The Future of Virtual Gaming One Year Later After Covid
The Ugly, the Bad, and the Good
2020 has been a wild ride to say the least. This was a year of limited mobility, uncertain employment, and unprecedented fatalities that left no one unaffected by Covid’s nasty reign of terror. Yet, for all the havoc the pandemic brought, one economic trend stands out. Industries saw a huge shift of infrastructure that perhaps was not needed but in the long run will prove beneficial, if not revolutionary. Additionally, on an individual level, people have changed their associations with their work, life, balance priorities, and how and what they spend their free time on. These two shifts specifically helped usher in a new era of the board game, gaming, and general digital industries. Changes in how we work, communicate, and connect have been forever altered and, as a result, this part of the gaming industry saw an expedited shift to the digital world. So, where does this leave us moving forward? Will these trends continue? How much of our previous world will return as the planet vaccinates its way back to normalcy? This article will take a look at the pandemic, its effect on our industry, and the future to answer these questions.
A Multi-Impact Year
Though there were some positive byproducts (especially in the gaming industry), the pandemic was first and foremost devastating. There weren’t any industries left unaffected. According to Polygon, the areas hit hardest by the pandemic were independent retailers, as nearly 20% are on the precipice of closing or have already closed. Large, in-person conventions have been similarly impacted. Even those industries that came out better and more profitable had to fight through and rise above the chaos and terror that quite literally plagued the world. More generally, according to the U.S. Bureau of Statistics, US unemployment peaked at 14.7%, the largest jump since they began collecting data. And Global Finance Magazine shows just how devastating these rates year over year have been globally. Moreover, even those that did keep their jobs experienced a massive shift to working remotely. Down from April’s 70% peak, 56% of Americans are still working from home according to a February 2021 US News Report poll. And it is beginning to look like this trend is here to stay. According to PWC, 56% of their 133 executives and 1,200 office workers in November and December 2020 will be moving to increase remote working permanently. At 32% of those surveyed, the largest subset said they will be switching to a hybrid model after seeing no impactful productivity losses during the work from home model during Covid. PWC does a great deep dive into how the remote work culture shift is here to stay. Check it out below:
Let’s Talk About Gaming
The board game industry was not immune to the negative effects of Covid. In fact, out of the 45 Tabletop Simulator-based designers and publishers surveyed, approximately 89% said Covid had a tangible impact on their business. Of that group affected, 75% of them reported Covid having some explicitly negative influence on their companies. The largest issues reported were the sudden cutoff from a community of gamers, the difficulties conducting playtests, supply-chain issues, and the inability to meet in large conventions. Indie game developers were hit especially hard. Guise Gaming, the developer behind A Battle of Onin recalls that, “Covid has had a huge impact on the gaming industry in general. Where we would normally be able to have people over to play our game with us and give us feedback on their experience, we couldn't once the pandemic became a great concern. A lot of gaming conventions we were planning on attending were canceled due to the pandemic as well.” This experience seems to be indicative of what the tabletop gaming market went through. Despite the fact that the industry possessed virtual alternatives, at the dawn of 2020, board gaming was still an in-person market.
Some Good With the Bad
While the majority of those we talked to experienced some negative effects of Covid, it’s important to point out that 40% also found that Covid helped their business in the long run. This is both a tribute to the resilience of the board gaming industry and the adaptability of virtual replacements, especially Tabletop Simulator. A number of TTS-based devs recall that the forced shift to digital, though painful, proved to be not only a fit alternative, but actually a superior development tool. Ed Rodriguez, the indie developer behind Animus: The Draft Building Card Game recalls, “[Covid] creates lots of challenges, but it has also helped to streamline the development process by allowing me to go fully digital which has sped up the entire playtest process.” In addition to being faster, many TTS-based devs praised the platform as both a cheaper and more convenient alternative. Yet beyond Tabletop Simulator’s role as a game development alternative, is its potential to help stitch up a broken world. Many of the devs we talked to recalled TTS being integral to staying connected to their development partners, their friends, and their families during this horrific pandemic. Some, such as Jacob Blake, the developer behind Kingdoms, even used this TTS’s virtual alternative to fill their time on furlough and discover a passion for board game design!
As touched on before, the large roadblocks that Covid threw up didn’t stop the small game sector from surviving and thriving. In fact, this year proved to be an unprecedented opportunity for the junction of video and tabletop games to rapidly expand. The proof of this goes beyond the experiences of individual developers. For example, take ICO Partners’s fantastic deep dive on kickstarters in 2020. 2020 was Kickstarter’s most successful year ever, raising an astonishing $730 million. The gaming category saw the largest growth with video games seeing the biggest increase in funding since 2015. But tabletop games, in particular, carried the trend, making up almost a third of all money raised with a 33% year-over-year increase. This growth was shaped by the unique conditions of the pandemic. For example, out of the entire gaming industry, digital sales accounted for 91% of all revenue, up from 79% the previous year. This junction of the growing video game and an explosive indie tabletop game market made a platform like Tabletop Simulator an essential tool for small designers to gain exposure, conduct playtests, and carry out prototyping. Taking advantage of this junction both boosted games exposure and facilitated game development/launches during circumstances that otherwise have made this impossible. In fact, 91% of the people we asked stated that Tabletop Simulator played a crucial role in rolling out their games during the pandemic.
A Permanent Change
So what does this say about the future? Despite record-breaking funding indicating a quickly growing small-game market, the number of actual projects themselves did not see a large increase. And while we are unlikely to see demand like this in a post-pandemic world. It seems like this new interest in gaming and virtual gaming is here to stay. We see this prediction echoed in the more general gaming market. New Zoo’s 2021 trends to watch, points out the “stickiness” of the PC platform in particular. Moreover, board gaming industry giants like Hasbro recorded a 27% increase in revenue in their gaming category for their last quarter, despite the reduction of restrictions during this time period.
When thinking about board games in particular, the data becomes a little less straightforward. But, based on reports from Arizton Advisory & Intelligence, Technavio, and ICO Partners, there are a few things that industry experts can all agree on: Covid- 19 brought massive sales growth in 2020, the board game industry is becoming more fragmented and smaller board game designers and taking over more of the market, and online sales platforms are imperative moving forward. For a little specific data, look to Technavio’s predicted year-over-year increase of about 25%, bolstered by Hasbro’s public earnings seeing a 15% gaming increase in 2020 and Kickstarter reporting a 33% increase in Tabletop Game funding. Generally speaking, the most recent report from Arizton Advisory & Intelligence also provides useful data that can be used for comparison and forecasting purposes. According to their study, the board game industry as a whole is growing at a 13% CAGR. The Tabletop Game Market specifically has a slightly higher 14% CAGR. The report predicts a $30 billion USD market by 2026 with an incremental growth at around $5 billion USD in 2026. Comparing this to New Zoo’s reports of a 9.4% CAGR over the next three years and a predicted $217.9 billion USD market by 2023, it doesn’t look like this new interest in virtual tabletop gaming is going anywhere.
*Steam data based on sales, other data based on revenue increases Hasbro, Kickstarter, Technavio, Steam, New Zoo
This “stickiness” can be attributed to the larger number of people branching out into new hobby areas. This represents exposure to previously untapped markets. People who picked up new hobbies will not drop all of them in a non-Covid world. The social and intellectual variety found in gaming proved to be the escape from reality that so many needed this year. And the massive jumps in Kickstarter funding, game sales, and overall participation have turned on a general interest that is not so easily turned off. A market that people, in other circumstances would not have dipped their toe into, received an influx of new consumers. And, while not every buyer will be a repeat customer, the gaming industry gained a lot of momentum that is not soon to drop off. The “stickiness” of our brave new virtual world even impacts game developers. This can be perfectly summed up by Cloudfall Studios, designers of Captains Gambit, who said, “Even if Covid suddenly disappeared tomorrow, we’d still consider Tabletop Simulator absolutely necessary…”
Looking to the Future
So how do games take this momentum and move it forward as the world levels back out? It’s essential to remember that new consumers will now have the baseline interest to enter previously uncharted territory. We see this reflected in a New Zoo report that forecasts the gaming industry to have a CAGR of + 9.4%, where the market will reach $217.9 billion by 2023. For context, pre-pandemic, New Zoo had forecast a 2023 market size of $200.8 billion. Even more indicative of this direction moving forward, Gamesindustry.biz showed that downloaded PC games now have a year-over-year rate of + 7.9 %. Looking at the board game market, Technavio reports an incremental growth of 5.81 USD through 2026. While this is no direct comparison, from these research companies we can glean a sense of how much Covid has boosted interest in the board game market by comparing the 5-year market sizing forecast from the Grand View Research Inc published in 2018 and then the predicted 39% increase in market size done two years later by the Arizton Advisory & Intelligence Group published in 2020. While these are 2 distinct sources and the increase in percentage is unlikely to be that large, the huge jump in a post-Covid market forecasting is relevant and clear.
The digitalization of tabletop games has effects and benefits that will undoubtedly outlast the pandemic. As many of our own devs pointed out, their playtesting costs actually were reduced by going online. In addition to the general growth of the gaming and board games industry providing a much broader and more eager consumer base, the introduction of virtual tabletop games as part of the playtesting roadmap allows for access to a massive audience. And one that you know is invested and interested in gaming. This is best summed up by Paverson Studios, the creators of Distilled, who said that TTS, “helped the game to get in front of hundreds of people, as opposed to just dozens.” A shift to virtual platforms has also created higher quality feedback and the ability to disseminate a creation to a more diverse audience. This is particularly helpful for possible international expansions, figuring out demographics for marketing and advertising, and raising overall awareness and hype for a game launch. A report from Arizton Advisory & Intelligence makes the important observation that the board game industry as a whole is changing from a highly concentrated model, dominated by large names, to an increasingly fragmented one with the rise of popularity in small game publishers and designers. With that in mind, getting involved in the Tabletop Simulator Community is undoubtedly advantageous for designers and publishers of smaller games. Moreover, the new TTS blog gives a space for reviews & write-ups for games and is open to collaborations through social media with giveaways, sales, and event promotions. In all, now is the perfect time to get involved with Tabletop Simulator!
Video Game Industry Data by New Zoo, Board Game Industry Data by Arizton Advisory & Intelligence
If you have any stories about how the Covid Pandemic has impacted your game design process or thoughts on the future of virtual gaming be sure to comment below!