Coronavirus Has Had A Massive Impact On Gaming

As the coronavirus pandemic in China has continued to develop, it has led to many people questioning how various industries will be impacted. It's easy to forget about all of the small moving parts in the world that can be affected by something like this, the gaming industry included. It can be difficult to properly anticipate how the gaming industry has been or will be altered by the coronavirus, but we have some pretty decent ideas. 

As pointed out by Barron's Tae Kim, research shows that an outbreak could actually serve to strengthen the online gaming market. It makes sense when you think about it: with people less enthusiastic about outdoor activities during a health scare, they're more likely to spend plenty of time in front of the television with a controller in hand. However, that upward trend may not be exactly sustainable. Shutdowns at gaming companies will naturally impact the industry in significantly negative ways, especially when one considers how many video games are manufactured in China.

In other words, we're already seeing how gaming has been impacted by the coronavirus. Beyond speculation, there have been a few tangible issues in recent weeks.

The coronavirus has also affected the realm of esports in a big way. Just last week, we reported that the Chinese League of Legends Pro League was postponing its season indefinitely. That decision was met with plenty of fan support, but it was nonetheless a blow to the Chinese competitive scene. Without an idea of when the season will resume, it's looking more and more likely that the LPL will be unable to participate in larger events like the League of Legends Mid-Season Invitational.

Around the same time several other video game events and tournaments were either delayed or outright cancelled. Blizzard announced its intention to cancel all Overwatch League matches in China as a way of ensuring the safety of the players. A Pokemon Video Game Championships event was cancelled in Hong Kong, while Polygon reported the cancellation of the Counter-Strike: Global Offensive WESG Asia-Pacific Finals, which was to be held in Macau. 

A recent article from Business Insider has pointed to market research suggesting that the outbreak may cause significant delays within the gaming industry, beyond even the ones we've seen thus far. 

For one of the most prominent examples of these concerns, we only need to look at a few of this year's most anticipated product launches. Though we still don't have official release dates or pricing information, we are expecting the new Xbox Series X and PlayStation 5 consoles to arrive during the 2020 holiday season. According to a notice from investment and financial services company Jefferies Group, that may no longer be a realistic window.

"If [company] shutdowns exceed a month or so, game schedules will be delayed," read the note from Jefferies Group. "New consoles may likewise suffer supply issues from a prolonged disruption, ahead of their Fall 2020 planned launches."

As Jefferies group goes on to point out, nearly 100% of games manufacturing is done in China. That figure doesn't even account for all of the other creative work that is outsourced to China from western companies. It makes perfect sense that the industry would basically grind to a halt if further company shutdowns were put into effect. 

As Jefferies Group puts it, "The video game sector is currently manufacturing, or beginning to, a once-in-several-years' product generation change for the 2020 holiday season." That could no longer be the case if this trend continues, possibly resulting in across-the-board setbacks. As you'll see, the effects of these shutdowns are already being felt in other areas.

As part of the ongoing precautions being taken to avoid infection, Nintendo announced that production and deliveries of the Nintendo Switch have been delayed. This means that production has essentially slowed to a crawl on Switch consoles and Joy-Cons, as well as those adorable Animal Crossing-themed consoles and the newly-released Ring-Con.

According to Nintendo, this delay was entirely "unavoidable" at this point. Kotaku, meanwhile, reports the North American and European Switch markets won't be affected.

It's worth noting that Nintendo began moving production of the Switch to plants in Vietnam, due to ongoing trade disputes between the U.S. and China. It seems that those moves weren't as far along as Nintendo had hoped, however. There must still be a significant workforce based out of China for the delays to be so immediate.

As you can see, the coronavirus is slowly but surely having an effect on the gaming industry. Hopefully these companies and competitive leagues will be able to regroup in the near future and come back stronger than ever. We'll be sure to keep you posted on any further updates.