10 March 2020 | 12 Comments
A worldwide pandemic is happening, and it’s having a huge impact even in its early stages. The coronavirus started spreading in late January, and there are already over 100,000 confirmed cases worldwide.
I think there’s much to learn about the full impact of this pandemic in the coming months, and most importantly, my heart goes out to anyone who has been personally affected or inflicted. This is a human-level tragedy.
Beyond the contagion, though, the coronavirus is having an unprecedented economic impact. Today I’d like to share my thoughts on where we might be headed, both so we can prepare for the worst and hope for the best.
Manufacturing and Product Industries
In the game industry, manufacturing is largely synonymous with China. While there are other options worldwide, many of them still turn to China for specific components that simply aren’t made at scale anywhere else.
The threat of coronavirus was realized during the Chinese New Year, when millions of factory workers across China had returned home. So even though manufacturing outside of the Wuhan province has resumed, there are still quite a few people quarantined in Wuhan, unable to return to their jobs.
In the long-term, this is probably a very good thing, especially on a human level. I’m sure it’s terrible to be locked down in Wuhan right now, but it should significantly reduce the spread of the disease.
In the short term, this means that many factories may be short-staffed and thus slower than usual. If you’re a Kickstarter creator, you’re probably adjusting your production schedule and informing your backers.
As a whole, I think we’ll simply see fewer products made in 2020. Not fewer types of products, but fewer units overall. If supply goes down and demand remains the same, it’s likely you’ll see prices go up (whether companies charge more or people are willing to pay more due to scarcity). I also think we’ll see an increase in delivery services, at least in the short term.
Service and Entertainment Industries
My theory is that the coronavirus will have (and is already having) the biggest impact on service and entertainment industries; specifically, those where people gather in a confined space. This includes sporting events, conventions/festivals, airports/travel/tourism, theaters, gyms, movie/film production, game stores, churches, event spaces (like wedding venues), schools, retailers, and restaurants.
That’s huge. In the news, you might hear about how those industries impact the bottom line for billion-dollar companies. More importantly, in my opinion, are the people who actually make those companies function on a day-to-day basis. It’s possible that many of them will lose their jobs, or if they’re hourly, they may just have a lot less work for a while.
This is going to be very rough on the blue-collar workers in service and entertainment industries, and it means that millions of people will focus their budgets on essentials. Board games, as integral as they are to the social lives of me and many others, are not essentials. You can survive without them (especially if you already have a collection to play).
Over the last few weeks, stock markets across the world have plunged. People are justifiably scared about the widespread economic impact of the coronavirus, so they’re selling instead of holding or buying.
I’m not an economist, so I really can’t say much about what a downturn in the stock market means for most people. It’s often an economic indicator, but a plunging stock market doesn’t cause the economy to tank.
I can say this, though: If you’ve invested in stocks (mutual funds, IRA, 401k, etc), even though it feels like you’re losing money right now, you only lose if you sell (and if you sell for a lower price than what you bought). So if you don’t need the money in your investments for the foreseeable future (the next year or so), don’t do anything. Just ride it out.
There are so many different types of creators and entrepreneurs that I can’t begin to understand the impact the coronavirus will have on everyone. So I’d love to hear from you: Personally and professionally, how is this pandemic impacting you?
For me, I’ve certainly been much more careful about washing my hands after going to a restaurant, grocery store, or climbing gym. I haven’t made any changes to my travel or convention plans, though I’m open to doing so if the need arises.
For Stonemaier Games, I’m proceeding with caution. I don’t know what peoples’ budgets are going to look like in 6-8 months, and that’s our production cycle. We’re proceeding with a big Wingspan reprint because distributors have committed to it, but after that, our next big reprint of any product will probably be for the holidays.
What’s your perspective on the economic impact of the coronavirus?
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