Video games experienced strong, double-digit growth in 2020 as a result of the COVID-19 pandemic. The ensuing nationwide lockdown drove consumers to seek out entertainment options while confined to their homes.
Despite the complexities of the pandemic, which resulted in severe operational challenges for manufacturers and other stakeholders along the supply chain, both Sony (Gamefinity in South Africa) and Microsoft (Prima Toys & Leisure Trading in South Africa) managed to launch their next-generation consoles, the PlayStation 5 and Xbox Series X, respectively. These launches were largely responsible for reviving growth in static consoles, as growth had been dwindling in line with the lengthening lifecycles of the PlayStation 4 and Xbox One.
E-commerce saw massive gains in 2020, as gamers transitioned to shopping online, with the largest gains being seen in video games (hardware), where the sales share through e-commerce channels tripled. Attractive bundles and promotions were also available on key e-commerce platforms such Takealot.
In the forecast period, demand is expected to be driven by static consoles and digital software. The recent launch of the PlayStation 5 and Xbox Series X should encourage many gamers to upgrade their consoles, while attracting many first-time buyers, owing to the unforeseen hunger for entertainment, induced by the lockdown.
The continued shift towards digital gaming software is expected to persist in the forecast period, as fast, stable internet penetration rises in South Africa. This consumer demand is evident from the next-generation consoles, as Sony launched a digital edition of its PlayStation 5 in 2020, which has no disc drive, while Microsoft launched the discless Xbox Series S.
E-commerce is set to continue growing in the forecast period, as the behaviour formed during the height of the pandemic in 2020 is expected to persist. The strongest growth is expected to come from hardware, as consumers become accustomed to choosing their preferred gaming console online, by conducting their own research, and then proceed to order on e-commerce platforms.
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This report originates from Passport, our Video Games research and analysis database.
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