Tech

Video game immunity may be prolonged

Most companies are happy to see the 2020 pass, but video game companies may have some mixed feelings.

The coronavirus pandemic was an undeniable benefit to the gaming industry. Restrictions that kept many people home and closed other forms of entertainment have brought a flagship year for the sector. Six of the largest game publishers are expected to see total calendar year revenues up 19% from last year to $ 24 billion, according to a consensus estimate compiled by FactSet. In 2019, the group’s total revenue fell by nearly 3%.

This number doesn’t include sales of the new Xbox and PlayStation consoles launched in early November, but it’s still very difficult to get due to the surge in demand. Other game hardware makers are also rushing to use it.Turtle beach,

The company, which manufactures accessories such as specialty headphones for gamers, recorded sales of $ 227 million in the nine months to September, up 71% year-on-year. Newly released Corsair Gaming,

As a result, gaming PCs, laptops, and other related accessories recorded a 54% revenue increase over the same period to approximately $ 1.2 billion.

For game makers, the current sales boom is particularly noticeable given the impact of pandemics on the development cycle. Some major games were delayed in 2020 due to the challenges imposed by remotework.This included an annual entry to Activision Blizzardof

The blockbuster “Call of Duty” franchise. The game “Black Ops Cold War” was released a few weeks later than usual and has earned one of the franchise’s lowest critic scores in over a decade. However, Cowen analyst Doug Creutz says the game is still on track to sell more than 20 million units. According to FactSet, analysts predict that Activision’s publishing business, which consists primarily of the “Call of Duty” franchise, will see a 74% increase in net bookings in 2020 to nearly $ 3.9 billion.

Even the 2020 flop was relative. Polish game publisher CD Projekt reported in a regulatory disclosure on December 22 that the troubled “Cyberpunk 2077” has sold more than 13 million units since its launch on December 10. That’s well below the 18 to 25 million units that Jeffreys analyst Ken Lamp said he expected to sell the title at the time of his debut. But it’s not bad for games that are so buggy that both Sony and Microsoft have removed the game from the online store and joined other retailers to offer refunds to dissatisfied players. According to FactSet, analysts expect CD Projekt to generate approximately $ 672 million in revenue in 2020. That’s more than five times the sales of the previous year.

But like other pandemic-backed industries, the video gaming sector faces the question of what the business will look like in 2021, when high-dose vaccination is expected to slowly return to normal life. I will. In a December 22 report, Morgan Stanley’s Brian Nowak claimed that the pandemic “probably postponed gamer recruitment for four years.” This is expected to grow according to the publisher’s ability to launch compelling games.

Of course, game publishers can get help with more adoption of the new Xbox and PlayStation consoles. This will increase the demand for games designed to take advantage of cutting-edge features. Activision and Electronic Arts, the two largest publishers of annual revenue, are expected to record revenue growth of 7% and 8% respectively in 2021, with at least two new games from Activision’s Blizzard side and new from EA. “Battlefield” is predicted. It will be released in the year.

The speed of nationwide resumption will also have a significant impact on the industry’s performance in 2021. Given the recent surge in Covid-19 cases, blockades and other restrictions may continue during the winter, but reopening popular entertainment options such as movies and concerts is a theme park competing for leisure and discretionary income. , Can occur quite later. But as more entertainment options open up and more workers return to the office, the gaming industry needs to tackle that it’s not the only game in town.

With the release of PlayStation 5, Sony has been able to get a hit product this holiday season. This is how a major Japanese electronics company built a popular game system that would be the company’s best jewel. Photo Illustration: Mary Pilaev / WSJ

Write to Dan Gallagher at dan.gallagher@wsj.com

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Video game immunity may be prolonged

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