Novel Coronavirus Concerns on the Rise in Gaming

Novel Coronavirus Concerns on the Rise in Gaming

THIS WEEK IN BUSINESS | From high-profile event absences to hardware production concerns, the epidemic's impact on gaming is growing.

We haven't really swelled on COVID-19 concerns in this space before, partly because this site has a U.S. focus and much of the impact of the virus has so far been far beyond U.S. borders. Also, partly because there's a certain amount of panic and racism that seems to accompany any such epidemic, and we've got no interest in fueling either of those.

That said, things have progressed to the point that we can't really ignore it any longer, but thankfully not because COVID-19 (also known as the novel coronavirus) is spreading like wildfire. According to the World Health Organization's latest daily situation report, South Korea is the only country outside China with confirmed cases in the triple digits, and the Americas, Europe, The Middle East, and Africa combine for just 85 cases, about half of which are people who likely contracted the virus while in China. Clearly, COVID-19 is still a serious concern that has killed more than 2,200 people and that number is likely going to grow, but as of this writing, it hasn't necessarily changed the day-to-day life and activities of the average North American gamer.

The reason we can't ignore it any longer in this space is that COVID-19 has started to impact the industry in ways the average North American gamer will likely notice. PAX East (organized by USgamer and GamesIndustry.biz parent ReedPOP) will have a conspicuous absence as Sony has scrapped plans for the show in light of concerns around the virus. It also pulled out of GDC, which will go on without Facebook or Oculus as well. PAX East kicks off next Thursday so there's not much time for a domino effect of withdrawing exhibitors to take place, but there's still three weeks to go before GDC, and who's to say how and where COVID-19 cases will develop over that time?

And even if the epidemic were to stop tomorrow, there's been such incredible disruption in China to this point with various shutdowns that it's unclear how long it would take for the supply chain to fully recover and what kind of knock-on effects this might have on production of everything from mobile phones and Nintendo Switches to critical components that are supposed to power the PS5 and Xbox Series X later this year. Considering the declining sales figures the industry put up last year, how much would another down year hurt the big players? And what would that mean for GameStop, which spent most of 2019 already on the ropes?

COVID-19 is obviously still most alarming for what it could do to actual people, but its impact on the industry has been a growing concern as well.

QUOTE | "We have made the difficult decision to cancel our participation in Game Developers Conference due to increasing concerns related to COVID-19 (also known as coronavirus)." - Sony explains why it is pulling out of next month's GDC in San Francisco. (Facebook/Oculus also withdrew at the same time.) A day before, Sony canceled its plans to appear at next weekend's PAX East.

QUOTE | "There's no redundancy plan for the entire country which is the engine room of the world's manufacturing shutting down for weeks if not months on end." - GamesIndustry.biz's own Rob Fahey considers the possibility of COVID-19 delaying the Xbox Series X and PlayStation 5 to next year.

QUOTE | "The company is frantic and distrustful. You can feel it in every message they send. The structure is falling apart and they're scrambling." - A GameStop assistant manager, one of many employees of the retailer who recently spoke to Polygon about the company's struggles and sinking morale.

QUOTE | "I think this idea that there's a valuation bubble in esports teams is truly driven by the demand of capital wanting to own a piece of this space. I don't think it's very telling about how healthy or not the business is." - MLG co-founder and esports vet Mike Sepso talks about how competitive gaming has changed over the past couple decades.

STAT | $160 million - The amount YouTube reportedly paid Activision Blizzard for exclusive broadcast rights to Overwatch League, Call of Duty League, and Hearthstone competitions for the next three years.

STAT | $65.8 million - Stillfront Group's earnings before interest and tax last year, up 68% over the previous year and a new record for the company .

QUOTE | "We have trimmed the organization somewhat as a natural step after the split and therefore around 20 persons have left their positions with us. This has no effect on our portfolio and the business in general." - Stillfront Group CEO Jörgen Larsson confirms that the company laid off employees from its Kixeye subsidiary earlier this month.

QUOTE | "Metacritic takes issues of potential score manipulation seriously and has a number of policies in place to maintain score integrity." - Metacritic responds to the news that a single person was able to review bomb Kunai's user review score from an 8.1 to 1.7 in just a day.

QUOTE | "I will never again make a game with characters who have knees." - Monster Jaunt developer Nate Buck pays homage to the Nintendo 64 game Kirby: The Crystal Shards and its Impressionist roots.

QUOTE | "There is a dark half of me that really wants to make a punk, almost nihilistic game to get that out of my system. I hate the term 'whimsical,' but people do quite often use the word on things I've worked on. So it'd be quite nice to make something that wasn't quite so whimsical." - Rex Crowle of LittleBigPlanet, Tearaway, and Knights and Bikes fame, has had it up to here with your whimsy.

STAT | 46 to 37 - The final vote count Tuesday as Kickstarter employees voted to unionize, becoming one of the first major U.S. tech companies with an organized work force.

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Brendan Sinclair

North American Editor

Brendan joined GamesIndustry International in 2012. Based in Toronto, Ontario, he was previously senior news editor at CBS-owned GameSpot in the US.

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