Why November And December Are Critical For Video Game Sales

November and December are by far the biggest months for video games sales, but this holiday season could be particularly big. There are at least two reasons why video games could be flying off the shelves at a record pace this Black Friday and Cyber Monday.

First, video game sales have gotten a big boost all year due to social distancing during the pandemic. More Americans are spending time at home, and those numbers could ramp up during the winter season as coronavirus cases reach new highs.

Second, Microsoft Corporation MSFT and Sony Corp SNE just released their next-generation PlayStation and Xbox consoles. Analysts are expecting the new consoles to be popular holiday gifts this year, and those console buyers and gift recipients will be looking for new games to play.

Related Link: 16 Black Friday And Cyber Monday Stocks You Can't Miss

Upgrading Game Publishers: In fact, conditions are so good for video games sales this year that CFRA analyst John Freeman recently upgraded video game publisher stocks Activision Blizzard, Inc. ATVI, TAKE-TWO INTERACTIVE SOFTWARE, INC TTWO and Electronic Arts Inc. EA to Strong Buy ratings.

“Our Strong Buy is based on the imminent launch of new, thoroughly revamped Xbox2 and PS5 consoles shipping in November and the accelerating adoption of VR as headset prices continue to fall,” the analyst said earlier this month.

While this year may be a particularly strong holiday season for video game sales, November and December have historically been by far the best months of the year for game sales.

In the last five years, U.S. monthly video game sales have only surpassed $1.7 billion 10 times, and each of those 10 instances occurred in the months of November and December.

Benzinga’s Take: In addition to game sales spiking due to the new consoles, gamers will likely be eagerly anticipating upcoming game releases that will take advantage of the ray-tracing capabilities of the new consoles and should feature significant graphics upgrades, said CFRA's Freeman.

Due to the perfect storm of new consoles and social distancing, investors should expect November and December 2020 game sales to far surpass the numbers put up in recent years.

The PlayStation 5. Courtesy photo.