Gaming companies basked in the busiest years they have seen in video games during 2020 and 2022. When the COVID-19 pandemic hit, markets all over the world were forced to implement lockdowns which meant everyone had to stay at home and spend less time out in public. Naturally, as one does, we all turned on the TV and either started watching Netflix, which saw huge growth in 2021 before losing millions of subscribers this year or booted up a video game console to play a game. As the world starts to go back to normal and COVID-19 infections are basically non-existent in certain countries, these activities have now become a “hobby” again meaning fewer people get time to play as much as they used to. Sony is proof of this. The company reported a 15% drop in user engagement year-on-year ending 30 June.
According to Seeking Alpha, Sony’s executive deputy president and chief financial officer Hiroki Totoki said gameplay time among PlayStation gamers has dropped drastically over the past few months. In a report, he revealed that game time is now down 15% year-on-year in the three months ending on 30 June 2022. However, Totoki says this was expected and in fact, Sony foresaw the drop coming but they didn’t expect it to be as high as 15%
It doesn’t take a scientist to see the facts here. While the growth of the gaming market was a welcome addition to the lockdowns implemented around the world due to the COVID-19 pandemic, countries are now implementing office jobs again and users are too busy to spend as much time playing games.
“The company has seen a much lower engagement level than we anticipated in our previous forecast. We believe the main reason for this is that the growth of the overall game market has recently decelerated as opportunities have increased for users to get out of home as COVID-19 infections have subsided in key markets.”
Sony has a plan to counter this drop in engagement though. The company is accelerating the supply of the PS5 console and promoting the new PlayStation Plus services as two key entry points for gamers. The company plans on pushing these agendas over the last half of 2022 in combination with its release of God of War Ragnarok in November.
However, the new PlayStation Plus service hasn’t seen much traction over the last two months. Sony only saw a 2% growth in PlayStation Plus subscribers at the end of June 2022 in comparison to June 2021. The company lost subscribers due to the COVID-19 lockdowns being eased but at the same time, the membership numbers haven’t grown by much either.
Sony has also decided not to adjust its forecast for PS5 console sales from the estimated 80 million units by 31 March 2023. The company revealed last week that console sales were flat in the first half of 2021 but has opted not to change the target goal. This means Sony would have to sell 15 million consoles before the end of March next year.
Source: Seeking Alpha