Europe’s video game startups are among the biggest winners of the coronavirus. Now, they’re out to convince consumers to keep playing even as lockdowns lift.
Online sales of video games surged in recent months in countries across Europe. Everywhere confinement was enforced, it was followed by an immediate spike in game orders and downloads, according to data by Foxintelligence.
In France, the first week of confinement mid-March was marked by a 265% jump in video game sales, not counting consoles, says Foxintelligence. The company compiles online shopping data from 425,000 registered users in France alone, and more in the UK, Germany and Spain.
“Video game sales were driven by new consumers, especially women,” says Edouard Nattée, founder and chief executive of Foxintelligence. Women, people 40 years old and over, and, more broadly, casual gamers — all the unusual suspects that video game makers usually struggle to lure — flocked to play during lockdown, he says.
While the pace of purchases slowed over the weeks, video games are still up 102% over the entire confinement period in France — March 17 to May 11 — according to Foxintelligence.
“Video games increased tremendously in both reach and intensity in the first phase,” Nattée says. “Over time, consumers aren’t likely to keep buying games as often, but the widened audience will typically stay.”
Mages, slayers and a nine-tailed fox
In France, Nintendo’s Switch console went out of stock for a while at sellers including Amazon, a testimony to its popularity half-way through confinement. On the game side, best-selling titles from Animal Crossing to Call of Duty became more popular across the region, boosting editors from Nintendo to Activision.
But smaller European businesses also benefited.
Swedish game maker MAG Interactive said it saw a clear increase in usage in all countries that implemented severe restrictions on social interactions. The average number of active users was up by over 25% at the end of March, compared to the company’s average from the previous quarter.
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Dutch mobile game maker Playrix beat its own revenue and downloads records in April.
French startup Shadow is another example. Founded in 2015, the service is very popular among video game players who use it to play power-draining titles even on old computers or tablets. The startup thrives on people playing games like League of Legends, an online battle arena concept with characters including mages, slayers, and a nine-tailed fox called Ahri.
League of Legends was the confinement favourite among Shadow users, says Florian Giraud, the company’s head of strategy and growth. Blockbusters including shooter games Fortnite and Call of Duty also rank high, and players rank from intense users to more occasional, casual gamers logging on from their tablets, he says.
“Connections to Shadow surged in France as soon as confinement started, and the same thing happened in Germany and the UK,” says Giraud. The number of users connected each day increased by 60%, while time spent on the service grew by a similar proportion, he says.
Social distancing for a while
The way Shadow’s service works is by letting gamers tap computing power directly in the cloud, feeding into its seven data centres. Where a decent computer for playing games will typically set you back a couple of thousand euros, a subscription to the online service runs between 12,99€ and 40€ per month.
The lower price point is recent: Shadow cut its original 30€-for-all package to attract a broader crowd, beyond hardcore gaming fans. Faced with increased demand, the startup has started moving new customers to a waiting list. Pre-order now and you’ll get access only at the end of the summer.
“Consumers are being far-sighted,” says Giraud. “Beyond lockdowns, consumers are betting that social distancing is going to last, and they’re planning accordingly by pre-ordering now.”
Poland’s QubicGames is also going the way of lower prices. The game maker started a month-long sale on its titles in the Nintendo Switch store, many of them, including one featuring the adventures of gnomes “in the magical lands of Gnomia”, going for less than 1€.
Keeping the new crowd
But price is only one part of luring new clients and convincing them to stick around and become repeat spenders.
Shadow is convinced that building several offers tailored to different crowds will also help. After it realised a lot of new connections were coming from remote workers, the company has started brainstorming how to repackage its services for companies and professionals.
The startup had 70,000 subscribers at the end of last year, a third of which in the US. It raised €30m in October, for a total of €100m since it was created.
For Shadow, growth beyond the coronavirus lockdown looks like it will depend less on demand, and more on how fast it can build data centres to match.