The COVID-10 coronavirus epidemic appears to be starting to have a widespread impact on the gaming and hardware industries.
There were stock shortages of the Valve Index VR headset following the announcement of Half-Life Alyx late last year. Since then, Valve had hoped to manufacture enough headsets to meet demand by Half-Life’s March 23rd release. However, Valve has now confirmed that manufacturing has been affected by the coronavirus, with fewer-than-expected Index headsets available in time for Half-Life Alyx’s launch.
“The global Coronavirus health crisis has impacted our production schedules so we will have far fewer units for sale during the coming months compared to the volumes we originally planned,” writes Valve. “Our entire team is working hard right now to maximize availability.”
In addition to this, both Facebook and Sony have pulled out of GDC (Game Developers Conference) 2020, which takes place from March 16-20, citing concerns over the coronavirus outbreak. Facebook has entirely pulled its booth and has advised all staff not to travel during GDC week. Sony has implemented similar restrictions and said “We look forward to participating in GDC in the future."
Keeping to Sony for a moment, the Japanese gaming giant has also pulled out of PAX East in Boston. PAX East runs from February 27 to March 1 and is one of the biggest gaming expos of Q1. Again, COVID-10 is cited by Sony as the reason for withdrawing from the four-day event as "We felt this was the safest option.” Confirmed coronavirus cases in the US number just 16, representing just 0.0000048% of the population, or one in every 20.45 million people. You could argue the case that the odds of being infected by coronavirus at PAX East (or GDC) is close to zero but Sony is taking a better safe than sorry approach here.
It’s probably the hardware manufacturing which is going to be hardest hit by the COVID-10 epidemic, however. China is an incredibly integral part of the supply chain; heavily involved in the manufacturing in just about all electronics goods you ever lay your hands on. Phone supplies are likely to be affected, while there is a looming storm cloud over the next-gen console launches. While neither Microsoft nor Sony have confirmed that supplies of the next-gen Xbox Series X or PlayStation 5 could be affected, the prevailing thought is that while coronavirus cases continue to escalate, so too are the ramifications found in hardware manufacturing. A delay to just a single component could cause a knock-on effect to the PS5 and XB Series X. In a worst-case scenario, this raises the possibility of the next-gen consoles being pushed back to 2021.
Chinese multinational tech company Lenovo has one of its largest manufacturing plants in Wuhan, China. The factory is currently on lock-down with Lenovo admitting there will be short-term constraints and delays in the supply chain.
In a similar manner to the Valve Index, Facebook has also said that supplies of its VR headsets, such as the Oculus Quest, are expected to be affected by the coronavirus. Facebook subsidiary Oculus said “we are working to restore availability as soon as possible.”
It’s difficult to say for now whether we’re into the worst of it or we’re just dealing with the tip of the iceberg in terms of this viral epidemic and its effect on the global hardware and videogames industries. It’s shone a light on the heavy reliance on China in particular, with the tech industry hitting a huge speed bump globally as quarantines take place.