COVID-19 Report

Console Wars - A rising tide lifts all boats

Monday, May 11, 2020 • 1:00 PM EST

Key Takeaways:

1. All major console providers are seeing a sharp increase in both game purchases and subscriptions to their respective online networks.
2. Nintendo has been the biggest winner of late, largely due to Animal Crossing and its in-game purchases.
3. Women have increased their spending disproportionately to men. 46% of new online subscriptions are now from women, as opposed to 39% before the pandemic.

A consequence of the "shelter-in-place" orders and the closure of our go-to entertainment destinations has been the surge in video gaming. In March, Verizon reported a 75% increase in video game usage during peak hours. Many games have implemented queuing systems to moderate the number of requests hitting their servers. And by this point, we've all either heard of, seen or played Animal Crossing. It's clear that gaming is on the rise, but is revenue keeping pace with increased play time? Let's take a look at how the three major console providers, Xbox, Nintendo and PlayStation, have been doing of late.

A quick glance at Gross Merchandise Volume (GMV) shows that all three platforms have benefited from increased consumer spending, which began growing rapidly in early March and peaked by the end of the month. While the spending gradually decreased through April, it has stabilized and is currently trending at ~2x January levels for PlayStation and Xbox, and ~3.8x for Nintendo. Nintendo's outperformance is heavily driven by the popularity of Animal Crossing: New Horizons, the latest release in the social simulation game series. The $70 title (and its slew of in-game purchases) shattered console records by becoming the first game to reach 5 million purchases within a single month.

Weekly GMV Trend - Indexed

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Weekly GMV Trend - Without Nintendo

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GMV Trend - Subscriptions & Games (Indexed)

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Consumers are spending more often, as buyers increased their monthly purchase frequency by ~18% in March-April, (in comparison to the months preceding the pandemic). We're now seeing close to four paid purchases per month per consumer across the category.

Transaction Frequency Per Month

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Consumers are also spending more per purchase, as the average order value across platforms increased by 23%.

Average Order Value ($)

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New online subscriptions, which allow gamers to access multiplayer functionality, also increased by ~3-4x. This increase was fairly consistent across both short term and long term subscription plans, though new PlayStation subscriptions appeared to shift to longer term plans, a phenomenon we can't quite explain.

Subscription Acquisition - Indexed

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Nintendo

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PlayStation

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Xbox

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Finally, the average age of online subscribers has decreased. While 25-34 year olds still make up almost half of all new subscribers, there's been a notable increase in subscriptions in under-25s who now  account for ~35% of all new subscribers.

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Post

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Quarantine boredom, the great equalizer

While the surge in spending seems to apply to everyone, women disproportionately increased their spend. Overall, women are now spending roughly 2.7x what they were before the pandemic (vs 1.9x for men).

Weekly GMV Trend - By Gender

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This behavior is also observed when looking at online subscribers. Over the last two months we've seen a flurry of new subscriptions from females, and are now looking at near equal representation of the two genders across new subscribers. Prior to the pandemic, 2.9% of women in our panel were subscribed to one of the three console provider's online gaming network. This number now sits at 4.2%. Subscribed men, who made up 5.2% of our panel before the pandemic, are now at 6.8%.

Our theory is that men, who tend to spend much more time and money on gaming, were more likely to have the games and subscriptions they desired before COVID-19 hit our shores in comparison to women.

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Note: Our sampling of consumers that don't identify as male or female is rather small. As a result, we avoid drawing any broad conclusions regarding this segment of the population (grouped as "Other" in our analysis).