having advanced, in the case of Sony, according to recent information from Bloomberg, that preparations for PS5 are being maintained.

A different case are the current generation consoles , especially Nintendo Switch . It should be borne in mind that in 2018 96% of the consoles imported to the United States came from China , a “monopoly” in production that, given the customs war between the two countries, forced the diversification of manufacturing processes to Big N, for example, thus saving itself from suffering even more lack of remittances than the Japanese company is already suffering. But how much has Covid-19 reduced distribution? According to an estimate by TrendForce, console shipments have fallen by 10.1% due to a lack of material and laborcompared to previous forecasts, a fact that is not excessively worrying, as it is in the low season of consumption and in clear decline for PS4 and Xbox One , but in the case of Nintendo Switch, with the launch of Animal Crossing: New Horizons to around the corner, it does worry a lot. In fact, its consequences can already be seen in the top Japan , where the standard model of the Big N family of systems has been surpassed, considerably, in these last two weeks by Nintendo Switch Lite while the first one sees fall to ” minimums “your sales.

The shortage in the firm goes beyond its consoles and also damages its Joy-Con and other accessories such as the Ring-Con necessary to play Ring Fit Adventure , a lack of units in the market that is being taken advantage of both in Australia and in China itself to resell the production on the second-hand market for prices several times higher than recommended by its publisher. And video games? Can they also suffer delays? The printing of copies, luckily, are more localized and the trend to the digital market, as we will see later, avoids greater scares in this matter. However, and as Streamline Studios, a company specialized in outsourcing developments, has explained, there are manycompanies that usually subcontract to others located in China to take charge of one of the many creation processes that an adventure can have and that, now, due to lack of professionals, could be paralyzed.

Do you think the coronavirus will postpone the launch of the new consoles?

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Games, the “positive side” of the coronavirus?

We will all agree that the COVID-19 crisis is having very negative repercussions on the video game industry, although what is lost in production and face-to-face activities is partly offset on the other hand: digital activity and consumption . At the end of the day, gaming has become one of the safest forms of entertainment in the world, and that in turn also leads to other benefits for businesses that are not directly dependent on working abroad.

Events that are canceled, schools that close their doors … people spend more time at home than away from it. The well-known analyst Mat Piscatella, from the NPD group, foresees on Twitter an increase in sales of complete games in digital format, but also of DLC, microtransactions and subscription services . The games as a service are the big winners: “What I would see a boost is the use and spending on social games like Fortnite, Rainbow Six: Siege and the like, since people always want to find ways to connect with family and friends” .

Some very popular games in China, such as PUBG or League of Legends , have improved their activity; but the clearest examples are on Steam . In February, Valve’s platform marked its highest number of connected users to date : more than 19.1 million people. The circumstances were very favorable for this, coinciding with the Chinese New Year holidays and, of course, the fears and limitations produced by the Wuhan coronavirus; as Niko Partners analyst Daniel Ahmad noted . And what is the game of choice for Steam players at times like this?

There are numerous games connected to the virus by theme that have gained prominenceCounter-Strike: Global Offensive . Tactical FPS is always among the most populated titles on Steam, but in the last month it has managed to break its own user record , intact since 2016… twice. In the 24 hours prior to the writing of these lines, the game registered a peak of more than 811,000 simultaneous players according to the Steam statistics tab, not far below its maximum of more than 933,000 registered players at the beginning of March. In addition, the final of the IEM Katowice 2020 World Cup, which entered quarantine in the last minute, set a record of views for the ESL series with more than one million viewers, attending eSports Charts .

On the other hand, there are also numerous small games, connected to the virus by theme, that have been gaining prominence recently. The developers of Plague Inc. try to ignore the doubts of the players and the curious, while China prohibits the download of the video game . The United States takes a more favorable approach to video games by promoting the use of the experimental title Foldit , where players try to design an innovative protein to fight COVID-19. The most promising measures will be tested in labs , so perhaps the cure for the virus lies in the hands of the players.

Will the coronavirus be decisive in video game consumption in 2020?

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Cancel or go ahead? The dilemma of big events

It is evident: the video game is suffering parallel effects of COVID-19 identical to that of so many other industries , and that is where the celebration of fairs and conventions of the sector enters . The calendar has wanted the outbreak to have extended months before the most important of all, E3 2020, which is held in Los Angeles in early June. Although the organizers, the Entertainment Software Association of the United States , keeps the date , there are many fairs that are already suffering from the ailments of the coronavirus. The most so far, the GDC of San Francisco and the PAX East of Boston. The first has postponed its celebration, the second was held without many of the main players in the industry, and a similar scenario is the one that would put the great world video game fair in trouble.

Seeing precedents, is E3 2020 in danger?At the eSports level , in fact, something similar is happening: being massive celebrations in which players from all over the world, it is not surprising that electronic sports are making the same decisions and responsibilities as more traditional sports. Notable have been the cases of the cancellation of the PUBG Global Series that was going to be held in Berlin, the suspension of the LCK of League of Legends in South Korea, the cancellation of different events from the Capcom Pro Tour calendar of Street Fighter 5or the celebration of the IEM Katowice of Counter-Strike: Global Offensive without an audience in the play-offs. The EVO, the most important fighting games championship on the planet, maintains its date for the end of July , something that could change if there are no changes with the virus. Seeing precedents, is E3 2020 in danger ?

Adjust the ESA fair on the calendar or not, the reality is that the E3 ball is in the roof of the companies that, for now, will attend the Convention Center from June 9 to 11 . What is the trend of other firms in similar situations far from the world of video games? 3DJuegos consulted an anonymous source from a travel agency to find out the most common movements: “ There is a lot of concern, bordering on mass hysteria . Companies that our company runs is not that they say ‘it is not that we are not going to travel to northern Italy or China’, no: national trips are canceled due to the coronavirus ”. According to our contact, “larger companies could be using it asexcuse not to go to events or meetings that they know are going to cost a large sum of money ”.

It’s not that companies don’t want to go to eventsWhat is the difference between the current situation and the one experienced with the Mobile World Congress ? Time. With the Barcelona mobile fair there was only room for improvisation , canceling and losing large sums in transportation, stays and exhibitions; Given the experience in the Catalan capital, many video game companies may take their strategy for Los Angeles with greater caution : “There are airlines such as Etihad or American Airlines that allow canceling their flights at cost 0 , something unusual (…) I think many companies take advantage the coronavirus to save 50,000 or 60,000 euros in taking 10 people to a fair, renting a stand and having them there for several days; It is cheaper for them to make a videoconferenceand with the excuse we leave it in our pockets for greener times and invest the sum in other things that today, also due to the coronavirus and its origin from China, are rising in price ”.

In addition, after the cancellations of the Mobile World Congress there was a social conscience that has spread to the rest of the sectors. It’s not that companies don’t want to go to events; is that companies put the safety of their employees at the forefront. This has generated, with this, a bad image for the firms that send their workers to events, an image with which no company wants to dance. ¿ How is the situation in Spain ? According to anonymous sources consulted by 3DJuegos, the situation of the coronavirus and its implications in foreign fairs have led to important changes in the date of one of the main events in the country. The organizers, for the moment, are left to see what movements E3 2020 and Gamescom 2020 will carry out in the coming weeks to make a decision for their celebration in one of the main Spanish cities .

Will the coronavirus affect the celebration of E3 2020?

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How does all this affect the video game press?

It is customary that, when there is a misfortune, one tends to think that the press benefits. The truth is that when people talk a lot about something, be it good or bad, people tend to consult more about targeted information; however, this is not particularly the case with video games. All this about the coronavirus does not raise a particular interest , no news related to the virus appears in the tops of the most viewed on the web . And neither does it bring any commercial revenue; and more considering that, in music, cinema or video games, advertisers do not want to see their name linked to situations of this type. Total ruin .

The accusations that the press is interested in the cancellation of an E3 by some users who wear cute little aluminum foil hats? They are easily removable taking into account that, during the week in which the fair is held, is when the most invoice for example 3DJuegos in terms of advertising and sponsorship. And also when better audiences get … with a noticeable difference in the figures compared to any other week in both cases, in fact. I don’t think the scenario is very different from the rest of the competition. So one more stupidity , neither more nor less.

Also that many preview trips to see video games are being abortedAs for the day to day? Questions that have been elaborated previously. To the cancellation of events that is happening in recent weeks, and which threatens to continue if things are not resolved in the medium term, we must also add that many preview trips to watch video games are being aborted. One of them was especially painful since it was a very important title and it was a first contact exclusively for 3DJuegos. So, you will excuse us, damn grace and “how good this type of misfortune comes to the press.”

For the rest, a lot of caution on the part of the distributors. Some cancel trips directly, and others with shorter-term dates simply ask: “Given the outlook with the coronavirus around the world, are you still interested in attending the preview?” They asked just a few days ago from a editor. Of course, the editor in question said yes.

How will it affect press releases? It is not clear, but there will surely be some movement in the calendar for directly or indirectly related reasons. That will drag review embargoes, advertising campaigns and more, of course. In entertainment it is not exclusive to video games, of course, it is also exclusive to music, sports … or even the cinema! Because, for example, the new 007 has postponed its premiere and we know in the writing that there are already other feature films considering doing the same, or even anticipating their arrival in theaters before “collective fear leaves them empty”, as they comment. And no, even if the media report it, none of this suits us well.