Since the outbreak of the new coronavirus, now officially labeled as COVID-19, millions of Chinese have been confined in their homes. The Lunar New Year holiday that was supposed to end on January 30 was extended to February 2 across the country.
Many companies have since recommended that their employees carry out their work from home. Working from home is unquestionably not the same as working at office; one gets distracted by home tasks, children's care, naughty neighbors, a lack of work-oriented environment… and video games. All may decrease work efficiency.
During the crisis, most Chinese found themselves trapped at home with no easy way to enjoy themselves. Boredom may cause frustration and stress. Hence, nothing seemed better than going online and with one click downloading 'a mobile game' to alleviate the tediousness.
With the coronavirus disruption, online gaming is likely to have a short boom period. Internet giants Tencent (0700: HK) and NetEase (NTES: Nasdaq), China's largest online gaming providers, seem to be the main winners in China’s mainland. While Tencent is trading at 26 times 2020 expected earnings, NetEase is at 18 times, according to American magazine Barron's.
Tencent's Honor of Kings (王者荣耀), well-known online game among Chinese people, which typically has around 60 million to 70 million DAUs (active daily users), surged. It seemed likely to be the top beneficiary of online gaming mini-boom, with over 100 million DAUs during the Chinese New Year holiday, according to Nomura analyst Jialong Shi.
Besides, China-based Security firm Sinolink Securities (国金证券), estimates showed that Honor of Kings would reach around between 120 million to 150 million DAUs during the holiday season.
The severity of the coronavirus epidemic was not enough to prevent some 'black humor' – and a controversial moment in the online gaming industry. For instance, the simulation video game Plague Inc. which was developed by UK-based games studio Ndemic Creations, became the top paid game in China's Apple Store in January. The main objective of the game is to create a plague able to infect everyone and bring the end of humanity.
The popularity of the game over the coronavirus outbreak led the company to issue an official statement to remember users that Plague Inc. is just a game and not a scientific tool.
Please remember that Plague Inc. is a game, not a scientific model and that the current coronavirus outbreak is a very real situation which is impacting a huge number of people. We would always recommend that players get their information directly from local and global health authorities," states Ndemic Creations on their official website.
Nevertheless, the number of Steam users hit a record on February 9; according to Steam statistics, the number of users exceeded 19 million. The rapid increase of Steam users is related to the virus outbreak, which has isolated hundreds of millions of Chinese at their homes. But online gaming services providers should be aware that China is also a country with strict censorship – any online game that may disrupt or put in cause the government plan to eradicate the virus could be punished by internet censorship policies.
With no vaccine or cure to put an end of COVID-19 and a death toll that’s still rising, all the industries in China are going online to maintain their businesses, and the online gaming industry is likely to be one of the greatest beneficiaries during this trend.