Video games have been a holiday gift staple for anyone who play casually to those who play competitively, or even compete in eSports. Now with the pandemic allowing more time for video games, U.S. spending on video games is projected to reach $13.4 billion during the holiday season, which is a dramatic 24% bump from 2019. This is thanks to the gear that comes along with long-term playing. New consoles and hardware, gamepads, headsets, gaming chairs, downloadable content and subscriptions all accompany the price tag on games themselves.
However, this is just a projection. According to NPD Group, projections in transition years always have a higher risk of error. It's no secret that the pandemic changed purchasing behavior in consumers, and the gaming niche is no exception. Streaming services and console creators have seen a surge in video game player engagement, to the point where it depleted the market's existing hardware. Digital downloads for games were at a high as more and more gamers used their at-home time to showcase their gaming skills. And the pandemic isn't over yet, which leads many to think that this trend will continue through the end of the year.
The U.S. alone has 30 million more video game players than in 2018, topping out at over 244 million total. On top of that, players are averaging 14 hours per week, instead of 12 hours like in 2018. With an uptick of gamers and other holiday gifts like travel, theme park tickets, and sports game tickets out of the question this year, average consumer spending on video games could exceed $50 billion by the end of the year. Games and accessories are a huge part of that spending, but this year's big ticket items will be the driving force behind it.
Playstation 5 (NYSE: SNE) and Xbox Series X (NASDAQ: MSFT) are being released just in time for the holidays this year, and already the consoles will be tough to find, even leading into 2021. However the Nintendo Switch (OTC: NTDOY) is more likely to be the best-selling console of 2020, with its mobility built in and accessibility to both big gamers and casual players. And while the Switch was hard to find during the beginning of the pandemic, now their production is up to speed, giving them an edge over Playstation and Xbox to meet the demand of buyers.
Other than consoles, gamepad and headset spending is expected to break holiday records, subscription spending is expected to surge as more consoles are bought, and headliner game Call of Duty: Black Ops Cold War is expected to be the most popular game of the season. New consoles, more gamers, and a constant stream of new games is a fantastic mix for the gaming industry.