The race to become the most profitable is on for these 10 public gaming industry companies.
Written By
Richard Rivera
Richard is a financial analyst for one of the largest professional consulting networks in the world. He keeps his finger on the pulse of the economy and helps his clients by recommending when to buy and sell investments. He strives to stay up-to-date on company strategies, business news, and economic trends.
The global game market totaled $46.5 billion in revenues in 2014, growing by over 10 percent. The top 25 companies in the market accounted for sixty-five percent – or $54.1 billion. This market growth signals the healthy expansion of the gaming industry, especially the rapid growth of mobile gaming. Corporate Culture has decided to count down the 10 companies pulling in the most revenue in the gaming market. China’s Tencent, the owner of developer Riot Games and its free-to-play mega-popular online multiplayer League of Legends took the number one spot on the list. Sony, Microsoft, EA, and Activision all found themselves on the list as well. But let us not forget about the up and coming mobile gaming branch of the industry. In terms of mobile, Apple, Google, and Candy Crush Saga publisher King continue to build on their success, collecting revenues large enough to rank in the top 10. Of course, what would gaming be without those who led the way – Nintendo and Ubisoft.
10. Ubisoft
Ubisoft claims to be the third largest independent publisher of video games worldwide. Ubisoft's worldwide presence includes 29 studios in 19 countries. The company has subsidiaries in 26 countries. Ubisoft's largest development studio is Ubisoft Montreal in Canada, which employs about 2,100 people. Ubisoft’s Montreal division has established many significant franchises. The Montreal Studio hones in the combined strength of Ubisoft’s global resources – it doesn’t just create games – and played an instrumental role in the development of franchises like Far Cry, Prince of Persia and Naruto. Additionally, they helped create series such as Splinter Cell and Assassin’s Creed. Ubisoft will certainly hold a major role in the future of the games industry. With its juggernaut franchises and strong gaming track record, Ubisoft has secured a solid ranking in the gaming market and its Montreal studio is a major reason why. In Ubisoft's 2008–2009 fiscal year, the company's revenue was €1.256 billion, reaching the 1 billion euro milestone for the first time in the company’s history. In 2014 Ubisoft’s gaming revenues were $1.8 billion, up from their $1.4 billion in 2013.
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9. Nintendo
Nintendo’s Entertainment and Analysis Division has revolutionized gaming again and again for more than thirty years. We’d like to describe them as legendary. Nintendo has created iconic series such as Super Mario Bros., the Legend of Zelda, and Metroid – often being led by such visionaries as Shigeru Miyamoto, Gunpei Yokoi, Hideki Konno, Katsuya Eguchi, Eiji Aonuma, Genyo Takeda and Takashi Tezuka. They redefined gaming by creating titles such as Super Mario 64, The Legend of Zelda: Ocarina of Time, Brain Age and Wii Sports. After the gaming industry crashed in the early ‘80s, Nintendo’s innovative contributions saved the entire industry. Today, they continue to redefine the gaming experience – changing the way we interact with games. For Nintendo it’s not a matter of ‘if’ but ‘when’ they’re going to revolutionize gaming again. In March 2015 Nintendo announced a partnership with Japanese mobile developer DeNA to produce games for smart devices – and they have announced that their first smartphone game, Miitomo, will be released in March 2016. Though Nintendo may be ranked 9th with $2.1 billion in revenues in 2014 – down from $2.4 billion in 2013 – revenues may sky rocket with their new smartphone gaming venture.
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8. King
King is a leading interactive entertainment company for the mobile world, with people all around the world playing one or more of their games. King has developed more than 200 fun titles, and offer games in over 200 countries and regions. Their franchise includes games such as Candy Crush, Farm Heroes, Pet Rescue and Bubble Witch. King’s most popular game is Candy Crush Saga, a match 3 game, it launched on Facebook in 2012 and gained enormous popularity. Their success on Facebook prompted them to launch Candy Crush Saga on iOS and Android. The game was downloaded over 10 million times in its first month and became the number one most played game on Facebook. By 2014 it had over 150 million monthly users. In November 2015, Activision Blizzard announced a unanimously-voted deal to acquire King for $5.9 billion. In the announcement, both companies stated that the acquisition would help boost King’s revenue which has been in decline for the last few years through Activision's global marketing reach. King’s pulled in a total of $2.3 billion in revenues in 2014, up from the $1.9 billion of 2013.
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7. Google
Google Play Games is a service designed for Android which features real-time multiplayer gaming capabilities, cloud saves, social and public leader boards, and achievements. More than 90% of Google Play’s revenue in the last half of 2014 came from gaming. The number of smartphones and tablets used worldwide for gaming topped 1 billion for the first time in 2014. Google Play’s revenue from games increased more than 75%. In fact, game spending on iOS and Android exceeds that of Nintendo and Sony’s handheld consoles. From a revenue standpoint, it's the established markets that continue to grow. The top 5 countries by revenue are: Japan, United States, South Korea, Germany and the UK. Top games also appear to be global successes, as both Candy Crush and Clash of Clans appear in the top 10 of US, UK, Germany, Japan, South Korea and India. Google’s 2014 revenues totaled to $2.6 billion – almost doubling their $1.4 billion revenue from 2013. If there is anything that is evident from Google’s success is that mobile gaming is certainly a booming branch of the gaming industry.
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6. Apple
For Apple’s app store, the money is in the games. Games are bigger money makers for Apple and Google than we might think. The mobile video game industry continues to ride a growing wave of free-to-play and casual game successes such as Supercell’s Clash of Clans and Rovio Entertainment’s Angry Birds Transformers. Consumers are spending so much time—and money—playing games on smartphones and tablets that it is changing the landscape of gaming. Games deliver the vast majority of Apple’s revenue from the App Store, accounting for an estimated 75% of income. Games make up 90% of the top 20 apps, and 87% of the top 30 and top 40. The App Store is an effective gaming store—at least when it comes to consumers spending money. Apple’s app store pulled in $3.2 billion in gaming revenues, compared to its $2.4 billion in 2013.
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5. Activision Blizzard
Activision Blizzard is the world's largest interactive gaming company and sits at the vibrant intersection of media, technology, and entertainment. A beloved and successful entertainment company, they’re composed of two main operating units: Blizzard Entertainment and Activision Publishing, and some of the most talented game development studios on the planet, such as Toys for Bob, Infinity Ward, Sledgehammer Games, and Treyarch. The result has been a remarkable string of the industry's biggest hits including genre defining Activision franchises like Guitar Hero, Call of Duty, Skylanders, Destiny, and iconic Blizzard blockbusters like World of Warcraft, StarCraft, Diablo, and Hearthstone. In fact, six times in the past decade, Activision Blizzard has created the biggest game of the year in the gaming industry. However, Activision Blizzard’s revenues in 2014 fell to $4.4 billion from $4.6 billion in 2013.
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4. Electronics Games (EA Games)
EA Games is home to the largest number of studio and development teams; this label is responsible for action-adventure, role playing, racing and combat games, marketed under the EA brand. In addition to traditional packaged-goods games, EA Games also develops massively multiplayer online role-playing games. Criterion Games and BioWare are two notable studios structured under the EA brand. Currently, EA develops and publishes games under several labels including EA Sports titles FIFA, Madden NFL, NHL, NCAA Football, NBA Live, and SSX. Other EA labels produce established franchises such as Battlefield, Need for Speed, The Sims, Medal of Honor, Command & Conquer, as well as newer franchises such as Crysis, Dead Space, Mass Effect, Dragon Age, Army of Two, Titanfall and Star Wars: Knights of the Old Republic, produced in partnership with LucasArts. EA’s gaming revenues grew in 2014 to $4.5 billion from $3.7 billion in 2013.
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3. Microsoft
Microsoft Studios is the video game production wing for Microsoft, responsible for the development and publishing of games for the Xbox, Xbox 360, Xbox One, Games for Windows, Steam, Windows Store, and Windows Phone platforms. For 2010, the review aggregation site Metacritic gave the average score of Microsoft games a 73.4 (out of 100), making them the fourth highest-scoring major publisher, ahead of rival console manufacturer Sony but behind Nintendo. For 2011, their average score rose to 77.2, the highest for any major publisher, including Nintendo and Sony. For 2012, they had dropped to second with an average of 73.0, just behind Electronic Arts. For 2013, they were ranked sixth (behind both Sony and Nintendo) largely due to their failure to publish any games scoring 90 or above for the first time in four years. For 2014, they were once again ranked sixth, falling behind Nintendo, Ubisoft, Electronic Arts, Sony, and Square Enix. Microsoft once again failed to release any games scoring 90 or above in 2014. Microsoft’s profits were consistent from 2013 and 2014, totaling $4.9 billion and $5.0 billion respectively.
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2. Sony
Sony spent 15 years digging its own grave by trying to monopolize media formats—MiniDisc, UMD, Blu-ray—as well as consumer electronics. The PlayStation 4 has been designed by veteran game maker Mark Cerny, as an apology and a rebirth for Sony's gaming business. They’re inching away from bizarre proprietary media. It hosts blockbusters like Bungie's Destiny and lets independent developers self-publish their wares. It also brings Netflix-style game streaming with the PlayStation Now service. Many consoles have declared to be an all-in-one living room hub, but the PS4 might be the first that stands a chance to deliver it in an affordable package with few of the inconveniences of a PC. Sony’s profits grew to $6.0 billion in 2014 from $4.7 billion in 2013. It’s safe to assume that the PlayStation 4 currently bodes well in the gaming industry.
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1. Tencent
Tencent is determined to develop a one-stop shop for mobile fun. Chinese social-networking conglomerate Tencent's omnipresent mobile app WeChat (or "Weixin") gained a massive 400 million users by offering everything to everyone: private messaging, chat rooms, shopping, and, of course, gaming. Within WeChat, players can compete in CrossFire – a military shooter – and League of Legends – a fantasy RPG – which reached No. 1 and No. 2 last year, respectively, as the top free-to-play games. In a clear sign that it sees both mobile and console as part of gaming's future, Tencent also acquired a sizable stake in Activision Blizzard, maker of the massively popular World of Warcraft and Call of Duty games. Tencent also acquired a minority stake in Epic Games, developer of franchises like Unreal, Gears of War, and Infinity Blade. Their gaming reach doesn’t stop there; Tencent acquired a majority equity interest in Riot Games, developer of League of Legends. Tencent tops our list with a whopping $7.2 billion in revenues in 2014, a 37% increase from $5.3 billion in 2013.
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The post 10 Of The Most Profitable Companies In The Gaming Industry appeared first on The Corporate Culture.