The Video Games industry is still on the uptrend while competing mediums like TV, Cinema and Online Media platforms see a crash in their revenue.
According to the latest numbers published for the month of April 2020 the video games industry noticed higher revenue than expected and seems unfazed by the Coronavirus pandemic. Games like Animal Crossing: New Horizon (Nintendo Switch), Final Fantasy VII Remake (PS4), Doom Eternal (PC, PS4 & Xbox One) and others showed very strong sales generating over $10.5 Billion for the month of April 2020. These numbers are up 17% from April 2019 ($8.9 Billion) and also outperformed March 2020 which had more game releases than April 2020. Yeah over year growth is showing massive jumps with mobile and PC platforms earnings going up 14% and 12% respectively. The console sector growth was even more unprecedented going up 42% over last year, which is mostly due to the super strong sales of the Nintendo Switch.
Now if we compare it to other legacy competing media things don’t look that good. The Films and Movies industry is showing a potential loss of $7 Billion due to the Coronavirus with that number expected to jump to around $10 Billion for the month of May. A lot of movies have been delayed with cinemas in most countries across the world still closed down. Studios are attempting to release movies directly via VOD or online streaming platforms like Netflix, Disney+ and HBO Max but many are still hesitant and waiting it out.
The small screen is also affected with analysts claiming the virus has had a ‘devastating impact’ on the industry with many advertisers slashing budgets. Thematic Analyst at GlobalData, Danyaal Rashid, commented on the issue showing concern stating: “COVID-19 has led to significant cuts in TV ad spending, affecting those broadcasters that rely on ad revenue to survive. Brands are reluctant to burn their limited cash reserves on ads, especially since this won’t stimulate demand in an economy shut down by non-market forces.”
The situation is similar with online media platforms like YouTube or blogs. In the case of YouTube ad revenues are down across the board with the CPM (Cost Per Mile or per 1000 views) for ads being slashed by 8% to 20% depending on the niche. Blogs such as ours have seen it the worst with CPMs going down almost 50% on some days.
The video games industry is one of the few industries that seems to be unfazed from the virus, which makes sense as people have more time to play games (amongst other factors of course).
What do you think of the analysis? Did you expect the video games industry to stay strong amidst the economic downturn? Let us know your thoughts in the comments below.