- Sony and Microsoft's rollouts of their highly sought new gaming consoles helped to drive an 80% surge in advertising spending to a yearly high for the video game industry. During the first two weeks of November, the industry spent more than $45 million on print, TV and digital ads, per data that researcher MediaRadar shared with Marketing Dive.
- Sony spent more than $15 million to promote the PlayStation 5 in the month leading up to launch, more than triple what Microsoft spent on ads for the Xbox Series X|S. Nintendo, which isn't releasing a new console during the holidays, nevertheless boosted its advertising by 138% for Nov. 2-15 from the prior two-week period.
- Video game publishers promoted new games like Call of Duty: Cold War and Assassin's Creed Valhalla with a 76% yearly jump in ad spending during the first two weeks of November. Retailers that sell video games and consoles increased their ad spending by 28% for the comparable period. Mobile games also ramped up ad spending for the first time since early April with a 26% yearly gain during the week of Nov. 9, according to MediaRadar.
Sony and Microsoft's introduction of their first new gaming consoles in seven years has become an occasion for the entire video game industry to participate in a massive upgrade cycle. Not only have Sony and Microsoft increased their ad spending, but Nintendo has ramped up its media presence to capture part of the demand for consoles. Sony and Microsoft have been unable to keep up with demand because the coronavirus pandemic disrupted the supply chain for electronic components, leading to widespread shortages of their much-coveted devices.
The interest in the new consoles is having a halo effect on app-based mobile games, which experienced a 23% increase in ad spend for the week of Nov. 9 compared with a year earlier. Prior to the sales bump, the category had experienced sluggish sales during the pandemic, likely a result of the fact that consumers are commuting less and staying home more, per MediaRadar.
Amid the disruptions, Sony didn't sell the PlayStation 5 in stores and instead let customers preorder through the websites of select retailers. Walmart last month gave customers a chance to order the console in staggered supply drops that crashed its website on at least two occasions amid the buying frenzy, CNet reported. Meanwhile, Microsoft estimated that shortages of the Xbox Series X will last until April, which may lead some frustrated consumers to consider other platforms. Nintendo has seen sales of its Switch console double in the past year despite constraints on supply as consumers sought home-based entertainment during the pandemic. The popularity of the Nintendo Switch helped to drive demand for breakout titles like the social simulation game Animal Crossing: New Horizons, which has provided a marketing platform for brands seeking to reach gamers.
With people spending more time at home during the pandemic, video gaming has surged in popularity. U.S. consumer spending on video gaming rose 24% to $11.2 billion in the third quarter from a year earlier, with sales of gaming content hitting $10 billion, according to researcher NPD Group. The company forecast that the holiday season would bring a record-breaking quarter as Sony and Microsoft introduced their latest consoles. The increased marketing activity for the companies indicates that the rivals want to stand out even as supply disruptions prevent consumers from buying their next-generation consoles.