After pandemic highs, gaming companies facing slowdown now
With things returning to normal, gaming companies that witnessed a boom during the COVID-19 pandemic, are facing a slowdown in demand for video games.
According to an AFP report, makers of consoles, accessories, and software for gaming are experiencing the same kind of post-pandemic effect as tech titans who saw business boom while Covid-19 fears kept people close to home. The squeeze has been exacerbated by steep inflation spurring belt-tightening and gaming fatigue after years of relying on indoor entertainment.
During the pandemic days, “people flocked to Twitch in droves – streamers and viewers alike,” said Brandon Williams, who goes by the handle “BWpaco” on the Amazon-owned platform where gamers broadcast video game action.
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“But I’ve talked to quite a few people who have stopped streaming because they’ve had burnout or because it’s not for them. Or, they don’t have the time anymore since they went back to work in person,” the 30-year-old streamer added, the report said.
As per twitchtracker.com, Twitch viewership soared during the pandemic but has ebbed. However, it remains above what it was in 2019.
According to a Reuters report, rising prices and a lack of hit titles have added to problems for video game publishers Activision Blizzard Inc and Electronic Arts that are also battling supply-chain delays and a shift in consumer choices due to easing lockdowns.
Gaming platform Roblox’s revenue growth has eased to just 30% from 83% two quarters ago, it said.
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As per data from analytics firm NPD, US consumer spending on video games fell 11% in June and is expected to decline 8.7% this year.
“The job market is still hot, there is plenty of froth on the economy causing aggressive inflation and the relaxation of COVID restrictions are leading consumers to consider spending on more experiences outside of the home,” said Jesse Divnich, senior vice president at Interpret, a video game market research firm, was quoted as saying in the report.
Analysts and company executives, however, expect the industry to grow above pre-pandemic levels, leaning on the launch of delayed titles and an easing of parts shortages, the report said.
Data firm Newzoo showed the global games market will generate $196.8 billion in 2022, gaining 2.1% compared to a 7.6% jump in 2021.
“Video games aren’t bulletproof, but they do tend to fare well during challenging times,” Steven Bailey, an analyst at research firm Omdia said.
