Globally, the demand for entertainment and gaming-based gift cards has been increasing at a substantial rate. This is primarily due to the increasing smartphone penetration and the rising popularity of over-the-top (OTT) media or internet streaming services. It is noteworthy to mention that, the ongoing lockdown across the world due to novel coronavirus pandemic is creating more leisure time for individuals. This is resulting in increasing demand for online games and other recreational options such as video-on-demand (VOD) services.
Gift card issuers in this sector are putting extra effort to introduce more entertainment and gaming-based gift cards to capitalize on the trend. It is expected that the change in consumers’ way of life due to COVID-19, will last longer and the demand for entertainment and gaming-based gift cards post corona period will also remain high.
Increasing demand for home entertainment will drive the market growth
Despite the global economic slowdown due to coronavirus pandemic, entertainment and gaming gift cards are gaining market share across the world. The ongoing lockdown is forcing individuals to stay at home to avoid getting affected by this virus. The usual travel time of students and office goers has reduced considerably.
As the restriction on outdoor recreational activities is getting stricter day by day to control the spread of the virus, individuals are spending more time on indoor entertainment options such as online gaming or watching popular programs on TV. Notably, widespread of social distancing is also forcing film studios to release their titles onto streaming services. Netflix, one of the leading internet streaming service providers in the world recorded substantial growth in the number of subscribers. Globally, the company added 15.8 million paid subscribers between January and March 2020, and the largest expansion recorded in Europe with 4.4 million subscribers.
Similarly, the demand for online gaming is also rising. For instance, in India, online gaming apps such as Ludo King claimed that during the ongoing lockdown, the number of active users of the company increased from 15 million to 50 million in the country. Therefore, the rising demand for these online home entertainment platforms is creating a large opportunity for entertainment and gaming-based gift cards as a tool to attract more consumers.
Market and product expansion will support the market growth
The rising demand for online streaming services and gaming is creating growth opportunities for gift card companies. Entertainment companies are expanding their geographical reach to meet the rising demand. For instance, in October 2019, Netflix launched the Netflix Gift Card in the UAE and Saudi Arabia to attract more consumers. The gift card is available in both digital and physical formats across leading retailers. Moreover, extended lockdown in many countries due to COVID-19 is also encouraging companies to focus on launching gift cards.
Twitch, a live streaming platform, and a subsidiary of Amazon introduced gift cards on May 12, 2020. Presently, the new gift card is available in digital format however, the company mentioned it will launch physical gift cards after the restrictions on lockdown will ease. Similarly, in February 2020, InComm, a leading payments technology company, partnered with Roblox, an online gaming platform to launch gift cards in France and Germany.
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