The Big Short – recession vs. gaming. Gamedev in times of pandemic
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Isolation promotes virtual entertainment. It seemed a bit sketchy when all the big conferences were suddenly called off, but now it seems the situation is stable. While physical distribution obviously falters, digital is doing great, and the traffic in the network is huge.
Twitch, for example, is breaking records of popularity, same as Steam. Sales of some games are staggering (I don't think Doom Eternal could have achieved such success without the whole #stayathome affair). The gaming market seems immune to the virus so far. The same can't be said about related industries – sales of smartphones, for example, declined by 50% in the USA.
But now we're increasingly facing a scenario, when the current state of affairs becomes permanent (even if just in some ways). Even when governments decide their economies have to be revived, some restrictions will stay with us for longer, maybe forever. Tourism, gastronomy and a range of other services based on direct contact and travel are cutting jobs, families are losing income. People adapt, cutting expenses – obviously beginning with non-essential commodities (and, believe it or not, I heard you can live without video games). Now, that's a Fallout, eh? And it is already happening. 26 million Americans have applied for unemployment benefits. Europe isn't doing much better: unemployment rises in Spain, Italy and Poland. Experts doubt a quick return to normalcy. But Pawel Miechowski calms my apocalyptic inclinations:
If there's a major collapse in the world, we'll all feel it. No matter if you're making games, tractors, or ear buds – this will affect countries that have to maintain schools, roads, bridges and emergency services. But regardless of the times, people need entertainment. I'll use a brutal analogy: one of the most valuable goods in times of war is vodka – which goes to show we need escapism and a tad of fun even in the worst of times. You don't necessarily have to spend $200 on a AAA game; you can look for discounts and pay 20 bucks for a game that will yield dozens of hours of fun. Video games provide the kind of entertainment that will be in high demand – they're relatively inexpensive, but suffice for many hours. […]
Pawel Miechowski, 11 bit studios
This does not mean that people of the industry are all thrilled by the perspective of the pandemic. Let's not forget the biggest casualties of this virus as far as gaming is considered: the E3 and The Last Of Us: Part II, as well as the uncertainty surrounding this year's launch of next-gen consoles. Then, there are long-term results, aftereffects that will come after the crisis.
[...] A situation on the brink of a state of emergency may affect consumer optimism, and the propensity to buy entertainment products will decline. It's too early to rule out the possibility of an overall negative outcome. While the industry is doing well, the long-term impact of the current situation remains unknown. Studios will have to deliver new products in the new reality of remote work. It will certainly change the market.
Joanna Staniszewska, Flying Wild Hog
The CEO of Destructive Creations, Jaroslaw Zielinski, shares that opinion, with a larger dose of pessimism:
I'm absolutely not worried about our industry. Events got hit hard, as did physical sales (which affected us, too). But development is possible remotely, and sales of games have gone up because people are bored at homes. We really can't complain in the gaming industry; in fact, we're lucky as hell. What worries me is the general condition of the economy after the storm passes [...]. New bailout taxes are a given, and the question is how much of an impact they'll have on us. Since gamedev is still standing, what contribution should we make to help others? We're not that rich.
Jarek Zielinski, Destructive Creations
Perhaps – at least in this respect – we need not be afraid of anything indeed. A few postponed releases (apart from The Last of Us there's also Wasteland 3 – and I'm worried about Ghost of Tsushima), low physical sales and a few cancelled events do not seem to be particularly troublesome (especially if you compare this with the tourism industry, which basically was completely shut down overnight).
By far the most disquieting issue is the manufacturing and distribution of PS5 and Xbox Series X, slated to release in late 2020. The lockdown and the resulting reduction of manufacturing capacity – as well as curbed money flow in the markets, including gaming – all have the potential to convince Sony and Microsoft's owners to delay the next generation. Buying a new game for your kid is one thing, but spending a few hundred dollars for a brand new console is something different.
Regardless of the outcome, we know the coronavirus does impact the industry. Recent reports have even suggested that the PS5 presentation (originally planned for May) has actually been accelerated. And while it might seem good news, the decision actually signifies disrupted plans and modified work rhythm of a big corporation, which isn't that good anymore.
