MCV/DEVELOP News, events, research and jobs from the games industry
Despite the upcoming November launch of both the Xbox Series X/S and the Playstation 5, one industry analyst expects the Nintendo Switch to be the number one console this Christmas.
The NPD Group’s Mat Piscatella posted a series of end of year predictions – including the tidbit that while sales of Microsoft and Sony’s new consoles will “sizzle,” high demand and the associated hardware shortages will ultimately give the upper hand to Nintendo (who faced hardware shortages of their own at the outbreak of the COVID-19 crisis).
Of course, the Switch is also the cheaper option – even when compared to the budget Xbox Series S – and one with a more established library than early adopters can expect from the Xbox or Playstation. Piscatella also notes that households are expected to buy multiple Switches – a more likely reality with the handheld-only Switch Lite than with a home console, which even the most disgustingly wealthy parents likely expect their children to share.
Overall, the NPD Group expects U.S. consumer spending on video games to reach $13.4 billion in the combined November and December 2020 holiday period – a 24 per cent increase compared to last year. Alongside the obvious jump in revenue resulting from the new hardware, Piscatella points out the increased spending on gaming during the pandemic.
This revenue isn’t coming from console sales alone. Piscatella expects gamepad and headset spending to set new holiday records. Accessory sales have been growing over the past few months, and this is only expected to increase alongside the new consoles.
Additionally, due to the pandemic, spending on “experiential gifting” (such as concert and sport tickets) is obviously going to be reduced, leaving consumers with additional funds to spend on gaming instead.
Subscription spending is also likely to increase – particularly with Microsoft leaning hard on its Game Pass offering, with EA Access joining the service on November 10th.
However, there is “significant market uncertainties” around these predictions, the NPD Group notes:
“While there is always high uncertainty in a console transition year, 2020 has obvious additional factors at play that did not exist in prior periods. It would be difficult to overstate the impact that pandemic-driven changes in consumer behavior have had on the video game market.
“A surge in video game players and engagement through the spring and summer months depleted market inventory of existing hardware, while fueling a corresponding surge in content and accessory spending. The impact of these changes is expected to continue throughout the remainder of the year.”
