How Corona Virus affected game industry

2020 has just begun, but we probably already know its main newsmaker: the coronavirus COVID-19 has already entered 162 countries and has affected all areas of life. The epidemic brought down oil prices and brought the world to the threshold of an economic crisis, paused major sporting events that even World War II had not been able to stop before. Esports has also suffered from the virus – the industry has virtually lost the opportunity to assemble teams for international tournaments, but computer sports championships can also be held online. We describe how esports adapt to the realities of life during a pandemic.

Coronavirus effect

The COVID-19 epidemic began in December 2019 in Wuhan. Despite the fact that the epicenter of the disease occurred in an economically insignificant region of China, by January the virus could affect the leading index of the British exchange FTSE 100, which fell by 2%, and the performance of other stock markets. Soon, oil quotes also began to decline, and in March – after Russia withdrew from the transaction with OPEC – collapsed below January 2016.

In parallel with this, the epidemic began to penetrate the cultural life of society: many countries, including Russia, Germany and the USA, banned the holding of mass events. It included such major exhibitions as the World Mobile Congress in Barcelona, ​​E3 in Los Angeles, the classic Venice Carnival, the annual economic forum in St. Petersburg, as well as all major sporting events.

The epidemic affected the e-sports industry even earlier – at first one of the largest CS: GO tournaments was held without spectators – IEM Katowice 2023and then similar measures had to be taken for ESL Pro League Season 11 and franchise leagues FLASHPOINT Season 1. However, the loudest episode occurred on March 12 – on this day the organizers canceled the major ESL One Los Angeles 2023which was supposed to start in three days. Many clubs managed to come to the United States to play in this tournament, as its results could radically change the balance of power in the world ranking and affect which teams will get to The International. Now there is a possibility that fans of e-sports will not be able to see even the World Cup, scheduled for August.

Pause Tournaments

Tournament operators, and especially ESL, suffered more than others in this situation. In 2019, Valve limited the number of majors – the largest championships of the regular season in Dota 2 – from nine to five, and therefore getting the right to organize one of them was a great success. This chance was made even more valuable by the fact that a year earlier the ESL could not agree with the developers – other companies organized similar tournaments. Now THAT found a common language with Valve, but a virus intervened in their plans.

If the COVID-19 epidemic happened earlier, the ESL would have a chance to minimize all losses – stop selling tickets, return the funds spent on renting platforms and equipment, warn teams and take responsibility for their placement in Los Angeles. However, Valve canceled the major three days before it began – in such circumstances, the ESL was left in a bind.

Two weeks before the major, the company suffered a similar setback: it was decided to hold the IEM Katowice tournament at the last moment without spectators. At the same time, many guests of the championship have already arrived in Poland to watch the games, and ESL had to urgently return the money spent to visitors. In e-sports, this was the first precedent for abandoning the audience, and to smooth the picture, ESL also held a kind of action: the company’s vice president visited local bars where fans watched the tournament and presented them with a different merch from fan shops.

On March 15, it became known that Valve canceled the next major of the current season – EPICENTER, which was to be held in Moscow in early May. This means that the schedule of tournaments, which even seemed too tight for many, has now almost been empty, at least until June. Director of Epic Esports Events Evgeny Kalganov explained to Cybersport.ru that even if the epidemic is over soon, it will be practically impossible to fit EPICENTER, ESL One Los Angeles and other tournaments for the remainder of the season.

It seems logical to transfer tournaments online. From a budget point of view, such an option would even be beneficial to most operators.

However, in reality, in such a scenario, there are too many unobvious problems: the difference in time zones, the distance to the tournament servers, the lack of administrators to resolve contentious issues. Eugene Kalganov said that Valve is discussing various options with the organizers, but transferring majors to online seems to him an unlikely option. On the other hand, online tournaments of the Parimatch League, Midas Mode or Reshuffle Madness format in the current conditions will be able to get abnormally high audience performance.

New format for eSports clubs

The impact of the epidemic on eSports clubs is not so obvious. Unlike traditional sports, in this industry most competitions – in theory – can be transferred online, in which case teams can play them from home. However, even though organizations do not profit from selling tickets at stadiums, refusing to attend such events carries certain financial risks. To understand them, we turned to the General Manager of Virtus.pro Sergey Glamazda.

He explained that modern clubs make a big bet in the work on the production of media content. In this aspect, tournaments are not only a chance to win prizes, but also an opportunity to expand the range of media formats: add reportage videos to entertaining materials that will allow the audience together with the players to survive all victories and defeats.

However, without LAN-championships, it will become much more difficult to produce such content – many traditional formats were based on the fact that players found themselves in a tournament environment. “Now you have to adapt,” commented Glamazda.

If the last offer of CEO VP is truly implemented, the club will be able to become a pioneer in the format of a kind of e-sports reality show. True, at first he will have to agree with the organizers of the competition – without their consent the team will not be able to show tournament games. Given the conditions of the epidemic, the moment is perfect for experimenting with content: the club’s target audience is likely to switch to homework or training and is ready to consume any media formats.

However, teams in the realities of the epidemic have another problem, which will be more difficult to solve. Due to the lack of LAN tournaments, organizations cannot fulfill their contractual obligations to sponsors.

Apparently, other teams understand this. We asked for comments from Natus Vincere and Gambit Esports, but their representatives said that the clubs are still busy analyzing the situation and are not ready to share information about possible changes in work.

Opportunity Time for Streamers

In a pandemic, talking about the “winners” will be inappropriate, but the closest to this status are streaming platforms such as Twitch, Mixer and YouTube.

So, since the beginning of December 2019, the total number of viewing hours on Twitch has increased by 10.4% – almost by 273 million hours in numerical terms. Another key indicator adheres to the same trend – the average number of viewers on the platform over 90 days increased by 250 thousand people (almost 25%). At the same time, peak audience indicators decreased – this indicates that the increase in the user base is not associated with any specific event that was broadcast on Twitch. The number of viewers has grown evenly on all channels and in different time slots.

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However, the number of streams became the fastest-growing Twitch indicator: if in December there were an average of about 45 thousand broadcasts on the platform, then by March there were already 55 thousand broadcasts. Many of them are celebrity broadcasts, including from the sports field. For example, the Phoenix Suns basketball club launched an NBA2K broadcast to end the season, even in the virtual world. Star players Trey Young, Luca Doncic, Ja Morant and others followed his example.

On March 15, Real Madrid goalkeeper Thibaut Courtois announced that he would participate in an e-sports tournament in F1 car simulator, and even earlier NASCAR racers, who organized an online championship on the same game, came to this initiative. Arsenal FC midfielder Mesut Ozil also returned to streams – according to rumors, in 2019 he lost his place in the starting lineup due to his passion for games.

Twitch did not spend a cent on such a powerful PR campaign that has already paid off. Given the fact that many states only began to close borders in March and recommend that people isolate themselves from society, there is every chance that the platform will soon add even more in all quantitative terms.

At the same time, e-sports studios that cover tournaments and traditionally have been the main suppliers of spectators for Twitch, were in a difficult position due to COVID-19.

The most acute problem is facing Russian-speaking companies – due to the cancellation of CS: GO and Dota 2 tournaments, they were virtually left without the ability to produce content. Maincast suffered the most, which at the end of 2019 acquired the rights to display all ESL championships – according to unconfirmed information, the deal cost the studio € 11 million. Maincast representatives declined to comment on the situation.

At the same time, American broadcasting teams will be able to continue working, albeit in the home format – the most popular Call of Duty and Overwatch leagues in the USA have been transferred to the online, because within the same region participants will not have any problems with ping.

Feast of the gaming industry during a pandemic

Other market players in the gaming industry also gained audience through the COVID-19 epidemic in the world. So, on March 15, the main digital distribution store for PCs – Steam – broke its own online record: 20.3 million users were logged in to the service at the same time, more than a million of them played Counter-Strike: Global Offensive.

It is worth noting the new “royal battle” from Activision Blizzard – Call of Duty: Warzone, which came out at a very good time. The release coincided with the beginning of the introduction of quarantine in most countries, so in less than a week the audience of the game exceeded the mark of 15 million users. In 2019, Blizzard experienced a series of upheavals: the company was embroiled in a political scandal with protesters in Hong Kong, released the game Warcraft III: Reforged with a lot of problems, and also replaced the COO. After these events, its shares fell markedly in price.

Against this background, the financial crisis, which after the outbreak of COVID-19 affected all spheres of life, was not so noticeable in Blizzard’s performance. In February, the value of corporation shares reached a record (at a distance of the year) mark of $ 64.37.

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Similarly, the value of the shares of another gaming giant – Electronic Arts – was changing. In the period after the detection of the virus, the publisher managed to achieve better results for the year, although it cannot be argued that there is a direct correlation between these events. After the WHO announced the coronavirus pandemic, EA stock crashed to the level of August, losing almost $ 20 compared with early March.

The shares of all gaming companies showed the same drop on the night of March 11-12. The very next day, their cost began to grow again, so – taking into account the example of Twitch and other gaming companies that took advantage of the situation in the world – it is highly likely that Blizzard, EA and other studios will be able to normalize the situation: at the beginning of the year they all significantly increased their performance .

The data confirm that at the current stage, the COVID-19 pandemic could not cause serious damage to the video game economy. Quite the contrary – the introduction of quarantine has led many digital entertainment to significantly increase their audience performance. This affected both the games themselves and related services, such as Twitch. In addition, large gaming publishers survived the financial crisis relatively painlessly – shares of EA, Blizzard, Zynga and other companies were able to maintain stability.

In e-sports, the consequences of the epidemic were more noticeable: the organizers had to cancel the most important tournaments that were the flagships of the industry. Because of this, a certain vacuum has arisen in the field of computer sports, which online championships can fill if they want to experiment with a similar format. However, it is still premature to talk about the effect of coronavirus on the video game and e-sports industry in the long term – it will all depend on how soon scientists can defeat the disease.