The analyst predicts that due to the COVID-19 pandemic, the surge of new players meeting with the convenience to gift a videogame or a console instead of a family trip could lead PlayStation 5 and Xbox Series X|S with not enough units to meet the demand. Nintendo Switch is also a cheaper alternative and could be boosted by new games such as Mario Kart Live: Home Circuit.
Piscatella also points at the need for both, Xbox and PlayStation to ease the transition to next-gen consoles, as the supply of next-gen consoles might be scarce, a surge in sales of cross-platform titles could result in more legacy generation titles being sold than its next-gen versions.
“While there is always high uncertainty in a console transition year, 2020 has obvious additional factors at play that did not exist in prior periods,” Piscatella wrote “It would be difficult to overstate the impact that pandemic-driven changes in consumer behavior have had on the video game market.
“A surge in video game players and engagement through the spring and summer months depleted market inventory of existing hardware while fueling a corresponding surge in content and accessory spending. The impact of these changes is expected to continue throughout the remainder of the year.”
NDP analyst Mat Piscatella recently spoke on the Virtual Economy Podcast where he affirmed that the increased price of next-gen games will be embraced by most of the players.
“For some of these premium games, if the $10 increase was implemented, people would happily pay it. They might grumble about it, but they would certainly pay it. The price sensitivity, particularly on day-one, suggests that.”
Piscatella says that the 10 USD increase in AAA games is needed as the development cost of a next-gen game has significantly increased.
“Game prices have stayed the same since 2005, when Call of Duty 2 first went to $59.99 on Xbox 360 and we’ve basically stayed there ever since,” he added. “Now, a lot of people will say a rise in base prices for the higher tier, premium games is needed to off-set development costs, inflation or whatever, and all those arguments seem to fall flat.”