US Spending on Video Games Reached Highest Total in Q1 2020
Sat, April 17, 2021

US Spending on Video Games Reached Highest Total in Q1 2020

 

Video games provide that sense of “achievability” and “progress.”  / Photo by icemanphotos via Shutterstock

 

Americans spent a total of $10.86 billion from January to March, an increase of 9% from the year before covering the same period, according to the NPD Group, an American market research company.

 

Q1 2020 Games Market Dynamics

The company’s Q1 2020 Games Market Dynamics: US report highlights that Americans’ consumer spending on video games reached the highest total in history. The demand is driven by digital content spend across PC, mobile, and console gaming platforms. Industry analysts believe that the main event for the sales boom was the Covid-19 pandemic that kept people in their homes since mid-March.

Top titles that US gamers preferred in the said period were Animal Crossing: New Horizon, Doom Eternal, Call of Duty: Modern Warfare, NBA 2K20, MLB The Show 20, Grand Theft Auto V, Minecraft, Dragon Ball Z: Kakarot, and Fortnite.

The NPD Group’s games industry analyst Mat Piscatella said that video games brought connection and comfort to millions of people during the lockdown. Since the public remained indoors, they considered gaming not just an escape or diversion in this challenging time but as a means of staying connected with their friends and family.

 

How video games boost people’s well-being during the lockdown

Swinburne University of Technology’s lecturer in psychology Brad Elphinstone and senior lecturer in games in interactivity Steven Conway explained that people have three psychological needs:

(1) autonomy – the feeling that we have choices and can act by following our values;

(2) competence – about feeling capable of overcoming challenges and being effective; and

(3) relatedness – about feeling connected to others.

If being isolated at home reduces a person’s well-being and happiness, it could be because of reduced satisfaction in one or more of these three psychological needs. For example, people’s autonomy is being undermined as they cannot partake in their usual activities. Their sense of competence may have also taken a hit as they are missing their daily “wins.” Lastly, their feelings of unrelatedness are undermined as they can’t see their family, friends, colleagues, or neighbors as often as they do in the past. Research shows, though, that video games facilitate people’s sense of autonomy as they have that freedom of choice and can complete tasks in the game.

 

 

Video games provide that sense of “achievability” and “progress.”  By playing online, it also provides a sense of relatedness with other players.

Elphinstone and Conway, who are not a part of the NPD Group, emphasized how people are hardwired for connection. They also cited studies that establish a connection between early death and loneliness or increased risk of disease among older people. Caring about their virtual character (relatedness) motivates the players to help others (autonomy) and it also enhances their feeling of competence once they succeed in a task. Nevertheless, it is important to play video games in moderation, the authors added. They believe that as much as playing video games is psychologically valuable, so is exercising, minimizing alcohol consumption, and getting enough sleep to maintain mental and physical health during the pandemic.

Whether it was through virtual reality, PC, mobile, or console, these games drove the growth during the first quarter of 2020.

 

 

Video game hardware market

While there was a decline in other hardware platforms, Nintendo Switch software and hardware experienced a strong sales growth. This created an offset in the hardware platform sales, leading to a 2% increase in the video game hardware market in the first quarter of the year. Hardware sales topped $770 million, NPD data shows. Players buy Nintendo Switch instead of Xbox One because of the former’s two-in-one system that combines all of the past consoles of Nintendo. There is also a lineup of games and the product is affordable.

 

 

The gaming industry and its economic impact

The development of smartphone technologies and computer-enabled video gaming have made it an industry that generates billions of dollars every year. The trend even continues despite the pandemic. According to the American Gaming Association, the gaming industry is a dynamic job creator and a powerful economic engine.

 

 

It provides a stable job to almost two million people in the US and generates billions of dollars in tax revenue. The gaming industry supports more direct jobs than other industries, including the sound recording industry, motion picture, or plastics manufacturing. Employment in casinos reached 559,000, which is equivalent to more than one in 30 hospitality and leisure jobs. Being a professional gamer has also become profitable. There are tournaments organized, such as for the Dota 2 game, where players can win as much as $137,006,506.86. A total of 890 tournaments have been organized for Dota 2.

After Dota 2, other popular video games in terms of prize money are Counter-Strike: Global Offensive ($51,993,555.04 and 3,139 tournaments), League of Legends ($50,731,542.13 and 2,020 tournaments), StarCraft II ($26,369,899.78 and 4,775 tournaments), and Heroes of the Storm ($12,176,741.60 and 401 tournaments).

 

 

Leading gaming content on Twitch

However, the leading gaming content on video live streaming service Twitch in July 2018 by the number of hours viewed was Fortnite. From July 22 to 28, 2019, Fortnite had 24.8 million hours viewed across the network. It was followed by League of Legends (13.7 million), GTA V (13.1 million) Teamfight Tactics (12.2 million), World of Warcraft (10.8 million), and Overwatch (7.3 million). This is based on a survey conducted by database company Statista.

About 40% of all Esports revenues come from sponsorships. There were also thousands of gaming tournaments around the world hosted before the lockdown. This means that video gamers with enough skill can make it a profitable occupation rather than just a hobby.

Meanwhile, Entertainment Software Association, the US video game industry trade association, observed that 54% of gamers are male and 46% are female. The average age of male gamers is 32 while it is 34 for female gamers.

If life under quarantine makes you feel bored, video gaming can provide you with a new meaning for “socializing.” It is important to remember, though, to do so in moderation.