As the coronavirus pandemic has spread across the United States in 2020, millions of Americans — including millions of parents with young children — are stuck indoors.
Many of those folks are turning to video game as a means of passing the time, and the game industry has seen a massive spike in business as a result. In March 2020, the game industry had its biggest March in over 10 years; sales of game consoles, games, accessories and game cards topped $1.6 billion, according to The NPD Group's monthly report.
It's a rare example of an industry that's seen a major upswing in revenue during the pandemic — a bittersweet victory for game companies, which have also implemented working from home policies and are facing the same struggles as everybody else.
"Gaming right now, globally, is having a moment," Xbox head Phil Spencer said in an interview with Business Insider last week.
"Gaming is a social and community connection for many people, and as physical distancing is requiring shelter in place, is requiring that people are physically apart, the social connections and community connections that the games industry brings to people is just expanded."
The runaway success of Nintendo's "Animal Crossing: New Horizons" is a standout example of Spencer's claim: The Nintendo Switch game has become host to virtual weddings, holiday, and birthday celebrations. And just this past weekend, over 27 million people flocked to "Fortnite" to take part in an interactive virtual performance by Travis Scott.
At Microsoft, which owns Xbox, Spencer said the company has seen growth across every sector of its business, from console sales to usage of services like Xbox Live and Game Pass.
"We track what we call 'new to Xbox customers,' — new to gaming customers — people that we're seeing for the first time," he said. "And we're seeing a big flood of new people come in to gaming."
At the same time, the video game industry is made up of thousands of people who are all experiencing the same global crisis as the rest of us — from the bug tester on the next "Halo," up to and including the head of Xbox, Phil Spencer. It's a bittersweet victory.
"You wouldn't wish this is the way we get here," Spencer said. "We've talked [internally at Microsoft] about this. It's about, 'How do you feel that gaming is doing well at a time where the world is hurting?'"
The next Xbox console, the Xbox Series X, is scheduled to arrive this holiday season. Austin Evans/YouTube
It's a situation that I can relate to: Media companies, including Business Insider and our parent company Insider Inc., are benefitting in some ways from the extra time that people stuck at home now have to consume media. There's also more interest than ever in the news right now — there is a worldwide pandemic, after all.
As we see readers come to us in waves, I've seen friends and family members lose work and enter the ranks of the 20 million-plus newly unemployed. It's understandable to feel a level of guilt associated with that success — success at a time when so many people are struggling, when so many people are sick and dying, when society feels like it's falling apart.
Spencer reframed the situation: "Our opportunity is to stand on our principles and our values and be there when our customers need us," he said.
"We want to be very thoughtful and not exploiting the situation. We're not putting in place any different business tactics or other things. We're just trying to keep all the services up, trying to keep the games enjoyable, keeping our networks safe and secure. And being there at a time of need. I'm proud that we can provide this activity for people."
Xbox boss Phil Spencer says that the pandemic is driving a 'big flood' of new gamers, but it's a bittersweet victory: 'You wouldn't wish this is the way we get here'
Gaming is thriving during the pandemic, a rare example of an industry that's succeeding amid the economic shutdown. But it's a bittersweet victory.