The fight against the SARS-CoV-2 coronavirus has not yet been won. Although the daily new infection rates in Germany at the time we update this article on our website are "only" about 300-400 per day, without an approved vaccine and given the mutation potential of the pathogen, the disease remains dangerous. From the very first days of the initial restrictions, it was clear: this is a situation that the modern world has not yet faced in this form.
The effects were and are felt by everyone, but in this article we want to focus on the topic of video games and corona. What has the pandemic done to the market and the industry, especially Nintendo? It is of course still impossible to draw a final line and a final conclusion, but a lot can already be read from the events. So let's start!
A first look at the figures initially shows a positive picture – at least in relation to the profit generated. The market research institute NPD Group analyzes the trends of the video game industry in the USA on a monthly basis. And March 2020 generated 35% more revenue than the same month last year, about $ 1.6 billion. This includes cross-platform hardware and software as well as retail and digital purchases. A title that seems to have benefited like no other from the curfews that were imposed in many places in early March Animal Crossing: New Horizons. We, too, attested that the simulation in the test was extremely suitable for escaping the suddenly so uncertain reality. The great interest of the players in the title This was also reflected in the demand for switches: Already at the end of March, it was difficult to get a switch in some parts of the world, including the USA, Germany and Japan. At any rate at the recommended retail price – private providers took the opportunity to make money with willing players.
The pandemic was also to blame for this. When no one here thought that lung disease would become a problem of this magnitude, parts of China were already quarantined. From there, however, the factories in Vietnam, which manufacture switch consoles for the American and European markets, obtain their components. Production in Japan also had to contend with the shortage in February when the switch in the animal crossing design for the bundle rolled off the assembly lines there. The massive demand for games and consoles in the Far East even led to Animal Crossing: New Leaf suddenly gaining immense value. The game for the 3DS sometimes changes hands for around 70 euros, and the trend is rising. The shortage of switches is good even for the actually dead handheld 3DS. The device was available in Japan for the equivalent of about 70 euros until Corona paralyzed the switch supply. In between, the price for a 3DS doubled there.
Switch shortages all year round?
Nintendo apologized and promptly promised in mid-April that switch supplies would be produced diligently, so that the dry spell would soon be over. Since then, new goods have been trickling in, but production is still not as smooth as before the pandemic, despite easing in China. Analysts even predict that buyers will feel the scarcity even more clearly later in the year because the current high demand cannot replenish their stocks – and when the Christmas shopping season begins, there will be no supplies. It will be months before it becomes clear whether this assessment is true. In its forecast for the 2020 financial year, Nintendo itself has included the supply problem and expects switch sales to decrease by 9.6% compared to the previous year. And that, although it feels like everyone wants to buy the Nintendo console. However, the Switch Lite is far less affected by the delivery problems. What everyone wants is the standard model of Nintendo's hybrid console.
The fact that the assembly lines stand still in many places does not only have a negative impact on the sales figures of the Switch. In the United States, Nintendo of America closed repair centers because of legal restrictions to prevent the spread of corona. Now that the restrictions have been lifted in some states at the end of May, the employees there start again and prioritize the hardware that was sent in before the disease broke out. The infamous Joy-Con drift is one of the problems that will be corrected in the repair centers. In times of a global pandemic, there are worse fates than having to do without the beloved home console, but given the curfews, quarantine and home office, the gaming hobby experienced a measurable influx.
Animal Crossing: New Horizons, already mentioned, is the Nintendo game that has been sold digitally the most and has also achieved the largest digital sales. Worldwide, players chose to buy the simulation 3.6 million times – and only in the online shop, the retail versions are added. If the switch deliveries didn't stall, the numbers would probably have been even more impressive. The revival of digital business is also visible on other platforms and other games. The sales platform Steam on the PC, for example, registered a total of 23.5 million active users and 7.25 million players who played online at the same time at the end of March 2020 – both record numbers. With the online service Xbox Live, the amount of access caused short-term network failures, as a result the capacity of the servers was increased.
Source: Game – Association of the German games industry
A game that was always sold out before the pandemic Ring Fit Adventure, a mix of role playing and fitness software. At the time of printing, for example, the title was still not available on Amazon, only at an inflated price (up to three times as much as recommended) from third-party providers. Other retailers have Ring Fit Adventure on offer at the regular price of around 90 euros, but point out that delivery will not take place until the end of June. The increased demand is not surprising since the gyms were closed for a long time and other outdoor sports activities were also subject to restrictions. The World Health Organization WHO also recommended various ways on social media channels to stay fit within your own four walls. One point was the suggestion to use fitness video games. A side effect: the already very old Wii Sports suddenly rose in price! The Pricecharting website, which tracks price developments on platforms such as Ebay, Amazon and other retailers, saw an increase in sales from around $ 10 at the beginning of the year to nearly $ 30 at the end of April. Whether this is related to the crisis has not been proven, but it is very likely.
The three major trade shows in the video game industry, E3, Gamescom and Tokyo Game Show, fall out in their regular form this year. This has less of an impact on Nintendo and fans than on other publishers, since the Japanese company has been relying on announcements in live streams for some time instead of throwing large stage shows at a trade fair. However, this means that fans and editors no longer have the opportunity to try out titles themselves at the stands and at hands-on appointments. The Treehouse livestreams, in which Nintendo plays titles from their own portfolio, will most likely still take place, only in what framework and when, that is still uncertain. While the E3 is completely paused and will only rise again in 2021, the team behind the Gamescom, a digital alternative program with live reporting and streams to stand on. The Tokyo Game Show in September is similar and is working on an online concept.
But Corona has an impact not only on the hardware, sales and presentation of the new games, but of course also on the development of new software. You might think that it is easy for the modern video game industry to send employees to their home office. However, there are several factors to consider. On the one hand, some companies first have to create the infrastructure, i.e. options for remote access to the computer at work or the supply of the necessary software and hardware on the PC in their own home. Here it comes into play that large projects are sensitive goods – with poorly protected private computers or communication channels via the network there is a risk that information will be skimmed and published. Masahiro Sakurai, the head behind Super Smash Bros. Ultimate, explained on Twitter that he and his team also work from home, although this is a complex undertaking due to the need for confidentiality.
Also to be considered: Employees with children who have to keep their children busy during the day due to closed childcare facilities and schools cannot, in fact, be as productive as usual. Last but not least, the corona pandemic studios are of course also burdened by specific infections. With smaller teams in particular, it is painful to have to do without a member or more for at least two weeks, and this is still the best scenario in which those affected do not experience any further health complications. If the processes in a studio no longer run smoothly, this can quickly lead to financial bottlenecks, missed deadlines and other problems.
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