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Is The Gaming Industry’s Pandemic Boom Over?

KoreaGameDesk Team by KoreaGameDesk Team
August 25, 2021
in Gaming, Gaming Industry
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There is a question lingering in the minds of many gaming enthusiasts for some time now. Is the gaming industry’s pandemic boom over? Countless analysts and game lovers are pondering over this one thought. Likewise, game companies are dreading this seemingly inevitable truth. But is this true? The answer to this question is quite simple. Every good thing runs out of luck at least once! The gaming industry boom was all about a large migration of first-time gamers into the gaming culture. 

What Was The Pandemic Boom In The Gaming Industry?

The pandemic came out of nowhere and affected the lives of countless people across the globe. There is no denying that it was most detrimental to a large array of industries and livelihood. However, despite the carnage it left behind, the pandemic also ensued a golden era of the gaming world.

Locked in their houses, most people had very little to do to spend their otherwise occupied time. It was important for everyone to follow the stay-at-home orders to avoid any further spread of the virus. But, as a result of that, many physical activities were paused due to lack of physical presence. Even the developing countries were quick to adapt to the digital culture, and the blessing for gaming came. 

Before the pandemic, no doubt esports or gaming community had a large number of followers. Players and gamers across the globe were very much dedicated to the game they follow. However, after the pandemic started, many non-gamers also started to engage themselves in varieties of games.

People of varying ages were quick to spend time playing on their console or mobile. Particularly the mobile gaming industry got a big boom. Many gamers who were first-timers started playing on mobiles only. On the other hand, the world of competitive esports was booming with followers. Many esports leagues and games gained their highest following in the months followed by the pandemic restrictions.

Market Capitalization and Rise Of The Gaming Industry

The gaming industry was never in a dilemma or crisis like other industries when the pandemic started. On the contrary, companies largely benefitted from several of the restrictions imposed during the pandemic. As new people started to play games, the gamers count also was rising. As a result, the total sales of individual titles were up by a large margin, and the gaming industry was in cloud heaven.

Big gaming companies like Tencent and Microsoft were quick to grab this opportunity. Tencent went on an acquisition spree in the meantime. The Chinese Gaming conglomerate ended up acquiring over 10 companies during this period. Sony released its latest sensation, the PlayStation 5. Few markets and industries could profit from this pandemic, and the gaming industry was one of them.

The 3N’s of Korean Gaming also ripped up substantial profit from the pandemic restrictions. Nexon, NCSoft, and Netmarble hit record high sales during the pandemic. Korea was always known for its acceptance and craze for esports and gaming. Even before the pandemic, there was a high demand for gaming in Korea. However, after the pandemic, there was a large upscale of all kinds of gaming avenues. The gaming industry took over all major areas of business. People of all ages started to engage themselves in various games. This led to the boom of the mobile gaming industry in Korea. 

Read: Tencent to Acquire UK-Based Game Developer Sumo Group For £919 Million

How Has The Pandemic Boom In Gaming Getting Affected Lately?

As the pandemic took over almost everywhere across the globe, people were forced to retreat to the safety of their homes and stay locked up. But it came as a blessing in disguise for the gaming industry. People started to download more games and engage themselves in them. As a result, gaming companies enjoyed a high peak of gaming hours and profited heavily from the same.

But this happiness was not going to last forever. As soon as the pandemic threat started to go down, governments of different countries lifted the stay-at-home restrictions one by one. As a result, people were able to go out of their houses again. Now for so long, they were involved in several gaming activities to keep themselves busy. But with the pandemic restrictions no longer in place, it was never any doubt that people will choose to get some fresh air rather than play game. 

Apart from the dedicated group of gamers, other people who had earlier shifted to gaming started to withdraw themselves from the virtual medium and engage in more outdoor activities. As a result, the overall gaming activities started to go down.

The large chunk of people who migrated to gaming was never a permanent part of the gaming world. They were there only to pass the time while being locked up in their houses. Thus it is no surprise that they would enjoy all sorts of outdoor activities leaving behind gaming. This has been the major change that has occurred since the withdrawal of the pandemic restrictions. As a result, the pandemic boom in gaming has started to go down. 

Effect on the Korean Gaming Industry

The Korean gaming industry was not indifferent to the cons of the post-pandemic crisis in the gaming world. The three big Ns in the South Korean market- Nexon, NCSoft, and Netmarble all dealt with huge losses due to the sudden fall in gaming numbers. This is also fueled by the absence of any prominent new releases and the rise of labor costs. Nexon suffered the most in terms of revenue in the second quarter of this year. Their revenue saw a dip of 13%, this time going as low as $507.3 million.

The operating profit of the company also went down by 42%. The PC game sales were affected heavily by losing a large player base in the post-pandemic setting. Not only in Korea but Nexon also suffered heavy losses in the Chinese market too. Dungeon Fighter, a viral game in China during the pandemic, also started to lose out on subscribers and daily active player count.

Other companies also were not behind in terms of losses incurred in this period. NCSoft’s operating profit for this period saw a dip of 46%. This was because there was a huge dip in the daily active player count, which also affected the company’s daily sales. In addition, the daily sales dropped due to decreased transactions in popular pay-to-win games like LineageM and Lineage2M.

NCSoft also raised their employees’ salaries, and it also contributed to the dip in operating profit for the company. Netmarble’s operating profit saw a plunge of more than 80% in this scenario. In line with its competitors, Netmarble also raised the salaries of its employees. Naturally, with lower sales, the operating profit took a great hit in the process.

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Tags: gaminggaming industry
KoreaGameDesk Team

KoreaGameDesk Team

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