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Will The Gaming Industry Survive Covid-19?

Self-isolation, social distancing, mandatory stay at home orders. All of these things seem like a dream come true to today’s gamers. You could say we have trained for this moment. Some people might even get a chance to play some of the titles they bought on that Steam sale back in the 2010’s or before. The reality of the situation is much more grim. A global pandemic has killed tens of thousands of people and it’s possible that when all is said and done, the gaming industry may be one of COVID-19’s victims too.

How is it we could witness the second great video game collapse? Well, it’s sort of like what Mufasa once said to Simba. Twice if you count the not so live “live action” version. Four times if you’re into obscure Japanese comics and musicals. Anyway, it’s one of those circle-of-life sort of things. In other words, the video games industry is very much dependent on a few things that depend on still other things in order to survive and COVID-19 is threatening all of them simultaneously.

Plauge INC title screen


The Simpsons weren't the only ones predicting the future.

COVID-19, which China totally pinky swears was not their fault is still totally everyones' problem. The approach of world leaders can be best described as putting everyone in a global timeout in an attempt to turn the world off and on again and see if the problem goes away. Even the phrase “Stronger Together” has been used without irony in feeble attempts to get everyone to stay at least six feet apart. It’s times like this that remind us what the genie once told Aladdin in two versions of the same movie, even cosmic power has limits.

The same applies to economics. As two weeks of staying home gives way to two months, stress and strains are placed on the economic engine that powers what we know as modern life. These prolonged strains not only have caused the proverbial check engine light to come on but to also blink ominously. It’s a scary proposition as those in power have essentially hit the brakes on a system that has no guarantee will ever get going again. It’s akin to console gaming in the 1980s, no checkpoints, no save files, or even continues. Those games only had the essentials, not only due to hardware limitations but also of time constraints. Their target market usually only had the short window of time after homework and before dinner to find out the princess is in another castle. If you weren’t good enough or fast enough, Mom would pull the plug and all your progress, like stock value, was gone.

Mario talking to princess Peach


It was at this moment when your mom pulled the plug.

In fact, that’s a pretty good description of the present worldwide situation. No, not gaming back in the 1980’s, that would be rad. I mean aside from all the toilet paper hoarding, we’re stuck with nothing but the essentials. Millions upon millions of people have found out that when the chips are down, their job was not “essential” regardless of how essential it was to them. Likewise celebrities, especially “influencers”, who were already on the top of the non-essential persons list, keep reminding us how incredibly awesome they have it stuck in their luxury. They can sing John Lennon’s “Imagine” into their phones from their second mansions or private yachts or wherever. Unless they manage their money like Krusty the Clown, imagining there’s no possessions will never apply to them. For the rest of us, winding up with nothing is a very real and possible nightmare scenario.

In terms of essentialness, the gaming industry fits in that segment of the market somewhere between cosplay makeup and anything with an “As Seen on TV” label on the box. In fact, I’m going to say something that some gamers may consider blasphemy, or at least a vile heresy. Gaming is not all that important. It is the very definition of nonessential. It’s that thing we waste time on when we have time and money to waste. Right now, most of us have an abundance of time thanks to our government enforced grounding.

Millions of those same people no longer have jobs or an assurance of job security, meaning there’s no money to spend on non-essential things. The unfortunate truth about the circle-of-life is that it can easily change into the spiral-of-death. Here’s how it goes. If there’s not enough people buying games, then there won’t be a financial incentive for companies to create them. If the game studios can’t keep going then the hardware makers no longer have developers to make the games to run on their hardware. No hardware, no studios, no games. Not even the always arrogant PC master-racers are immune to this spiral. No one’s falling for the argument that you need that $10,000 gaming rig for work or school anymore, especially when work and school are managing to get by with just a Chromebook.

$19,000 Gaming PC

For the low low price of 16 stimulus checks!

Timing is the other factor in all of this. When the average triple-A title now takes years and millions of dollars to produce and additional years and millions of dollars to patch and update so it’s worth playing, all of that depends on a steady and reliable source of money. If that source dries up, or otherwise suddenly becomes unreliable, then the development pipeline grinds to a halt and everyone goes home. Even when the “all clear” is given that pipeline of artwork, animation, game engine development, AI logic, and testing aren’t going to just start back up again for free. If a company shuts down because it ran out of money due to COVID-19 mandates, it’s still going to be just as out of money when the mandates are lifted. What about stimulus money, you ask? Maybe, but considering leaders in the U.S. government have blamed video games for among other things, mass shootings and rape culture, don’t be surprised if the video games industry finds itself at the bottom of a very long list of business vying for money to start again.

Perhaps all of this might seem like a bit of a stretch. At the same time ask yourself why Tesla is making ventilators right now instead of focusing on their core business of making and selling electric vehicles, along with other automakers. While it’s true that Tesla is trying to be a good socially conscious corporate citizen helping out, it is also true that trying to sell premium priced eco-warrior status symbols right now would put Tesla on a ludicrous-speed path to financial ruin. Unlike Tesla, which makes real things in the real world, the game studios can’t exactly retool their production lines and that puts them in a significant disadvantage to avoid being “non-essentialed” out of existence.

Gamestop claiming to be essential


Most lawmakers can't tell the different between Gamestop and the rest of the industry.

There’s one other piece to the circle-of-life for the gaming industry that COVID-19 threatens. It’s the psychological impact. Not so much of the fear of the virus itself, but the psychological damage of enduring all of the negative impacts of this crisis. Some have and will suffer this more than others, especially those who have already lost loved ones. The psychology of job loss and the life changing fallout that comes with that stays. Anyone with grandparents or great-grandparents who endured the hardships of the great depression may now start to appreciate their quirky “use it up, wear it out, make it do or do without” habits they still followed long after they retired. Most often, they went without anything that wasn’t a necessity and continued doing so for decades. Life often teaches harsh lessons and we’re all being homeschooled at the moment. Depending on how far reaching the consequences are in dealing with the present pandemic, the minds of millions of gamers will forever be changed so that they too, only focus on what matters most.

Right now, you can start to see some of the cracks forming in the foundation of the industry and some companies are better able to handle the stress. Nintendo for instance, has been around since 1887. They have endured two world wars, more than one economic depression and a "lost decade". They should be poised to survive, albeit what's left will remain to be seen. The same can be said for Microsoft, since they also are into that whole, Windows, thing. I mean, if all they did was put out game consoles with names that sound like algebra equations, I would be worried. Sony on the other hand, is already giving away free games. Sony's website lists the following as its firt three products. Consumer electronics, smartphones, and game and network services. Unfortunately three of the things people are least likely to buy during an economic downturn. Let's be honest for a second here. If you had to choose between a Sony smartphone and toilet paper you would choose the TP since you could use the it and that was before a global pandemic. Sony's gaming division is their profit center right now. As that shifts due to COVID-19, it isn't clear if Sony is diversified enough to survive for long. True, the PS5 has been announced, but if the death spiral mentioned above kicks in, it won't be enough. Perhaps they should have been making medical equipment instead of smartphones or the Emoji Movie.

Twith and Mixer

We're still essential too right? Right??

I apologize if this all seems to be too much doom and gloom especially when we’re all yearning for some good news. Keep in mind, all of the above is wild speculation not based upon any projection models. Although given some of the accuracy of some projection models, wild speculation might be just as good. We do know that a lot of people are out of work and that has definite and serious impacts not only on them, but upon the economic health of their communities and beyond. I’m hoping that most industries, including video games, will survive and make it through. I certainly don’t mind being wrong (I’m married - I’m used to it). But the longer this drags on, the more and more likely it is for certain industries to go under and usually that means non-essentials first. When I think about it all, I feel like Mulan's father when he once (possibly twice?) said "I think I'll go pray some more".


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