Gaming Industry in 2020?

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Since the outbreak of the pandemic these days, the game industry has been relatively less directly affected due to its particularities, which has caused some discussions.

Indeed, whether it is from data reports issued by the third-party organizations or the least creditable rumors that flew in the market, we can see that in the past month or so, Asia’s (Japan, Taiwan, etc.) game industry has performed better than their other industries in terms of revenue. 

However, in the general environment where the pandemic affects all walks of life, there are also some hidden worries under the current temporary stability of the game industry. After all, it is a branch of the overall cultural and entertainment industry.

At the same time, China plays an important part in the global gaming industry. As the world’s factory, China provides essential basic support for the global game market, including hardware production and outsourcing services. The work and production suspension caused by the pandemic is not limited to China, but also hit the overseas game industry and those that involve international business.

Hardware production reduction

When the processing factories stop production, game hardware is often the most directly affected. In early February, Nintendo issued an announcement stating that due to the impact of the new pandemic in China, their Switch game consoles that have been produced and processed in China, as well as Joy-Con and other peripherals, will be affected by manufacturing and transportation. Such as the “Animal Crossing New Horizon” limited version Switch consoles have postponed the scheduled pre-order date from February 8th to March 7th. Another example is their other game “Ring Fit Adventure”, which had already been insufficient supply at the time, will also be affected by logistics and transportation.

Besides, Bloomberg also released a report claiming that there will be a significant shortage of NS provided in the European and American markets. As of September, the bidding price of the NS on the US second-hand market is 1.5 times higher than its official selling price. According to the report, due to the delay of some critical parts produced in China, the assembly from the Vietnamese factory is affected and may cause problems in the transportation and sales of the main console. And considering that Nintendo’s “Animal Crossing New Horizon” is about to be released, which was supposedly the key product in driving new sales of the NS, is expected to have a negative impact on the company’s revenue during this period.

Nintendo Switch™ Family – Official Site

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NS is not the only gaming hardware that has been affected. According to a report by Tech in Asia, 90.1% of the three major gaming hardware sold in the United States in 2019 came from China. Correspondingly, Xbox One and PS4 are 95.1% and 68.2% respectively. From the current situation, the latter two will also be affected by the reduction in production capacity.

Facebook also revealed to the market that the VR device Oculus Quest may reduce production in the next period. “Like other companies, our hardware products may be affected by the pandemic for some time”, said a Facebook spokesperson in an interview with PCmag. “Considering the safety of our employees and partners, we are paying attention to the current situation and are taking preventive measures. We will restore production capacity as soon as possible (after the crisis is lifted).”

Oculus Quest Test – VR-Interactive

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Under the premise that these hardware manufacturing and shipments are affected, the corresponding revenue expectations of some companies have also been lowered. In an interview with VentureBeat’s CEO of graphics card manufacturer Nvidia, also said that about one-third of Nvidia’s game business comes from China. They are paying close attention to the impact of the supply chain of Nvidia graphics cards and AI chips. The company’s revenue in the first quarter of 2020 may see a visible decline. 

Product launch delay

The impact of the pandemic is not limited to the production and transportation of hardware. Due to the shutdown of companies and the inability of workers to produce and operate at a daily pace without safety, the scheduled release and launch dates of some games have also been affected.

On the same day that Nintendo announced that the NS hardware has been affected, the publisher of “The Outer Worlds” announced that the NS version of the game will be postponed. One of the main reasons lies in the inability of the daily work of the outsourcing partners. 

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“Affected by the new pandemic, we decided to postpone the launch time of the NS version of “The Outer Worlds” to give the Virtuos team more time for development”, Private Division stated on Twitter, “The team has no health problem. It’s just that their office is currently closed. We are working with the team to discuss the new development cycle and will share new news about the game’s release with the public shortly.”

Virtuos is not the only Chinese manufacturer that undertakes overseas game outsourcing, many arts, and other game developments are completed by Chinese outsourcing companies and studios. In the objective environment such as reduced work time and home office, some other outsourcing cooperation may also cause delivery delays.

E-sports postponed

Under the pandemic, most people stay at home and avoid going out for safety reasons. Many established public entertainment activities naturally choose to proactively postpone or even cancel events. In the gaming industry, similar changes were made in the scheduling of various offline e-sports events. Some offline activities of regular e-sports events have to be postponed or rescheduled.

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In 2019, Overwatch League (OWL) originally planned events in multiple countries and built multiple venues to match the new competition system. At the end of January, under the situation of the increasingly severe pandemic, officials had to announce the postponement of the game to ensure the safety of personnel. From February to March, the original home game arrangements in China (Shanghai, Guangzhou, Hangzhou, etc.) and other places were canceled. The home game was originally a new change that Chinese OWL fans were looking forward to, but these have to be compromised for safety.

“Of course these teams will feel disappointed, especially when the tickets are sold out very early,” said Spector, the vice-chairman of E-sports Professional League, in an interview with Forbes, “but safety is the priority, and everyone supports what we do.” A few days later, news reports revealed that several games originally scheduled in China will be transferred to Seoul, South Korea to hold a make-up match in late March. The current canceled event in China is scheduled in Seoul, perhaps after they communicate with the league, they have made relevant preparations.

Similar to the OWL situation, there are also the League of Legends (LoL) events. Also at the end of January, the League of Legends Pro League has officially announced the decision to postpone the LPL Spring match, and no new schedule was announced in the short term. Events such as Overwatch and League of Legends often have global event planning. As a region with more spectators and fans, China is usually a very important participant.

The delay and cancellation of the schedule of these events will also affect the overall planning. Although the players and viewers could understand this, they might still feel a little regretful. The negative effects of changes such as postponement may not be limited to this. The cost of the venues, publicity, etc. that have been paid may not be recovered. If the reputations of some sponsors are affected because of the above reasons, it will be unknown whether this will affect the income of all levels of the league.

Done with the unfortunates, what is the good news?

After the launch of 5G, related services have officially begun to be commercialized. After the advent of the 5G era, the network speed will be 10-100 times that of the 4G era. Compared with the gaming industry, the speed will be soaring. In the future, there will be no problems with lags, disconnection, or flashback when playing games. The overall network environment for playing games is better and is more convenient for players. For the game industry or developers, it will be a new opportunity, but it also brings a lot of challenges at the same time.

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There will be no “download” of games in the future

The chairman of Weijing Technology has said that the download speed of future games will be less than 1 second, and the transmission speed will be so fast that there is almost no concept of downloading. Players can almost start playing after viewing the advertisements on the Internet. There will be no waiting time to download the games.

However, since the time cost to download games is almost zero, the slowly fascinating guided games that were adopted in the past might no longer be favor by the players. Players in the future will be very impatient. If the game is not attractive enough, the player will immediately turn to another game. Therefore, the design of the game will evolve into an eye-catching welcoming screen and immediately rewards the players as soon as they enter the game, hoping to increase the player’s motivation to continue playing. For game developers, it is also a challenge to bring out the best at the beginning.

Games are stored on the Clouds, lowering the limitations for playing games on mobile hardware

“Cloud gaming” will also be the easiest new type of gameplay in the 5G environment. In the future, players can connect to the cloud to play games without lag, which can get rid of the limitations of mobile phone hardware specifications. Smartphones do not need to be equipped with high computing power or high-end GPU, as long as they connect to the cloud, players can enjoy a 3A-level gaming experience.

The future games might need not to be “bought out” or “downloaded”. In cloud gaming platforms, players can subscribe to the cloud gaming platform, and the hardware cost will be borne by the platform or game company. Renting cloud equipment is also be a challenge for manufacturers. Currently, there are already cloud gaming platforms like NetEase and GameMatrix.

High-quality, high-community games are realized

The content of the game was constrained by the network environment or hardware in the past, where large-scale games were burdened. Developing large-scale, high-quality games might raise a consideration that players might not have the required equipment to play online and the development costs are high. However, in the future, when the Internet is optimized, large-scale and high-quality games will have more room to develop and can attract more players.

In addition to the development of high-quality games, as the network can carry more capacity, the games can also be expected to have more entertainment activities other than gaming at the same time. In the past, players may be teaming up to fight monsters. In the future, it is expected to allow hundreds of people to play games and chat with video at the same time, or they can practice exercises on the Internet in the game, and watch movies or concerts at the same time. The foregoing can be realized under a larger bandwidth and virtual social networking, and improve the immersion experience.

Under this trend, as games are expected to get rid of the limitations of hardware and network speed and bandwidth in the future, game developers who have the ability to develop large-scale games in the future are expected to have the advantage of winning in the 5G environment. But with the realization of large-scale cloud gaming platforms, game agency manufacturers will need to provide players with more entertainment experience and added value.

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Conclusion

The above list cannot conclude all the impacts on the game industry over this year. In a globalized environment where international manufacturers and products open up overseas markets, and the knowledge exchanged are speeding up the growth of technology, the spread of the impact of this era is inevitable yet surprising. 

Whenever you are ready to hop into this rapidly changing and innovative world of gaming, Skipfour offers a full-stack gaming development for you. You are more than welcome to tell us about your ideas! If you like this article, don’t forget to subscribe to our YouTube channel, like our Facebook, or follow us on Twitter to get the latest news!

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