COVID-19 established itself quickly and spread worldwide, leaving chaos and disruption in its wake. Many industries, such as travel and the housing market, were devastated by the pandemic but others thrived. The gaming industry was one of the few industries to ride out the storm. As populations began to isolate, they turned to games for entertainment during confinement.
Within the first quarter of 2020, mobile games was a strong performer within the gaming sphere. During this time, it was the greatest 90-day period for mobile game downloads ever, with more than 13 billion installs across the App Store and Google Play. This is no minor feat—it was two billion downloads more than during Q3 of 2019. As the year progressed, downloads continued to grow. In March, downloads across both stores increased 24% month-over-month to 5.1 billion, while in April, downloads grew by a further 8% month-over-month to 5.5 billion, with much of this growth coming from China and India.
User spending in mobile games is also up. In March, games generated an estimated $5.8 billion globally, up 8% from February. In April, meanwhile, revenue growth accelerated by a further 10% month-over-month to $6.4 billion. What's interesting here is that revenue growth in April was higher than download growth, and this was the first time since 2014 that the month of April generated more revenue than March. In the US alone, we saw a significant increase in the first four months of 2020, hitting $1.9 billion in April, up 18% from March and 28% from January. In China, meanwhile, players spent $1.1 billion on the local App Store in April, up 5% from March but down 5% from January.
Despite the oncoming headwinds of a global recession, and potentially a depression, we still currently forecast $98 billion in mobile gaming revenue by 2024, a 55.6% rise from 2019 levels. That's $4 billion higher than our pre-COVID-19 prediction for the market.
During the COVID-19 lockdown, US gaming hardware spending grew 56%, with the Nintendo Switch leading the charge. Total spending in the US games industry, across video game hardware, software, accessories, and game cards totaled $977 million in May 2020, a 52% increase over May 2019, according to the NPD Group. This is the highest total for a May month since the $1.2 billion achieved in May 2008.
According to Newzoo's 2020 Global Games Market Report, the industry will reach revenues of $159 billion, up 9% year-over-year, largely driven by both next-gen consoles and the effects of COVID-19.
Console gaming, meanwhile, is expected to grow almost 7% year-over-year to $45.2 billion, with over 729 million total players in 2020. It’s predicted that PC gaming will grow almost 5% to $36.9 billion in 2020, with 1.3 billion players, and the global gaming market will exceed $200 billion by the end of 2023.
UK Gaming Companies:
While the coronavirus crisis has impacted the overall gaming industry, it has not impacted video game companies based in the United Kingdom and there is no risk of closure in the coming months. Ukie, a trade association for the industry in the UK, published its first “Playing On” report, which is where these findings have been sourced. It commends the sector, which has “risen to the challenges raised by the current pandemic, rapidly adapting to new ways of working and maintaining very high levels of productivity throughout difficult circumstances, without overreliance on governmental and public funds for support.” However, it did mention that the industry is facing “ongoing day-to-day strain” as a result of the pandemic, like the mental welfare of developers, cancellation of events, and restricted networking possibilities.
Ukie’s Playing On report concluded that “overall productivity in the industry remains high, with businesses working at 80% productivity during the worst of the COVID crisis.”
While there have been some positive outcomes for gaming, there have also been some concerning findings for the industry. More than two-thirds of respondents in the report stated that future publishing deals will be “negatively impacted” by the pandemic’s impact and these delays may affect their total earnings for the year. Fortunately, the positive outweighs the negative for the gaming industry during this time of uncertainty.