The data has been extracted from a sample of 239 studies, approximately 5% of the almost 5,000 teams in Europe.
The advance of COVID-19 has had a huge impact on the health and economy of the countries affected by the coronavirus. In this context, the European Game Developers Federation (EGDF) has published a survey carried out at the end of March 2020 by which they analyze the situation that European studies are living with the disease. The agency, which has surveyed 239 studies (5%, it is estimated that there are some 5,000 companies dedicated to video game development), has shown the companies' fear of economic bankruptcy.
The Reviews of this data is carried out by Jari-Pekka Kaleva, a member of the federation, which highlights that small companies and startups are the most susceptible to falling into the abyss. About 17% of the studies stated that they might be forced to close in the next three months. Of this percentage, a majority corresponds to companies that have less than 10 employees.
As Kaleva points out, the pandemic seems to be affecting more small studies trying to find funding to produce their video games. In the best case, a startup has capital for six months or a whole year. "Now that trade events and fairs have been canceled, companies are running out of time and money to close their investments, publishing deals, outsourcing, and other partnership negotiations." Furthermore, many investors have frozen their activities due to the crisis. Not everything is black: 20% of the largest studios are looking for talent and means to outsource the development process of their products.
EGDF infographic
Delays will harm medium and large studios
It is obvious that companies with more economic resources have more general stability. All in all, around 28% of companies that employ between 50 or 249 people have indicated that they will have trouble surviving in the next six months. These companies face delays caused by circumstances, which have forced telecommuting. If the restrictions continue beyond the summer, studios will have difficulty recruiting foreign professionals, which could lead to additional delays.
About 13% of studies have stated that their business has been doing better since the arrival of the COVID-19 epidemic. Approximately 27% of mobile developers and 18% of PC title creators have determined that their business works better. However, only 6% of companies working for both PCs and consoles report that they have benefited from the circumstances.
Despite some reports suggesting that video game download has increased, as confinement has reactivated interest in entertainment, the PC and console market face additional major challenges. 53% of the studies that develop these systems highlight that their business is doing worse than usual. "The negative effect of the epidemic has been less in those who developed exclusive to PC (41%) and considerably lower in the case of studies dedicated to mobile phones (27%).
Territorial differences
Jari-Pekka Kaleva stresses that one of the surprise of the EGDF survey is that developers in southern and western Europe are much more pessimistic about the future. Of course, this is because the epidemic has affected those countries the most. The lack of public support in countries like Spain and Portugal had already put many studies in check before the advent of COVID-19.
The most stable studios are in Northern Europe. In Denmark, 60% of the respondents believe that they will be able to survive for more than a year, while in Finland (54%), Bulgaria (57%), Romania (56%) the rates for running a business are lower than in other parts of Europe. Also, in areas where large studios provide long-lasting subcontracts. Only 11.4% of developers in Eastern Europe and 12.5% of studies in the Nordic countries indicate that they may have to close in three months. In western and southern European countries, that figure increases to 19% and 24%, respectively.
