Pandemic boosts game console market; delays 8K TV adoptionTuesday, November 3rd, 2020
Covid-19 Pandemic: Boosts Game Console Market to Hit 40 million units, but Delays 8K TV adoption
OYSTER BAY, New York — The Covid-19 pandemic is having different impacts on the media device market. The pandemic boosted the game console market yet curbed flat-panel TV sales. The arrival of next-generation consoles combined with gaming entertainment demand driven by the pandemic will contribute to game console market growth in 2020. Global tech market advisory firm, ABI Research, forecasts that 40 million game console units will ship in 2020, a 6% increase from 2019.
Total game console unit shipments declined in 2019 as gamers waited for the launch of next-generation consoles by Sony and Microsoft in the holiday season of 2020. The Covid-19 pandemic in early 2020 has boosted the gaming market overall. With millions of consumers forced to stay at home in the first few months, game downloads and the number of active gaming users significantly increased. The demand for game consoles also increased in 1Q 2020, but supply chain disruption resulted in lower unit shipments. As operations resumed nearly back to normal in the second quarter, game console makers reported higher unit shipments in the second quarter.
“In addition to increasing demand in gaming, long-awaited next-generation consoles are targeting launch in November 2020, which will further drive the game console market. Although governments are reopening economies, still imposed travel restrictions can impact logistics. Game console makers need to prepare for efficient production, content creation, and distribution plans to avoid supply chain shortages, especially during the holiday season when sales will peak,” notes Khin Sandi Lynn, Industry Analyst at ABI Research.
While the pandemic boosted the game console market, it challenged the flat-panel TV market. The worldwide flat-panel TV market is sluggish due to economic uncertainties, and the 8K TV market will remain low in 2020. “There had been much anticipation of 8K TV market growth given the 8K broadcast content scheduled for Summer 2020 Olympics. However, 2020 Olympics’ postponement combined with the overall economic downturn has resulted in low 8K TV unit shipments in 2020.
Despite the challenges, flat-panel TV makers continue to promote 8K TV sets. High-end TV makers such as Samsung and LG are targeting to increase sales of 8K TV units to generate higher revenues and profit margins. TCL announced 8K TV sets at CES 2020. Since consumers are struggling with the pandemic’s economic challenges, priorities on purchasing media devices have changed. Highly competitive pricing is essential to boost sales, as seen with Samsung’s promotional prices for its 8K TV sets to boost sales volumes.
“Although 8K TV set price points have declined from a year ago, the cost of most 8K TV sets is still relatively high ranging from $3,500 to $30,000. High cost and lack of content will delay 8K TV set adoptions. ABI Research estimates only around 1% of worldwide flat panel TV shipments will be 8K TV sets in 2021,” Lynn concludes.
These findings are from ABI Research’s Media Devices Market Update 2020. This report is part of the company’s Video and Cloud research service, which includes research, data, and ABI Insights. Depicted in a PowerPoint format, the Market Update provides a snapshot into current and future market opportunities and threats for a specific technology as well as focusing on a selected key market and associated trends.
Links: ABI Research