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TechVideo Games

The Game Industry Is Suffering from A Battle Royale ‘Hangover’

By
Lisa Marie Segarra
Lisa Marie Segarra
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By
Lisa Marie Segarra
Lisa Marie Segarra
Down Arrow Button Icon
November 20, 2019, 2:45 PM ET

As 2019 nearly comes to a close, the gaming industry this year has been, frankly, boring. Between the ground-breaking releases seen in 2018 and the next-generation consoles to come in 2020, it’s felt like we’re living in a forgotten middle-child period.

Fans have noticed and are pouring less money into the industry. Software sales, both physical and digital for PC and consoles, were down 37% last month, according to a report from NPD Group. But accessories took the hardest hit, down 41% in October year-over-year.

But experts say it’s not worth panicking over when you look at the market as a whole. when looking where the market is. The PlayStation 4 and Xbox One are at the end of their lifecycles, leaving many to hold out until shiny, new gadgets are released next year, and no game has captured attention like last year’s impressive slate of releases. But there’s also another reason for the lower numbers: a battle royale “hangover.”

2018 saw a battle royale frenzy, inciting sales of gotta-have-it consoles and accessories. Battle royale games place players on a map that they can explore and compete to take out other players before just one person is left standing. There’s a strong social factor: players can meet up on the map and talk, which is part of why the genre took off. The phenomenon was led by Fornite and PlayerUnknown’s Battleground, which were primarily thought of as console games, especially at launch (although both were playable on PC as well).

The console demographic was starting to age by 2018, catering more to millennials than Gen Z. But when school-age children kicked off the battle royale movement, it brought the console audience’s average age down quite a bit, according to NPD Group analyst Mat Piscatella. The games’ popularity skyrocketed as children took to them as social meeting grounds. Players didn’t just buy new consoles—they also needed headsets to chat with friends.

A year later, the gaming industry is nursing a battle royale “hangover,” as Piscatella put it. Even mobile platforms, which Fortnite and PUBG eventually expanded to, are no longer seeing growth in the battle royale genre, according to Randy Nelson of Sensor Tower.

The same audience that made Fortnite a cultural juggernaut is quick to move on. Piscatella says Minecraft, an old gaming favorite, is seeing an increase in engagement. However, Minecraft and Fortnite have very different monetization models. The free-to-play Fortnite took a page from mobile games’ playbook by making its money through in-game purchases like cosmetic upgrades or playing bonuses. But Minecraft, which was released well before the mobile gaming rise, is less focused on continuous spending and gets money from its upfront cost, contributing to this year’s decreased industry sales. Another factor is gear. After the boom in 2018, things like headsets don’t need to be repurchased.

“Things being down are only scary if you can’t figure out why or what happened,” Piscatella noted.

But much like real hangovers, there’s no miracle cure to be had here. Gaming subscriptions are rapidly growing, but Piscatella adds that they’re still in their infancy and haven’t yet made a significant impact on overall spending. It looks like consumers are fine with waiting until the next new thing comes along.

“It’s just a tough year,” Piscatella said. “There’s not much else to say about it other than Call of Duty: [Modern Warfare] is doing great, and NBA 2K[20] is doing great, but that’s about it.”

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—How giving thinkers and tinkerers room to experiment builds a better company
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.

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By Lisa Marie Segarra
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