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Sunny days and easing lockdowns slowing the gaming boom

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SUNNY weather and easing of lockdowns are leading to a slackening of interest in video-game play, which exploded in the spring.

After the US went into lockdown in March, many kids and adults stuck at home flocked to playing and socializing through games such as Animal Crossing, Fortnite, Roblox and Words With Friends. The amount of gameplay was unprecedented for springtime, and could only be compared with Christmas, the industry’s best-selling time of year.

But now that summer weather beckons, and lockdowns are being eased, there are signs that other activities are displacing some of that additional gameplay.

Google searches for “video games” peaked in late April to early May, and have declined 28% since, according to Google Trends. On gaming platform Steam, 24 million people were playing during peak time in March — that’s now down to 20 million users.

US mobile-game downloads in the second week of June were virtually flat from the prior week, and sharply down from just a few weeks ago, according to tracker App Annie.

Total sales of digital video games declined 3% to $10.2 billion in May as compared with April, according to researcher SuperData. Digital console revenue alone dropped 27% between April and May, but a 3% growth in mobile earnings offset that gap. Overall spending was still up 14% over May 2019.

POKEMON GO
Interestingly, Pokémon Go spending rose 60% month-over-month, partly as a result of warm weather, SuperData said. Earnings for the game, in which players explore their real-life neighborhoods, typically rise during the summer months.

The number of global daily active users of console and PC games that use tools from the development company Unity peaked in March and has been dropping off ever since, though it remains well above typical seasonal levels, according to Unity’s June report. Daily users of mobile games using Unity peaked in late March, and have been declining as well — particularly sharply in May, when many lockdown orders were lifted, according to the report.

“Our sense is that time spent overall on gaming is retreating from highs during the heart of the pandemic but that people who picked up new gaming habits are still playing, even if for less time than the peak,” said Doug Clinton, a managing partner at Loup Ventures.

He predicts that the total number of active gamers will stay 5% to 15% above pre-pandemic levels.

Unity, meanwhile, found that player retention in games has increased.

“Gamers typically have to carve out time in their schedules to continue playing games on their desktops or laptops, but the COVID-19 situation changed play habits,” Unity said in the report.

REVENUE IMPLICATIONS
That all has massive implications for revenue. For instance, micro-transaction revenue in mobile games — many of which are free to play and make money by selling additional levels or weapons — has jumped hugely but has been declining since April.

A number of gaming companies, including Zynga, Inc., have said in recent weeks that they are anticipating more typical gaming behavior in the second half of the year.

Matthew Kanterman, an analyst with Bloomberg Intelligence, said he expects gaming activity to head back toward typical growth levels as the second quarter winds down this month, “but that’s obviously predicated on a smooth economic reopening, lack of a second wave of virus infections.”

New gaming consoles expected within months could boost gaming, too.

“The fall should be cyclically positive for time spent, as will the console cycle in the holiday,” Loup Ventures’ Mr. Clinton said. — Bloomberg





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