EMERYVILLE, Calif. — Huddled under blankets to brace against the cold, J.B. August and his buddies couldn’t help grinning as the doors of the boarded-up GameStop store finally opened.
The six men, strangers turned friends after camping outside on the sidewalk all night, let out whoops of excitement on Tuesday morning as they finally got inside to buy the boxy yet sleek new Xboxes.
“I’m just treating myself — it’s therapy,” said Mr. August, 35, before triumphantly carrying the device out of the store after 18 hours of waiting. “I never really have time to do anything for myself, so let me just go ahead and make an investment for myself and my peace of mind.”
The gaming craze on display in the Bay Area was echoed around the country this week as video gamers flocked to stores and crashed preorder websites in their rush to buy new video game consoles: Microsoft’s Xbox Series X and Sony’s PlayStation 5.
The release of the devices heralded the beginning of a new generation for video gamers, but in many ways was just an exclamation point on what has already been a huge year in the gaming industry.
With much of the world confined to homes throughout the coronavirus pandemic, many have sought out entertainment for the first time through games on various devices. Hard-core fans are logging more hours on their screens, too.
Gamers worldwide are expected to spend a record $175 billion on software alone in 2020, according to Newzoo, a gaming analytics firm, up from $146 billion a year ago. In the United States, gamers spent $33.7 billion across hardware, accessories and content through September, according to the NPD Group. And Piers Harding-Rolls, a research director at Ampere Analysis, an analytics firm in London, projected that Sony would sell 8.5 million PS5s and Microsoft would sell 6.5 million of the Xbox Series X and the smaller, cheaper Series S through March.
But some Wall Street investors wonder: Are the pandemic-fueled growth and soaring profits of the video game industry — which was already bigger, by sales, than the film and music industries — sustainable after the virus subsides and doors to the outside are flung open again?
When news broke Monday that a Pfizer vaccine candidate had been found to be encouragingly effective in fighting the coronavirus, video game stocks like Activision Blizzard, Electronic Arts and Take-Two Interactive fell along with quarantine mainstays like Zoom and Peloton.
“It’s a concern on the part of a lot of investors that once stay-at-home rules are eased, that these publishers will see less engagement with their games,” said Yung Kim, an entertainment technology analyst for Piper Sandler & Company. “It’s a matter of how people decide to spend their time.”
Interviews with two dozen gamers, livestreamers turned influencers, analysts and company executives, however, found that most in the industry are convinced this is not just a pandemic-related boom.
People who believe gaming newcomers will be loath to drop their devices when concert venues, movie theaters and sports arenas reopen point to what they see as an inherent “stickiness” to their products. Gamers build communities and grow accustomed to socializing with their friends and family over rounds of Fortnite or Among Us, the argument goes, and those bonds only strengthen over time.
“If you look at what teens are doing across America — actually across the globe right now — this is kind of their social currency,” said Jaci Hays, the chief operating officer of FaZe Clan, an e-sports conglomerate whose popular gamers can make six or seven figures a year. “We don’t see it slowing down.”
Nick Kolcheff, a FaZe Clan member who earns a living streaming Fortnite and Call of Duty to the 4.5 million people following his Nickmercs Twitch channel, said the gaming boom had caused an entire generation of children to idolize famous streamers just as they would professional athletes.
“There’s a real commitment, there’s a real addiction,” he said. “After those teeth sink in, it’s kind of hard to bob and weave and get out.”
Mr. Kolcheff declined to say how much money he makes from Twitch, but a recent study by the online lender CashNetUSA estimated that he earns more than $1.7 million annually from the platform.
Twitch itself has had a banner year and now draws nearly 27 million average daily visitors, up from 17.5 million toward the beginning of 2020. The site, which is owned by Amazon, has hired hundreds of people this year, and is seeing nongaming live streams like cooking, travel, music and fitness flourish as well, said its chief operating officer, Sara Clemens.
Ms. Clemens argued that the ecosystem Twitch had built could outlast the pandemic.
“When people have built bonds on Twitch, when communities have formed around creators, those are incredibly durable over time, and so we are optimistic that those will sustain,” she said.
There are reasons for hesitation, however, despite many industry leaders’ rosy forecasts.
Joost van Dreunen, a New York University professor who studies the business of video games, said that if gaming companies felt as optimistic about the industry’s future as they claimed, there would have been a slate of acquisitions and investments over the past several months.
“It’s strange to me that the industry, in this moment of incredible momentum, has failed or refused to use it as tinder to just light a fire,” he said. “Why hasn’t the top brass in the games industry taken more risk?”
Some companies have made moves, as when Microsoft spent $7.5 billion in September to buy ZeniMax Media and its host of game studios. But an overall dearth of acquisitions, Mr. van Dreunen said, provides an opportunity for companies like Google and Amazon to force their way into the market by buying studios themselves.
“If you’re not buying, then aren’t you inevitably also opening the door for these big tech companies to kind of sneak in?” he asked.
But there are other reasons to believe the gaming boom has legs. This week’s console releases, the latest skirmish in a decades-long war between Microsoft and Sony, will most likely juice interest and sales even further.
“These are the sort of ‘comet moments’ that happen every six or seven years, and people reinvest into the ecosystem,” said Jerret West, Xbox’s chief marketing officer. He added that Xbox’s investment in mobile gaming and its Netflix-style subscription game service called Game Pass set it up well for a post-pandemic world.
PlayStation, for its part, has a strong slate of exclusive games that Sony executives believe will keep consumers using its devices beyond the stay-at-home mandates. Other game industry executives have similar high hopes.
And future advances will keep gamers coming back, predicted Eric Lempel, PlayStation’s head of global marketing. “There will be new ways of gaming: We’ve seen in the past few years great innovation in the space, and I think we’ll see even more,” he said.