The gaming industry’s widespread success in the era of Covid-19

Gaming has changed significantly over the years; and massively so during the novel COVID-19 pandemic.

Not many industries can look back at 2020, wipe the blood, sweat, and tears off their faces and say “okay, the worst is behind us.” Even less so, are the industries that didn’t just survive during a bustling year full of hardships, all while stuck behind the confines of our home.

As if a response to a hail Mary, global lockdowns were exactly what the gaming industry needed to thrive, grow, and propel itself onto new heights among all the chaos surrounding the world.

At the end of 2019, the global gaming market was valued at $151.55 billion, and now it’s currently on track to reach a value of $256.97 billion by 2025, registering a CAGR of 9.17 percent, according to global research firm Mordor Intelligence.

The industry took widespread control of at home entertainment, as cinemas and theatres continued their “closed-doors” policy to prevent the disease.

According to a survey conducted by the Hollywood Reporter, The U.S. saw a gaming growth of 45 percent, with France (38 percent), U.K. (29 percent), and Germany (20 percent). Online play has also increased, with respondents consuming more time spent playing games with others via the internet connection.

Decisions, decisions…

The gaming industry strongly prevailed over the year, accelerating new technological innovations that birthed several new players onto the scene, which permeated a strategical question for the industry, albeit a positive one.

While it is expected that every facet of the market – console, mobile, subscriptions, cloud, AR, VR, and esports – will perform strongly during 2021, the question of “where to play?” renders itself hard to answer when faced with so much variety at the palm of everyone’s fingertips.

“The dilemma game companies must face is how best to monetize their content while juggling the often competing aims of finding the widest possible audience, maintaining goodwill from that audience, and not sacrificing too much control to other platforms,” a report by global research Omdia highlighted.

The console wars of 2021

Every release of new generation gaming console brings with it the beginning of a new console war between the world’s leading tech companies.

According to the Omdia report, Console hardware and software revenue will rise by 5.2 percent to $36.3 billion thanks to the recent launch of Sony’s PlayStation 5 and Microsoft’s Xbox Series X. In parallel, Console games accounted for $45.2 billion of the $159.3 billion global gaming market in 2020, according to market research firm Newzoo.

However, both titans of the gaming world are taking different approaches to attract gamers’ attention toward their respective platforms.

Microsoft’s Xbox are heavily banking on and marketing their subscription service called Xbox Game Pass, which has seen phenomenal growth. While its rival, Sony is touting its marquee lineup of exclusive content and services.

The ongoing health crisis is serving the industry by delivering rapid growth.

“It’s clear that the COVID-19 pandemic drove a sharp increase in console gaming in 2Q20, which has translated into, in some cases, record-breaking revenue outcomes,” Lewis Ward, research director of gaming and VR/AR for marketing firm IDC, noted in a recent report.

New kid on the block

While the console wars were at each other’s throats over console market share dominance, a new technology surfaced during 2020, which is expected to have its own share of the market: Cloud Gaming.

In cloud gaming, the server, where all the games are stored, does all the computation work, which includes game scene rendering, game logic processing video encoding, and video streaming.

This new sector is seen as a serious competitor for the traditional game market.

According to Omdia, Cloud gaming will have a breakthrough year with vital pieces finally coming together, with spend reaching $4 billion, a 188 percent increase from 2020. “Crucially, cloud gaming services will add to the on-console gaming experience while attracting a slew of new gamers who do not own consoles or PCs,” the report added.

Players such as GeForce Now – developed by U.S.-based computer game company Nvidia – emerged in mid-2020, which is a cloud-based game streaming service, delivering real-time gameplay straight from the cloud to your laptop, desktop, Mac, or Android device, merely requiring a good internet connection to play, without the need for beefy hardware specs.

However, content and ISPs will determine cloud gaming’s future, says Mat Piscatella, Industry Analyst at NPD Group.

“All of the big cloud players are now in market, and the tech has been proven to work. But adoption has lagged many predictions. A lack of compelling exclusive content on the cloud-exclusive services is one barrier. But that can be accounted for with investment and/or time,” Piscatella was quoted as saying to GamesIndutry.com.

He further added that what ISPs decide to do with data caps and high customer costs is another matter. “In 2021, this challenge will not be solved for, and cloud will continue to struggle to gain momentum, particularly in the U.S.” Piscatella highlighted.

No where to go but up

While the gaming industry is expected by experts far and wide to continue growing in the future, other elements are also aiding its climb to the very top of the entertainment food chain: the increase in popularity of eSports viewership.

The report by Mordor Intelligence highlighted that eSports are witnessing substantial market demand in the current market scenario and are thus driving the overall gaming industry across the globe.

Twitch –a live-streaming service owned by Amazon – enjoyed a really good year.

The live-streaming site managed to clock 17 billion hours watched last year, which is a full 83 percent higher than 2019’s 9 billion, according to the latest report from StreamElements and Arsenal.gg. Twitch’s insanely successful rise to power has prompted social media giants to release their own live-streaming services such as Facebook Gaming and YouTube Gaming.

“Twitch, YouTube, and Facebook all experienced major jumps in viewership traffic, which includes Twitch hitting 3 back-to-back milestones from October to December to end with a record high of 1.7B hours watched in that final month,” writes Doron Nir, CEO of StreamElements.

For YouTube, that meant 10 billion watch hours in 2020; Facebook Gaming hit 3.59 billion, a jump of 166 percent.

Regardless of who will reign supreme during the battle for gamers’ attention and money, the message remains crystal clear: the gaming industry has become even more mainstream than ever before, as options are continuously growing to meet the subsequent increase in demand.