- 9 Dec 2020
- Reading time
- 4 minutes
2020 has been a strange year indeed, affecting all aspects of daily life. The coronavirus pandemic has caused a number of local and national lockdowns, affecting the way people go about their daily lives. Everything, pretty much, has moved online: shopping, socialising, entertainment. People are spending more time at home and demand for internet and streaming services has increased, so much so that Netflix initially had to reduce the quality of its services at peak times (though not so much as to be noticeable by the average viewer).
One industry that has really flourished in these testing times is the online gaming industry. It allows people to relax and unwind after a stressful day, is entertaining, allows for social interaction with friends as well as the opportunity to meet other like-minded individuals. The gaming market has increased year on year for the last decade and has seen accelerated growth throughout the pandemic. Nintendo has posted profits of 400% in the first fiscal quarter of 2020, and more than 5.7 million Nintendo Switch consoles were shipped in the same quarter, an increase of 166% year on year.
Reasons for Gaming market growth
According to experts, the global gaming market is worth over US$114.1 billion in 2020, and has seen a huge growth in mobile gaming, which accounts for US$77.2 billion, a 13.3% year-on-year growth, and 48% of the global gaming market. There are many reasons behind this growth, that can be predominantly categorised as follows:
• As smartphones have become more affordable and accessible, and internet connectivity, particularly on the go, has increased the popularity of mobile gaming, and developers are making mobile version of console and PC games.
• Non-gamers may not have consoles, but will have a smartphone or tablet, capable of running games.
• VR is becoming increasingly popular as an immersive way of playing games.
• Combination consoles, such as the Switch, that allow for console playing as well as portable mobile gaming are becoming increasingly popular.
• As regular leisure activities like going to the cinema, going out for the day with friends, going to parties and going out for dinner are no longer possible, people are spending more time at home and having to find things to do; online gaming is a low cost high value offering that is accessible to anyone with an internet connection and a suitable device.
• Those furloughed are having to fill their days, and online gaming is a way to keep their minds active and interact with others
• Those working also have more free time and use online gaming as a way to relax in the evenings, and to connect with friends and like-minded individuals.
• Boredom and anxiety created by the pandemic has driven the growth of searches for online gaming and has even attracted non-gamers.
Business Model Shift
• There has been a shift from physical disks to online downloads, which are more accessible; they can be bought and downloaded at any point and are not reliant on stock levels and shops being open.
• Subscription models are being used to encourage longer gameplay and to reward loyalty.
• Free to download games with in-game monetization allows players to try different games without risk, and accounts for a large number of the games being played. Revenue is generated through advertising and in-game purchases.
• Focus on one game (or franchise) as opposed to multiple games. Individuals are investing more into playing one game in-depth and really exploring the games’ universe, and developers are shifting their focus into creating additional downloadable content and sequels to maintain player engagement.
Growth of Online Casinos
One key area that has grown massively over the last year is online gambling. Online casinos have seen a huge increase in traffic; the BBC reported in May 2020 that searches for online casinos on internet search engines were at an all-time high in the United Kingdom. It is debated whether or not the pandemic has affected this growth.
There are a variety of casino games that are being played in the UK, but of the most popular games on an online casino is slots; they are fun, fast, engaging and easy to play. They require no skill, and wagers can be mere pennies, thus accessible to all. Revenue for online gambling has showed no signs of slowing this year. According to Statista, the market was estimated to be worth around US$58.9 billion in 2019, and is projected to reach US$92.9 billion by 2023. The Gambling Commission shows that overall gambling in the UK fell by 0.6% between 2019 and 2020, but that there was an increase in online gambling by over 8%.
The future of the gaming industry
So, what is the future for this industry? As a vaccine for the virus has been found, and restrictions across the globe are being lifted, how will the gaming industry ensure that they capitalise on the gains they have made during the height of the pandemic? It is clear that gambling remains popular, and it will be vital for online casinos to continue to offer something that sets them apart from their land-based competition, and the advent and development on VR online casinos will certainly go some way to help with this. Despite the popularity on mobile games and downloadable smartphone games, it is also clear that console gaming is under no real threat as evidenced by the ongoing popularity of the Switch, and the new offerings from Sony and Microsoft selling out within minutes of release.