Top 25 Public Game Companies Earned More than $100 Billion in 2018
In 2018, the top 25 public companies by game revenues generated a combined $107.3 billion, up +16% from 2017. This marks the first time they have exceeded the 100-billion-dollar mark — a major milestone for the market. Together, these companies accounted for almost 80% of the $134.9 billion global games market.
Tencent alone earned $19.7 billion in revenues, accounting for almost 15% of the entire games market, and was the world’s #1 public company by game revenues for the sixth year running. Tencent is followed by Sony, Microsoft, Apple, and Activision Blizzard, respectively. Combined, the top 10 companies grew +19% year on year. However, the top 11–25 companies together grew just +6% year on year, with many companies in this bracket unable to keep pace with the market leaders.
In this article, we will delve into the performance of the whole top 25, looking specifically at Google’s and Apple’s increased involvement in the games market and the strong performance of the three console platform holders: Microsoft, Sony, and Nintendo. The revenues of public companies are tracked as part of Newzoo’s Global Games Market Report.
Apple and Google Are Becoming More Active in the Gaming Space
Apple and Google have always fared well on our top 25 public companies ranking. The American tech giants’ consistently strong performance is a direct result of revenues generated by their respective app stores, where both take their cut of every transaction. Both companies recently revealed new initiatives that will expand their involvement in the global games market.
Google recently announced Stadia, its cloud gaming platform that allows users to stream entire games via the Internet. The games are run on hardware at Google’s data centers, which means the consumer doesn’t need to own expensive hardware. At the same time, Google announced the creation of Stadia Games and Entertainment, its own studio that will develop Stadia-exclusive games. Learn more about this disruptive technology in our cloud gaming report, which you can download for free here.
Apple, on the other hand, is working on Apple Arcade, which will be released later in 2019. The subscription service gives users access to a library of 100 new games for a monthly subscription fee. Interestingly, the platform features no ads and no in-app purchases, key drivers for growth in the mobile games market in past years.
For years, both companies have acquired top talent from the games market but have remained relatively quiet about their expansion plans. It is now clear that both companies will use their unique strengths to greatly expand their activities in the games market. Google leverages the global presence of its data centers and strong technology credentials, while Apple leverages its expertise in accessibility and an overarching focus on content curation. Meanwhile, they will continue to reap the benefits of their lucrative app stores while catering to new segments of the market with their new services.
Console Platforms Lead the Charge in Top 10’s Year-on-Year Growth
Console showed particularly strong growth in 2018, accounting for 38% of revenues earned by the top 25 companies, up from 34% in 2017. Notably, five out of the top 10 companies earned most of their revenues from console gaming.
Naturally, the three platform holders Sony, Nintendo, and Microsoft drove console’s strong performance. This partially offset slower-than-expected revenue growth across mobile and PC. Sony generated revenues of $14.2 billion, a year-on-year growth of +41% — the highest in the top 10. This is no surprise, as there was an array of critically and commercially successful PlayStation 4 exclusives throughout the year, including the highly acclaimed God of War. High-profile third-party titles such as Red Dead Redemption 2 also strongly contributed to the company’s revenues through the PlayStation Network.
Microsoft also performed well — so well, in fact, that it jumped one position from last year to #3, overtaking Apple. Microsoft generated revenues of $9.8 billion in 2018, growing +32% from 2017. The company has been making strides with its Xbox subscription services, Xbox Game Pass, and Xbox Live. Owing to this success, it is unsurprising that the company is starting to position Xbox as a service rather than a hardware platform.
Nintendo also did well, with revenues of $4.3 billion, up +36% from 2017. This was driven by the popularity of the Nintendo Switch, which — like in 2017 — had an appealing lineup from Nintendo’s strong IP roster.
As Microsoft and Nintendo now have vastly different value propositions, they are no longer in direct competition. The two companies have even developed a working relationship of sorts, including playful communications regarding crossplay and Microsoft bringing Xbox Live and once-Xbox-exclusives to the Switch. Sony, though, has kept its cards to its chest. While the company has remained secretive about its plans going forward, this is not a problem for the games market and certainly not a problem for Sony, which continues to please fans with its original content.
Other Console-First Publishers’ Growth Stagnates While Aristocrat and Capcom Revenues Increase
Under the pressure of a dynamic market, continuously changing business models, and high consumer expectations, traditionally large console publishers such as Activision Blizzard, EA, and Ubisoft have struggled to keep pace with the growth of the platform holders.
Activision Blizzard (#5) earned revenues of $6.9 billion, growing +6% over last year. Its console revenues were up year on year but were partly offset by declining mobile revenues. To counterbalance this, Activision Blizzard is looking to bring its strong IP to mobile in the coming years, with titles such as Diablo Immortal. Meanwhile, EA (#8) generated revenues of $5.3 billion in 2018 with year-on-year growth of just +4%. Similarly, Ubisoft (#13) produced $2.2 billion in revenues, growing +3% year on year. In the face of growing slower than some of the competition, Activision Blizzard, EA, and Ubisoft have all strived to diversify their release lineup over the past few years, especially their games-as-a-service offerings.
Since 2017, Nexon gained a place on the ranking, reaching #12 and moving above Ubisoft. Nexon earned $2.3 billion in 2018, growing +8% year on year. Nexon’s owner put his stake in the company up for sale at the start of 2019, making it potentially the largest acquisition ever seen in the games market. Meanwhile, Netmarble (#14) reported one of 2018’s biggest declines, dropping -17% year on year. The company generated revenues of $1.9 billion in 2018, compared to $2.3 billion in 2017. Many Netmarble titles scheduled for 2018 were delayed until 2019, so the company largely leaned on its aging lineup of games.
Aristocrat Leisure was one of the top 25’s fastest growers, with revenues increasing +187.3% year on year to $1.1 billion. The Australian company’s success was driven by its portfolio of mobile casino games, bolstered by Aristocrat’s acquisition of Plarium Global in October 2017 and Big Fish Games in January 2018.
Capcom too had an impressive year, rounding off the ranking at #25 with revenues of $809 million (year-on-year growth of +49%), led by the success of Monster Hunter: World. The Monster Hunter series had traditionally been a major success in Japan, but the latest installment in the franchise resonated with Western audiences. The company’s success will likely continue into this year, thanks to the successful launches of Resident Evil 2 and Devil May Cry 5 in Q1 2019.
Newzoo’s Global Games Market Report: More than a Report
Interested in even deeper insights into the revenues of the top 25 public game companies and regional games markets? Are you looking to prioritize your global mobile strategy, develop a realistic business plan, or increase your marketing ROI? Look no further than Newzoo’s Global Games Market Report.
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