Gaming Breaks User and Network Records during Crisis, with New Game Consoles on the Horizon

After several months of anticipation, Sony and Microsoft have finally revealed details of their next-generation game consoles. In late February 2020, Microsoft announced details about Xbox Series X’s specifications. Sony followed its rival’s announcement by revealing more detail about its new game console, PlayStation 5 (PS5), in March 2020. Both consoles are planned for commercial launch in the 2020 holiday season. Despite the coronavirus concerns in the manufacturing sector, Sony recently expressed that ongoing coronavirus issue have yet to have any major effects on the launch of PS5.

When taking a look at the new consoles, there are a number of common features. Both Xbox Series X and PlayStation 5 are built with AMD’s Zen 2 Central Processing Units (CPUs); Xbox Series X’s CPU supports 3.8 GHz speed compared to PlayStation 5’s CPU 3.5 GHz speed. Both consoles offer Solid State Drives (SSD) that support faster load times compared to Hard Disk Drives (HDDs), which are used in the existing generation consoles. Microsoft supports a higher storage capacity, with 1TB of SSD storage, while PlayStation 5 will only support 825 GB. Both of the new consoles will include 4K Blu-ray drives. Xbox Series X boasts 12 teraflop Graphics Processing Unit (GPU) capable of up to 120 fps, which is twice powerful as its predecessor, Xbox One X. Sony’s PS5 will support 10.28 teraflop GPU, which is more than double the power of its previous generation PS4 Pro. While both companies beefed up specification in their new hardware, their price points have yet to be announced.

Sony’s latest console, PS4 Pro, was launched in 2016 and Microsoft’s latest console, Xbox One X, launched in 2017. Game console shipment declined 14% in 2019 as gamers held onto their console investment until the launch of next-generation consoles in 2020. Although Nintendo Switch sales were strong, with more than 15 million unit shipments in 2019, they could not offset the overall game console unit sales decline. With Sony and Microsoft confirming the long-awaited next-generation consoles launch later this year, the console market is expected to rebound in 2020 and see growth.

In addition to new generation consoles’ commercial launches, the ongoing COVID-19 outbreak also has an impact on the gaming market. As many countries impose stay-at-home notice to their residents in an attempt to control the spread of virus, consumers’ adoption of digital entertainment is increasing. There is increasing content consumption in gaming and video streaming as schools are closed and social distancing measures are applied in many cities and towns across the world. There have been reports of increasing sales in game console units in many markets; for example, there has been significant increase in Nintendo Switch and other game consoles’ sales in South Korea between February and early March. Verizon reported that U.S. video game usage during peak hours has gone up 75% since the quarantine went into effect. Similarly, Comcast reported a 50% to 80% increase in gaming downloads during the COVID-19 outbreak.

As governments continue to control the spread of virus, there is no certain date of when social distancing measures will be lifted. It will vary country to country, but in the short term, there will definitely be increasing demand for home entertainment applications, driving adoption of video streaming and gaming platforms. However, it is noteworthy that COVID-19 has had some inevitable impact on game console supply chains. Nintendo Switch consoles are sold out in many of the retailers in the United States. Nintendo did not elaborate upon the reason for current short supply; however, in February, the company did cite potential delays in Switch shipments due to the COVID-19 outbreak. There have been disruptions in the manufacturing processes that supply game console peripherals to major console vendors. Since a lot of electrical equipment manufacturing companies are concentrated in China, COVID-19’s impact on game console supply chains will depend on how quickly the manufacturing sector manages the disrupted conditions. Considering improving virus conditions in China, the majority of manufacturing is likely to be up and running soon, but there can still be delays in logistics worldwide. Better coordination and planning of supply chains will be crucial for game console vendors to compete market shares. When next-generation consoles enter the market, driving competition, short supplies will be detrimental, especially around the critical launch window. The right price points are also an important factor in securing high sales volumes since economic uncertainty amid the COVID-19 crisis has negatively impacted consumer confidence indices.

An unprecedented increase in online media consumption can also have an impact on network capacity. Major online game platforms are forced to deal with a surge in demand; for example, Sony mentioned that it will be slowing PlayStation game download speeds in the United States to maintain internet stability and that it is working with internet service providers in Europe to manage download traffic. From the network operators’ perspective, millions of people forced to work from home, coupled with students staying at home, has had a significant impact on network usage, and will continue to. Operators will also need to micro-monitor network performance to assure network stability. While some investment has already been made in increasing capacity, proactive investments going forward may be required in order to facilitate the increasing traffic we are experiencing during this unprecedented time. Broadband Customer-Premises Equipment (CPE) vendors can take advantage of the surging demand by supplying advanced home networking devices via retail and service provider channels. It is the perfect time to upsell advanced Wi-Fi devices supporting mesh, Wi-Fi 6, and other home networking devices that support high throughput such as MoCA 2.5 or G.hn devices.