The video game market in Germany grew by 6 percent to €6.2 billion ($6.7 billion) in 2019 thanks to a rise in online service subscriptions and in-game spending.
According to the German Games Industry Association, known simply as Game, sales of game hardware actually dipped by 2 percent in 2019, but consumers drove overall growth by spending more on services and software.
The chart below, based on data collected by market research and analytics companies GfK and App Annie, breaks down that spending increase, and shows that €3.9 billion ($4.2 billion) of the market’s overall €6.2 billion ($6.7 billion) income was generated by in-game purchases, online subscriptions, and software sales (‘purchases’).
The amount spent on online services alone rose by 31 percent in 2019, showing that German players dropped more cash on subscriptions like Xbox Game Pass and Origin Access as well as online plans for the likes of Xbox Live and PlayStation Plus.
Commenting on the news, Game managing director Felix Falk said the German games market had done “amazingly well” in 2019.
“Up to now, the years at the end of a console generation have been comparatively weaker economically. But we aren’t seeing any of that now. Revenue models like in-game purchases and fees for online services have become important columns for the games market,” they explained.
“This means that, alongside the classic purchase of computer and video games, the long-term use of game titles is playing an ever greater role. The dynamic growth shows once again that games are one of the most important drivers of the digital world.”
League of Legends, which is one of the most popular live service games in operation, still receives regular content and event updates. While it has been Riot’s primary focus for the past decade, the developer last year announced six new titles were in development, such as the recently revealed Valorant. With over 2,500 staff and multiple video and tabletop games in development, Riot is among the largest studios in the industry; the company’s sheer scale presents serious logistical issues compared to smaller outfits, but Hymes says it’s still too early to evaluate the full impact of lockdown on development.
“We were able to launch Riot’s first mobile game, Teamfight Tactics, while we were working from home last week, which went very smoothly, all things considered. It’s still too early to tell, but as this crisis evolves, we’ll continue to evaluate all the potential impacts it will have on our business.”
However, the pandemic has been less forgiving on the events sector, as business and consumer events both large and small have been cancelled or postponed in recent weeks. This has had a “devastating impact on businesses within the events sector” according to David Lilley, head of events at ReedPop UK.
A considerable aspect of the esports industry revolves around merchandise sales, which have suffered as result of the lockdown. This is made worse by the economic downturn as businesses close temporarily or, in some cases, permanently. In the UK, the government has introduced a furlough scheme which can compensate workers for 80% of their salary; while the scheme should allow people to keep a roof over their heads, it will still dramatically affect their spending power and disposable income suddenly becomes less disposable during a global crisis.
“Online sales have fallen substantially, but we can work on various elements of our new projects, ready to launch when this is all over,” says Lee Townsend, CEO of entertainment merchandise specialist The Koyo Store. “We need to still be here when that time comes.
Sonny Waheed, CMO of esports organisation Vexed Gaming, suggests that esports can be a “force for continuity and good at a time of great uncertainty.
“Mental health is something that has always been front of mind, both within our organisation and without. Some of our most senior staff have been impacted by mental health issues in the past and are always seeking to engage with anyone — whether colleagues, players, fans or in the outside world — if they are asked for help,” he writes.
“It’s crucial that we continue to foster this kind of environment within the esports community as we work through the coming weeks and months.”