Gaming Industry in Time of Corona

• Games at an all-time high
• Corona struggles
• Opportunities in Germany's gaming market

Eighteen million Germans have played games with others since the start of the Covid-19 crisis. Around 20 percent played online with friends, 16 percent played locally with family members, 14 percent played online within gaming communities and 8 percent played online with family members. According to a Nielsen study, the number of respondents that said they were playing more due to Corona has increased by 23 percent compared to March 2020.

Games at an all-time high

According to mobile app store intelligence company App Annie, the downloading of gaming apps soared in the first weeks of the lockdown. In China for example, the average weekly downloads in February (the first month of strict anti-Corona measures), jumped 80 percent compared to the average weekly download level for the whole of 2019.

A similar trend is reported by Steam, the biggest gaming platform worldwide with more than one billion registered users. The platform recorded an all-time high on April 4, when more than 24.5 million active users were on the platform and 8.2 million played simultaneously. The previous record of 18.8 million active users was set in pre-Corona times.

In a study by the start-up Genome, gaming companies were among the few industries expecting to come out of the crisis stronger with a revenue increase of 10 percent or more.

It is little wonder that revenues for video game hardware, software, accessories, and game cards topped USD 1.6 billion in March 2020. According to The NPD Group, a game market intelligence firm, this marks the highest reported sales for a March month since the USD 1.8 billion recorded in March 2008.

Corona struggles

But there are also gaming companies that are struggling. More specifically, the smaller and younger studios that rely heavily on publishers to fund their project. With major industry-related events such as Game Developers Conference postponed and Electronic Entertainment Expo cancelled, they are finding it hard to establish contact with potential partners for their game projects.

Bigger studios are also facing obstacles to their game development efforts. Although the industry is heavily digitalized, working from home becomes a challenge when huge datasets need to be downloaded and altered on a daily basis by software developers. The strict security measures normally taken by the studios are hard to maintain in the very different environment of the employee's home.

Moreover, there are some parts of game development where close interaction is essential. In many locations it is impossible to do motion capture of actors for realistic in-game-movement. Game soundtracks can also cause a headache for game producers as some big titles rely in part on orchestral music. The idea of creating an ensemble of ten or more musicians is often just not possible at the moment.

In a survey of 2,500 industry professionals, 33 percent claimed that they had to publish games later than planned as a result of the Corona crisis.

Opportunities in Germany's gaming market

The world's largest gaming exhibition gamescom - held annually in Cologne - will not take place physically this year. Instead, there will be a digital version of the event.

This decision might enlarge the audience significantly as gamers can participate from all over the world without having to shoulder the high costs of traveling to Germany.

Germany is the fifth biggest gaming market worldwide after China, USA, Japan, and South Korea. Turnover for 2020 is estimated to be around USD 6 billion and the country boasts 34 million regular gamers.

There are 651 gaming studios and publishers in Germany and 128 universities that offer game related courses.

There is a strong professional and graduate network that international gaming companies can use to advance their business in Germany.

Public game funding has been renewed and will be continued until 2023. Game developers in Germany receive EUR 50 million annually. From this perspective, it makes sense for international studios to consider an office in Germany.