The Top 10 Public Game Companies Generated $126 Billion in 2021 as Subscriptions and M&A Shake up the Market
We recently published an article showcasing our new global games revenue and audience numbers, providing a high-level overview of the games market. Now it’s time to look at the 10 biggest companies powering the games market.
The top 10 public companies by game revenues generated a combined $126 billion last year, a year-on-year growth of +10.2%.
While these companies contributed most to the games market’s 2021 revenues of $192.7 billion, top 10 also grew the slowest of all the public companies we cover.
The top 11–25 companies are beginning to capture a bigger share of the global games market pie, while those ranked 26 and below saw even faster growth than the top 25. Therefore, it is unsurprising that the biggest game companies are eyeing M&A for growth (more on that later).
The rest of this article will zoom in on the top 10 gaming companies’ revenues and growth, based on content and data from our most recent Global Games Market Report update. We’ll also look at what 2021’s top 10 would look like had the market’s biggest acquisitions already closed.
Tencent Remains the #1 Games Company by Revenues by a Huge Margin
Tencent’s game revenues grew +9.9% year on year to $32.2 billion in 2021. The Chinese tech giant’s gaming growth was again driven by its key live-service franchises.
Most of Tencent’s growth came from international games, which will likely continue to be the case into 2022 with the opening of a new Western publishing division, Level Infinite, in late Q4.
- At home in China, mobile MOBA Honor of Kings — one of the world’s biggest games by engagement and revenues — drove revenue growth.
- On the international front, a new Clash Royale update saw impressive engagement and revenue jumps for the title.
- League of Legends also benefitted from cross-promotion via the Netflix show Arcane, which is based on the game’s characters and lore. The show’s success makes it a strong test case for the growing transmedia trend. Learn more about that in our 2022 gaming trends article here.
Console: Xbox Game Pass Gives Microsoft Healthy Growth as the Other Platform Holders Face Challenges
Sony (#2) and Nintendo (#8) suffered the most from the pandemic-caused delays on console.
Console’s hit-driven nature means PlayStation and Nintendo struggled to live up to the highs of 2020, which included:
- The release of the PlayStation 5 and accompanying first-party software like Spider-Man Miles Morales.
- Highly anticipated first-party software on older hardware, like The Last of Us: Part II and Ghost of Tsushima for PlayStation, and the cultural zeitgeist that was Animal Crossing: New Horizons for Nintendo.
- A general boost in consumer interest and spending on consoles, resulting from 2020’s pandemic-related stay-at-home orders.
However, Microsoft (#4) enjoyed healthy growth (+9.6% year on year vs. Sony’s -2.3% and Nintendo’s +1.9%), thanks to annual recurring revenues and growth from its Xbox Game Pass subscription.
A plethora of high-profile releases in 2021, including Halo Infinite and Forza Horizon 5, attracted even more people to Game Pass while bolstering full-priced boxed and digital revenues.
After all, both titles feature live-service monetization, and more than a million people paid extra to play Forza before it came to Game Pass (leading to instant revenues of ~$50 million).
Owing to Xbox’s success with Game Pass, which recently crossed the 25-million-subscriber mark, it is unsurprising that both Sony and Nintendo are bolstering their service offerings via revamped PlayStation Plus and ongoing innovations to Nintendo Switch Online.
In fact, PlayStation just announced its PS Plus subscriber count actually dropped year-on-year, further clarifying why the company is refreshing the service with new tiers, cloud gaming, and a bigger game content library.
Mobile: SEA Limited Enjoyed Skyrocketing Revenues Last Year, But Big Challenges Are on the Horizon
The mobile games market grew +12.5% year on year in 2021. Of course, this rise also helped mobile’s two biggest platform holders grow their 2021 games revenues, +17.7% year on year for #3 Apple and +20.8% for #5 Google. Both these companies take a 30% cut of all game purchases via their respective app stores.
Meanwhile, Sea Limited (#10) saw triple-digit year-on-year growth thanks to its battle royale title Free Fire, which has quickly grown into one of mobile’s most popular and lucrative shooters, owing to its success in Southeast Asia, Latin America, and India.
But Free Fire has since been banned in India due to geopolitical tensions between China and India (Tencent has an 18.7% stake in Sea Limited). The ban will somewhat limit Free Fire’s longer-term growth trajectory and reach, as India accounted for roughly a fifth of Free Fire downloads and a quarter of its daily active users.
In the aftermath of the ban, Sea Limited’s market cap dropped by -16.6%. In its more recent financial report, Garena forecasts that its net bookings for 2022 will be somewhere between $2.9 billion and $3.1 billion — far lower than 2021’s $4.3 billion.
Regulations and geopolitical tensions and regulations are increasingly putting more pressure and uncertainty on game developers and publishers. We’ll be covering these developments more deeply in our upcoming 2022 Global Games Market Report. Want to be first in line? Reach out here!
The Market’s Biggest Acquisitions Would Change the Top 10 Significantly
Q1 2022 saw two of gaming’s biggest-ever public-company acquisitions. Take-Two is in the process of acquiring Zynga, while Microsoft is doing the same for Activision Blizzard.
Needless to say, if these acquisitions do not get blocked by the FTC, DoJ, or other regulators, they will have a huge impact on the top 10 in the coming years.
Here’s what 2021’s top 10 would have looked like if Microsoft already owned Activision Blizzard and if Take-Two already owned Zynga:
As you can see, Microsoft and Activation Blizzard combined would have been 2021’s #2 company ($21.0 billion), pushing Sony from #2 to #3 and pushing Apple from #3 to #4.
Tencent still sits comfortably in the lead, making it more challenging for regulators to argue that Microsoft’s acquisitions of Activision Blizzard is monopolistic in a wider market sense.
Activision Blizzard’s removal from the top 10 (as a single entity) would have resulted in Nintendo and EA each jumping one position each.
Meanwhile, If Take-Two owned Zynga in 2021, Take-Two would enter the top 10, jumping from #11 to #9. You can find an analysis of these acquisitions — as well as Sony and Bungie — right here.
All in all, 2021 was another fantastic year for the games market’s top 10 companies — and those who did face challenges already have strategies in place to overcome these hurdles in the future.
But where can you find out more about these strategies and developments? And whether they’re working?
We’re currently hard at work on our 2022 Global Games Market Report, which will cover all the latest market developments and their impact on the market.
Some of gaming’s biggest companies — including some of those discussed in this article — use the report to help fine-tune their strategies.
Want to learn more about how the report can help you? Ask us!