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Video Games Power Up During Pandemic

Lockdowns and next-generation consoles are supercharging growth.

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Video games have been around for over 50 years, and despite its age, the industry continues to not only grow but also evolve. During 2020, the pandemic and associated stay-at-home regulations provided a tailwind to the secular trends underpinning the growth of video games as well as some potential evolutionary shifts. The secular trends include the switch to digital downloads and microtransaction growth, with more evolutionary changes including subscription plans and cloud gaming. The fourth quarter also saw the launch of the ninth console generation with the debuts of the Sony (SNE) PlayStation 5 and Microsoft (MSFT) Xbox Series S and X.

We examined these trends and the console launches in a previous article. Given the number of changes since then, we now take a look at those trends in light of pandemic-fueled acceleration and the potential impacts on the four major publishers we cover: Activision Blizzard (ATVI), Take-Two (TTWO), Electronic Arts (EA), and Ubisoft (UBI).

Neil Macker does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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