Yahoo Finance The world is turning to video games amid coronavirus outbreak
As the coronavirus forces companies to shutter their offices across the world and lockdowns go into effect, people are increasingly turning to video games to pass the time and interact with friends and family they may not see in person for the foreseeable future.
And that, in turn, means spikes in users jumping online to play games ranging from Epic’s “Fortnite” to Activision Blizzard’s (ATVI) free-to-download “Call of Duty: Warzone,” which saw 15 million players in just four days following its launch on March 10. EA’s “Apex Legends,” which is also free-to-play, saw 2 million downloads during its first day of availability in February 2019.
In Italy, so many people have been playing “Fortnite” that it’s begun to stress the country’s telecom systems, according to Bloomberg. Valve’s Steam platform, meanwhile, recorded a record 20 million users playing simultaneously on March 15, as the virus began to spread more in the U.S.
With so many people playing, and likely many downloading new games, industry stocks, though hurt by the recent market crash, are still performing better than the broader indices by as much as 10%. And, with two new home consoles from Microsoft and Sony coming by the end of the year, the industry could see greater growth come November.
Millions of gamers online
With schools from New York to California shutting down and millions of kids staying home, gaming networks are seeing a crush of players hitting their services.
Valve Corporation, the maker of the gaming distribution platform Steam, saw a record number of players on March 15, with as many as 20 million players online at one time. That came a month after 19 million people were on the service at once. As of March 17, Steam had 19.75 million peak users.
In Italy the country’s Telecom Italia reported a massive surge in bandwidth usage from players signing on to play games like “Fortnite.” According to the company, there was a 70% increase in web traffic usage in the time since Italy was put on lockdown on March 9.
“We believe video games will be a popular option as directives for ‘social distancing’ continue around the world and people look for stay-at-home entertainment,” Piper Sandler’s Michael Olson wrote in an analyst note Tuesday.
“In particular, the publishers could see an uptick in digital downloads of full games and DLC as well as micro-transactions. Also, with sports leagues suspended, we could see increased participation in virtual sports, such as FIFA (EA) and NBA 2K (TTWO).”
Microsoft’s (MSFT) head of Xbox, Phil Spencer, tweeted on March 15 that the company was seeing increased usage across the board, and that its teams were working to keep the firm’s Xbox Live service up and running.
There have been reports of outages, as more people push the limits of gaming servers. Sony’s Playstation took a temporary hit over the weekend, as did Xbox Live. Popular chat app Discord also ran into problems Monday evening, while Amazon’s Twitch hit a snag on Sunday, according to Downdetector.com.
The lockdowns come as a handful of major titles hit the market from a number of publishers. Activision’s “Call of Duty: Warzone,” Bethesda Softworks’ “Doom Eternal,” and Nintendo’s “Animal Crossing: New Horizons” are all launching around the time of the coronavirus lockdowns.
Gaming stocks are responding
Activision Blizzard, for example, has seen its stock price fall just 6.5% year-to-date as of midday Tuesday, while the Nasdaq was off 19.6%. Take-Two Interactive, which publishes two of the biggest video game franchises in the world “Grand Theft Auto” and “Red Dead Redemption” was down 6.4%, and EA, which publishes everything from “Star Wars Jedi Fallen Order” to the supremely popular “Madden” franchise, was down 11.9%.
“Our comp group of video game publishers has declined 14% since the beginning of the year vs. a 24% decline for the NASDAQ Comp,” Olson wrote in his analyst note.
“With ongoing concerns around leisure travel and other out-of-home entertainment & activities, we believe video game publishers will continue to outperform, along with shares of other ‘stay-at-home’ companies.”
Though the coronavirus boost won’t last forever, the gaming industry could continue to see solid performance as Sony (SNE) and Microsoft launch their latest generation game consoles. Both companies are expected to release their systems, dubbed the Playstation 5 and Xbox Series X, respectively, in November.
Microsoft has already released plenty of information about its console, while Sony is set to announce a slew of data on its system on March 18.
New consoles generally translate to faster game sales, and improved revenue for developers, publishers, and the console makers. Between millions of people staying at home and these new consoles, the gaming industry looks to be one of the few that could benefit from the coronavirus lockdowns for the foreseeable future.
More from Dan:
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Got a tip? Email Daniel Howley at danielphowley@protonmail.com or dhowley@yahoofinance.com, and follow him on Twitter at @DanielHowley.
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