The gaming industry feels tight after the rise of the pandemic

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San Francisco (AFP) – At the height of the pandemic, video games offered solace to people in isolation. But now that life is slowly returning to pre-crisis normalcy, and inflation is rising, game companies are feeling the pressure.

Makers of gaming consoles, accessories and software are experiencing the same sort of post-pandemic effect as the tech titans who saw a business boom while Covid-19 fears kept people close to home.

The pressure has been exacerbated by steep inflation causing them to tighten their belts and gaming fatigue after years of relying on indoor entertainment.

Early in the pandemic, “people flocked to Twitch, both streamers and viewers,” said Brandon Williams, who goes by “BWpaco” on the Amazon-owned platform, where gamers stream video game action.

“But I’ve talked to quite a few people who have stopped streaming because they’re sold out or because it’s not for them,” the 30-year-old streamer added.

“Or they don’t have time anymore since they went back to work in person.”

Twitch viewership that skyrocketed during the pandemic is down but remains above what it was in 2019, according to twitchtracker.com.

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Matt Piscatella, an analyst at market research group NPD, estimated that people in the United States will spend about $55.5 billion on games in total this year, less than last year but still 28 percent more than the year before. to the 2019 pandemic.

US video game giant Activision Blizzard, which Microsoft is in the process of buying, reported that sales in the first half of this year were down, with gamers spending less time on its powerful “Call of Duty” franchise.

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Nvidia, the California-based maker of high-performance graphics cards popular with gamers, recently issued an earnings warning due to “declining revenue in video games.”

Even spending on mobile games shows signs of weakening, according to analysts.

“Higher prices in everyday spending categories such as food and gas, return on experiential spending such as travel and attendance at live events, a lighter release slate of new games, and continued hardware supply constraints of next-gen consoles likely contributed to the decline seen in the second quarter,” Piscatella said.

Omdia analyst Steven Bailey said delayed releases of highly anticipated titles like “Starfield” and “Suicide Squad” also contributed to a “correction” to the rise of the pandemic that was inevitable.

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The boost that new titles give to video game sales is a wild card that will likely benefit the industry going forward, as gamers often flock to get their hands on the biggest releases.

Piscatella expressed his hope that the video game market will stabilize in the next year and then return to steady growth.

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The rising cost of living due to inflation is forcing gamers to make decisions with their money, but that doesn’t mean they’re leaving the game, the analyst noted.

More than three-quarters of US consumers play video games, and subscription services like Xbox Game Pass and PlayStation Plus help lower the cost, Piscatella said.

The effects of the pandemic on video games have gone beyond the economic realm, giving rise to a trend of gamers seeking “comfort games” that emphasize cooperation rather than competition.

The explosion of Nintendo’s community-building game “Animal Crossing” is an example of this phenomenon, with players banding together to sustain virtual villages.

And, according to streamer BWpaco, viewers start listening to Twitch channels like they would a radio broadcast while their attention is elsewhere.

“They’re just lurking,” the streamer said.

“I feel like now things have reopened, and people are busier, they have it as background noise.”

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