Gaming business ride a global wave, spur fortunes of companies

It has been one action-packed summer for video gaming companies. From those selling consoles to companies that make gaming software to the ones that ride the entire ecosystem, every company has had its cash registers ringing.

The gaming business has been such a money-spinner in the last quarter that it is changing the fortunes of companies.

Nintendo enjoyed its best-ever quarter. Gaming has emerged as Sony’s big hope at a time when its other business lines appear bleak. Others are raising their sales forecast for the year and now preparing for the holiday season.

If the quarterly results of these companies were to sustain for another quarter or two, the world could turn into a, well, play station!

Nintendo’s incredible growth

Japanese gaming giant Nintendo reported profit that were its best ever in the April-June quarter, as sales of its Switch and Switch Lite rocketed past five million units. Add over 10 million copies of Animal Crossing: New Horizons only made the quarter incredible for growth. It has had to ramp up production of Switch gaming consoles.

The most amazing feat for the product has been selling 50 million units of gaming software outside of the holiday season. The challenge will be to sustain the momentum in the coming holiday season.

As part of its holiday season strategy, Nintendo plans to launch the Pikmin 3 Deluxe on October 30. More and more titles for its fans would keep them hooked on to the new gaming console at a time when rivals Microsoft, Sony and others are expected to launch their new high-end consoles ahead of the festival season.

Sony: Hitting it out of the park

Gaming rival Sony Corporation is enjoying a similar ride too. Its gaming and networking services division so a 32 percent jump during the April-June quarter.

For the electronics to entertainment giant, it was the largest contributor to growth during the quarter. Subscribers for the PlayStation Plus have now hit 45 million, which will mean more monthly revenue from its loyal customers.

The PS5 is scheduled to be launched ahead of the festival season. If people have to stay indoors for an extended period and their choice of home entertainment can be sustained, it could do some wonders to the company.

For Sony, gaming and financial services division was the only bright spot when it announced the quarterly numbers recently. It said that revenues may not grow and operating profit could see a sharp fall.

The company also said that its motion picture business could take three years to recover. Put in perspective, gaming has turned out to be a money-spinner in these troubled times.

Gaming mania sweeps the US

Sales of video games in the US saw people spending time playing on their consoles across various platforms. Sales in June for the industry were up 26 percent to $1.2 billion, the highest ever seen in the month.

Call of Duty: Modern Warfare was the second bestselling game across all platforms, according to NPD.

When Activision Blizzard announced its quarterly results last week, it raised the bar for the sales expectations for the full year. The strong growth seen in demand is now making the company release the next version of its blockbuster hit, Call of Duty.

Its launch of free to play Warzone in March also enjoyed the benefit of timing as, Activision said, there were 75 million players enjoying the game since its launch. Its customer base has now hit 400 million, making it one of the biggest media companies in the world.

Take Two Interactive Software sold over 15 million units of Grand Theft Auto V, the seventh edition of the game first launched in 2013, during the quarter. Since its launch, the game has sold 135 million units.

While the ride for these companies has been nothing short of incredible, a reality check for those who spend on the titles should be in order.

Investors are now worried about how long will the boom last. No one seems to have an answer. With the ease in lockdown, usage is expected to come down surely. Worse, the rising unemployment across countries will leave consumers with lesser money in their pockets to spend on gaming.

Like it happens in gaming titles, a booster shot can help power ahead of the enemy. The gaming industry may soon need that.

Admin Sportz Front

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