Electronic Arts just had the best quarter in its entire 38-year history as people spend more money on games than ever. The developer behind Star Wars Jedi: Fallen Order and Madden NFL pulled in $1.39 billion during the past three months, up 87 percent from the same time a year ago.
Other developers including Activision Blizzard and Take-Two Interactive are expected to report similarly good news in their upcoming earnings reports.
Two trends are helping gaming — The coronavirus has, of course, been a big contributor to EA's recent success. People around the world are turning to video games in lieu of hitting the bar or otherwise going to hang out with friends. With conventional sports events postponed, e-sports competitions are picking up some of the slack on ESPN, where live tournaments of NBA 2K have aired.
At the same time it's becoming a lot cheaper to get into gaming thanks to Xbox Game Pass, a subscription service from Microsoft that offers access to hundreds of popular Xbox and PC titles for only $4.99 per month. Gamers can even stream full titles over the internet with xCloud, meaning bored people thinking about getting into it don't need to own a console first. Beyond that, free-to-play games like EA's Apex Legends encourage people to get addicted to a game and then regularly drop a couple dollars here and there on in-game purchases. During an economic recession, the low cost of entry here is an obvious plus.
Video games are the perfect escape — As the pandemic drags on, people are likely running out of other entertainment like books and TV shows to get through. The whole economic and health situation has been so depressing that it shouldn't be discounted that people are turning to games as an escape. Beautiful titles like Ghost of Tsushima can transport one to other worlds for a bit and get their mind off the current situation.
When pandemic restrictions ease up more this growth for EA and others will probably wane somewhat. But with Microsoft moving the Xbox to a more Netflix-like subscription model, it wouldn't be surprising to see many people who got into gaming during the lockdown stick around.