The coming video game renaissance


For as far back as this Alphavillain can remember, video games have not felt like they have been “cool”. But they’ve always been popular.

Those who openly admitted to playing them were shunned at school by those who played them in secret, and even though many claim to have grown out of the practice by early adulthood, you’ll struggle to find an older (probably male) millennial who can’t help but smile at the mention of “stack with rock launchers”.

That might all change though. Thanks to the various enforced isolations put into place by governments around the world to combat the coronavirus pandemic, the public have returned to the world of video games en masse.

From Neil Campling of Mirabaud:

If you’re absolutely in need of a Switch right now, it appears the only way to acquire one is to pay way above MSRP. So stock is effectively only available via (price gouging) TPS (third party sellers). In the U.S. the cheapest Amazon TPS price is $439, and even then that is with a three week delay on shipping. Immediately available models start at $489. And that is for hardware only versions. If you want the Animal Crossing version prices on Amazon begin at $540 and go up to $855. The MSRP for this is $299 and on Amazon, on release day, stock was sold out in five minutes.

The pricing situation is even worse in the UK. The basic original switch (Red/Neon Blue) without games starts at £523 on Amazon and the Amazon Crossing version begins at £645.

The first data is coming through for selling data of Animal Crossing: New Horizons which launched last Friday. Data in Japan looks like the game has sold over 2.5 million units in its first three days. Which makes it the biggest opening for a Switch game in Japan and the biggest opening for the Animal Crossing series by far. (I’m not surprised by the success… I have three copies in this house… three 9-23 year olds obsessed with the game!)

That’s the Nintendo Switch, for those who don’t follow the market closely. (Or pretend not to.) It seems scarcity isn’t just limited to the toilet roll section of your local grocer.

But it’s not just the Switch; Sony’s Playstation 4 is equally unavailable on Amazon:

The only Playstation 4 available is a limited edition version for £349.99, which is around £100 above the going rate elsewhere. 

Many soothsayers on generous payrolls have begun to make predictions of how our societal behaviour will shift if the coronavirus crisis blows over. Some have predicted the death of office culture, the end of fragile just-in-time supply chains and, of course, the adoption by the male gender of furious hand-washing.

Here’s another one for you: having long shunned video games as an inferior (read: societally less acceptable) source of entertainment compared with Netflix, staring at your phone, or pretending to read, the adult world will rediscover what the Gen Z’ers already new: it’s become the premium source of modern entertainment.

What does that mean for gaming stocks? Well that’s anyone’s guess, but here’s how a set of them have traded in the past month:

© S&P Global Market Intelligence 

Time to buy the dip? 

We’d like to cover gaming in more detail when the pandemic is over, so get in touch if you have insights, informed or not:

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