Gaming Sales Still Booming in Midst of Pandemic

September 2020 figures revealed that video gaming business is doing very well.
Courtesy: Mat Piscatella, The NPD Group

Even being in the midst of a COVID-19 pandemic and adjusting to a different way of life has not slowed the video game industry in the United States. According to the latest financial report by The NPD Group, video game spending totaled $4.3 billion just for the month of September and a stupendous $33.7 billion for the year. Video game consumer spending in September 2020 saw a 10 percent increase from September 2019. While there is a lot of uncertainty within the world today, what is for sure is that the video game industry continues to prosper despite it.

I’m always fascinated by financial numbers when it comes to video games because I am curious to see just how lucrative gaming can be and the numbers also help to explain why the gaming companies make the decisions that they do. While, as gamers, we appreciate the creativity and love that are put into the formation of gaming products, the fact is that these companies are in business to make money. Understanding this fact allows me to better comprehend the mindset of the organizations and see things from their point of view as businesses. That is why I don’t spend time ranting about them because their priorities as a company will be different than my priorities as a consumer. That does not have to be a bad thing.

Particularly in the United States, there is this notion that “the customer is always right.” Other than God, nobody can ever be right in every situation. There can be times when consumers are unreasonable, rude, ungrateful, and churlish. Both sides have the responsibility of doing their part to ensure the video gaming industry stays healthy. Where we all hope the rubber-meets-the-road is that both businesses and consumers come away getting what they want whenever a transaction is made. That should always be the ideal hope.

Marvel’s Avengers, Madden NFL 21, and NBA 2K21 are in the Top 5 despite criticism online.
Courtesy: Mat Piscatella, The NPD Group

What I find most interesting about the Top 20 games list for September is that three of the top five games on the list have been some of the most heavily criticized titles by both video game media and websites such as Metacritic. Marvel’s Avengers (#1), Madden NFL 21 (#3), and NBA 2K21 (#5) are the three games that brought in strong sales for their respective publishers. So the three games that seem to be generating a lot of negative responses from consumers are the same games consumers have been running to buy. How can this be explained?

Number one, it must be understood that there is a difference between fact and opinion. We can all admit guilt to proclaiming a game as being either good or bad based on our personal preferences that have nothing to do with whether the game is really broken or not. Next, most consumers are not going to take the time to give feedback or post reviews in general. This is also true for gamers. It is usually the more hardcore gamers who take the time to regularly visit video game news sites, join messages boards, create websites (like me) and YouTube channels, and post reviews. In many cases, casuals typically outnumber the hardcore and their indicators are in the numbers, not in being the loudest group. Furthermore, we will not hear from many of the consumers that are enjoying the games they purchased because they are too busy playing those games. As a result, the amount of sales is used as a factor in determining if the consumer likes the product.

Let’s think about this from a business perspective. A company may see that websites like IGN and GameSpot are giving its newly released game a 6 or 7. From there, the company reps see low user review scores on sites like Metacritic and a series of YouTube videos criticizing the game. It would seem like the game is being poorly received. But then as sales figures come in, the same game is ranked in the Top 3 that month and among the Top 10 for that year. Rather than feeling like the latest release was a failure based off opinions, the company is celebrating because the sales are indicative of success. I’m not surprised at how Electronic Arts is celebrating the strong sales of Madden NFL 21 in spite of all the criticism. Equally so, I’m not surprised that Square Enix is not panicking at the loss of online players for Marvel’s Avengers and is expecting them to return once new content is released. Sales are the indicator that companies will use to show whether what they are doing is working or not. If the criticism does not affect revenue, then it can be ignored. This may not be what we, as gamers, want to hear but it is the truth. That is why the most powerful thing a consumer can do is to pull his/her money out of a company that he/she believes is not delivering a satisfactory product. The numbers will always speak louder than reviews and critiques.

My other takeaway from the report is that Nintendo just continues to be a dynamo in the current gaming climate. Nine of the 20 games listed were Nintendo titles. Except for Super Mario 3D All-Stars (#2) and Animal Crossing: New Horizons (#8), all of the other Nintendo games on the list have been out for at least a year. It is unbelievable in 2020 to still see Super Mario Odyssey, The Legend of Zelda: Breath of the Wild, and Mario Kart 8 Deluxe still appearing so high on these lists. That is the reason why the games are holding their value at still costing $59.99 when they’ve been on the market for multiple years.

A major shout out to Mat Piscatella, a video game industry analyst at The NPD Group, for the information discussed in this post. Along with the above video, you can also visit his Twitter page for more financial analysis of the gaming industry. Video gaming is making big money and we still haven’t even reached the holiday season yet. As the Arch Rivals halftime studio announcer always said, “More to come.”

-TVGA

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