Gaming companies like Microsoft, Sony, and Nintendo have all experienced a decrease in sales due to the pandemic's aftereffect on the industry.
As the tightened COVID restrictions were eased, sales of the leading video gaming companies plummeted.
In their separate gaming companies for the three months that concluded in June, Microsoft, Sony, and Nintendo each posted results that were less than satisfactory. The figures demonstrate a general decrease in the amount of money spent by consumers on video games.
According to data from NPD, a market research company, Americans spent $12.4 billion on games in the second quarter. This is a 13% drop from the first quarter.
However, there are most certainly a great number of contributing variables that have had an effect on the gaming industry as a whole.
Gaming: Pandemic After Effects
Gaming reached an immense height of popularity during the pandemic as an effect of lockdowns in most countries all over the globe.
Gaming provides an outlet for entertainment, fun, and adventure for consumers who are looking for ways to spend their time indoors.
Gaming gave an outlet for people to have fun and continuously play games together despite being locked in their homes.
However, due to the change in consumer behavior that is also rooted in increasing inflation and the shift to post-lockdown, the gaming industry is taking a hit.
According to CNBC, in the June quarter, Sony's gaming division reported a two percent drop in sales, while the division's operational earnings fell by roughly 37 %.
Additionally, the corporation gave a downbeat assessment, reducing its full-year earnings prediction by 16%.
Furthermore, Microsoft's overall gaming revenue fell by 7% from the previous year.The company's Xbox console sales fell by 11%, and its income from gaming content and services fell by 6% during the same time period.
Video game publisher Activision Blizzard, which is currently in the process of being acquired by Microsoft, has recorded a decline in net profit of 70 % and a decline in revenue of 29 %.
Also, Ubisoft, the company that made Assassin's Creed, said that its net bookings dropped by 10% less than expected.
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Shortage for Gaming Consoles
However, the gaming industry is not just affected by the ongoing pandemic or the looming recession, but its performance is still affected due to the shortage of the materials needed in the production of the hardware.
From April to June, Nintendo saw a decline of 15 % in its operating profit. The global shortage of semiconductors, which prevented Nintendo from producing and selling as many Switch consoles as it wanted, was cited as the cause of the company's decline in sales.
Furthermore, the number of PlayStation 5 consoles sold by Sony during the quarter was 2.4 million, which is a marginal increase from the 2.3 million units sold during the same period a year ago.
The PlayStation company has set a goal of shipping 18 million PS5 units in 2022 and is counting on the lifting of lockdown measures in the critical manufacturing hub of Shanghai as well as an increased sales push during the holiday shopping season to help it reach this goal.
The limited availability of console hardware is one of the most significant factors that contributes to poor performance in the gaming industry.
