eResearch | The gaming and eSports industry has been growing at a fast pace with the introduction of cloud-based gaming and multi-million dollar competitions, but the recent Covid-19 pandemic has brought some material implications to the industry.
In light of Covid-19, almost all eSports league events, competitions, and conferences have been cancelled until further notice, but as consumers face government-mandated or self-isolation within their homes, there has been a spike in gaming activity.
As home-bound consumers play more and more games, US-listed companies such as Activision Blizzard Inc. (NASDAQ: ATVI), Electronic Arts Inc. (NASDAQ: EA) and NVIDIA Corporation (NASDAQ: NVDA), and Canadian-listed Enthusiast Gaming (TSX: EGLX) and Kuuhubb (TSXV: KUU) have seen an increase in online gaming and user activity.
Increase in Video Gaming Activity Due to Covid-19
As the Covid-19 virus keeps people stuck at home with many unemployed due to social isolation effects, overall video-game internet traffic has increased by 75%, according to Verizon (NYSE: VZ).
Stream Elements, an online streaming platform tool, reported a 66% increase in the number of hours for gaming-related streams in Italy, the country with the highest Covid-19 death rate. As the rest of the world quickly locks down, online viewership for Twitch and YouTube Gaming has increased 10% and 15%, respectively.
During the lockdown in China, starting in January, Chinese live-streaming sites Douyu and Huya experienced increased viewership and Gen.G saw an increase of almost 20% in Chinese viewers on Douya and Huya for its Player Unknown’s Battlegrounds (PUBG) and League of Legends (LoL) teams.
Increased Gaming User Activity:
- Activision’s new battle-royale version of Call of Duty, Warzone (callofduty.com/warzone) passed 15 million players in three days after launching on March 10.
- Enthusiast Gaming, which owns YouTube channels and gaming websites, recorded a 40% week-over-week traffic surge and its Sims Resource site (thesimsresource.com) doubled its page views in a week.
- Microsoft’s Xbox Live (www.xbox.com/en-US/live), a console gaming platform, suffered down-time as it shut-down due to a spike in user activity.
- Valve’s Steam (steampowered.com), a popular PC gaming platform, hit an all-time high with 20 million concurrent users on March 15.
- Valve/Hidden Path Entertainment’s Counter-Strike: Global Offensive passed a record 1 million players.
Activision Launches Battle Royal Style Call of Duty
In an effort to compete against popular battle royale style games such as Fortnite and Apex, Activision developed Call of Duty: Warzone, a free-to-play battle royale style game for its highest grossing franchise, Call of Duty. The new game has attracted immense attention as it saw 6 million downloads on its March 10 launch with more than 15 million people playing the game across PC and consoles over a 3-day period, besting the previous record of 10 million people over 3 days by Apex Legends.
Battle Royale is a category for games in which up to 100 players compete and eliminate each other until only one victor is left. The “last person standing” type of game mode was coined the term “battle royale” by the popular third-person shooter game Fortnite, and since, competing gaming companies have started developing their own battle royale style games.
Activision has made the right moves in entering the battle royale competition, as it is now comparable to the launch of Fortnite, which reached 10 million players after two weeks, and Apex Legends’ launch, which reached 25 million players after one week.
NVIDIA GeForce Memberships Selling Out
A month ago, NVIDIA Corporation (NASDAQ: NVDA), a computer chip and processor developer, launched GeForce Now, a virtual cloud gaming platform where users can install existing PC games to play remotely without the need of downloading or storing game memory.
The launch of GeForce Now comes after the launch of Google Stadia, a subscription-based gaming platform which leverages cloud infrastructure to provide users with the ability to stream games directly onto major platforms such as desktop, console, smart televisions, and mobile.
NVIDA does not develop games but instead licenses games from developers, and it has struggled in its early stages of launching its platform due to reports of numerous game titles disappearing from its platform due to potential intellectual property reasons.
Nevertheless, in light of increased gaming activity due to the Covid-19 pandemic, NVIDIA reported sold out paid memberships for its GeForce Now platform in Europe with anticipations for its American memberships to be sold out soon.
eSports Focuses on Online Events as Live Events are Cancelled
Gaming and eSports was once an activity dominantly done within a consumer’s home but as professional eSports leagues and tournaments started to dominate global viewership, live competitions and conferences related to gaming quickly became common in major cities around the world.
Unfortunately, due to the recent outbreak of the Covid-19 virus, which has forced governments around to world to enforce social distancing to help contain the virus, live eSports events have been cancelled.
Some of the major eSports events cancelled include:
- Activision’s Overwatch and Call of Duty League events in March and April
- Blizzard canceled its events in China
- Electronic Arts’ competitive gaming events for its Apex Legends and its EA Sports titles
- Electronic Entertainment Expo 2020
- EVE Online Fanfest 2020
- Game Developers Conference 2020
- PAX East
However, with major live sports leagues shut down, eSports leagues are returning to their online roots and have a huge opportunity to fill the sports void. As millions of people stay home to stop the spread of the coronavirus, online audiences continue to grow. Carlos Rodriguez, CEO of G2 Esports said “our viewership numbers are going up 30%.”
Companies to Watch
Industries around the world are adapting to online environments as the Covid-19 virus forces consumers and employees to stay at home, and industries such as video gaming and eSports may advantage with the existing online community. Here are a few companies to watch:
Canadian-Listed Companies:
- Enthusiast Gaming (TSX: EGLX): www.enthusiastgaming.com
- Kuuhubb (TSXV: KUU): kuuhubb.com
US-Listed Companies:
- Activision Blizzard Inc. (NASDAQ: ATVI): www.activisionblizzard.com
- Electronic Arts Inc. (NASDAQ: EA): www.ea.com
- NVIDIA Corporation (NASDAQ: NVDA): www.nvidia.com
- Zynga Inc. (NasdaqGS: ZNGA): www.zynga.com
Hong Kong-Listed Company:
- Tencent Holdings Limited (SEHK: 700): www.tencent.com
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