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Video gaming growth soars thanks to pandemic

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Video game usage in the U.S. has skyrocketed during the pandemic, leading to record revenues and profits for gaming companies like Nintendo, Epic Games and Electronic Arts.

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Why it matters: The pandemic has sped the rise of video gaming as a core consumer pastime, and the trend is unlikely to reverse even after life returns to normal. "What we're seeing is an acceleration of pre-existing trends," NPD Group gaming analyst Mat Piscatella told Axios. "It's like we jumped ahead two years."

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Driving the news: Gaming companies are blowing past analyst earnings estimates and are attracting huge investment interest thanks to the stay-at-home lockdowns that have driven major increases in gaming.

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Nintendo reported a whopping 428% increase in profits last quarter, driven largely by monster sales of its Nintendo Switch hardware product and its hit game "Animal Crossing." The Japanese company made $1.37 billion in profit for the second quarter, smashing analyst estimates.

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Electronic Arts also blew away analyst estimates for earnings, with earnings per share some 66% higher than Wall Street anticipated. The company has surpassed analyst estimates on profit for the past four quarters.

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Epic Games, the maker of the hit game Fortnite, said Thursday it raised $1.78 billion at a post-money valuation of $17.3 billion. The funding round includes a $250 million investment from Sony that was announced in July.

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Between the lines: Gaming has become both a key solo hobby for millions of people stuck at home and a social lifeline, letting people connect and compete with friends while remaining socially distant.



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