“As consumers have practiced social distancing and observed stay-at- home orders across the United States over the past weeks, many people have turned to videogames as means for finding connections,” says Mat Pascarella, games industry analyst at NPD Group. “Whether together on the couch playing locally, or playing online, gaming has generated increased engagement.” And, from the looks of it, increased revenue.

That’s reflected in March’s 35% increase year-over-year in U.S. retail sales of videogame hardware, software and accessories as
COVID-19 shutdowns took effect, according to NPD. The jump is even more striking when compared to a 26% drop in January and a 29% decline in February.

The declines in the first two months could be ascribed to the fact that both Sony and Microsoft have been planning new platform launches later this year; consumers tend to invest less in old technology as the new consoles approach.

Animal Crossing Effect

The March increase also was driven by the March 20 launch of Nintendo’s “Animal Crossing: New Horizons,” which has sold more than three million copies and drove Nintendo to boost production 10% this year for its Switch device. Switch dollar sales doubled from a year earlier in March, while Sony PlayStation 4 and Microsoft Xbox each rose 25%, NPD said.

The increased sales of videogames raise new prospects for licensed goods, especially in the case of Animal Crossing, which in Japan alone sold more than two million copies in 10 days.  It isn’t clear yet whether Nintendo will have a licensing program behind the title, which has created a fan base that also has attracted the promotional attention of fashion brands.

While Animal Crossing was the top-selling software title in dollars  in March, according to NPD, Sony’s “MLB: The Show 2020.com” was ranked third, the same position as a year earlier, even without the promotional impetus of Opening Day approaching. And Take-Two Interactive’s “NBA 2K20” was ranked fifth, up from seventh a year earlier, even as the NBA season came to a screeching halt.

It remains to be seen whether the sharp March sales increases signal a major break with the industry’s long-standing trends or a one-time boost fueled by homebound consumers hungry for entertainment.

Strong Sales Continue in April

Sales so far in April continued to be strong, says Stephanie Wissink, an analyst at Jefferies. And with a large swatch of consumers anchored to their homes – including the WFH crowd — more gains may be in the offing.

More than 60% of U.S. consumers play videogames and 49% of households having a console, making videogames a “prime beneficiary” of the new normal, says Alex Giaimo, an analyst at Jefferies. One factor is time – specifically the amount normally spent on commuting (54-minute average daily round trip) and a lunch break (36-minute average), freeing up about 90 minutes, some of which goes to entertainment of various sorts, says Giaimo.

Mobile gaming – about 80 percent of U.S. consumers have a smartphone — will most likely be a major beneficiary of the at-home trend, says Giaimo. Eighty-three percent of 1,000 recently surveyed mobile gamers tended to play mobile games at home, says Giaimo.

Facebook launched its gaming app for Android operating system devices on Tuesday (April 20), moving it up from a planned June release partly because competitors in the category such as Twitch and Mixer saw a sharp increases in traffic. Users of the service can follow specific social media videogames stars or games such as viewing feeds from such games as Electronic Arts’ “Apex Legends” or Microsoft’s “Minecraft”.