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Newzoo released a new report focusing on game companies’ revenue and growth in the last 12 months. This report shows that the top ten game companies generated 126 billion in revenue. It also shows how mergers and acquisitions will change the industry: If the Microsoft-Activision acquisition had happened a year earlier, the company would have edged out Sony and Apple.
In addition to revenue, the report also details how the companies have grown in the last year. While the 10 biggest companies generated a lot of revenue, they didn’t grow much. Instead, Newzoo reports that it’s likely that further acquisitions will drive their growth.
Tencent had the highest revenue by a considerable margin: $ 32.2 billion. It also had 9.9% year-over-year growth. Most of both were driven by its live service games, such as Honor of Kings and Clash Royale. Sony and Apple were silver and bronze on the list, respectively.
Newzoo also noted that Microsoft was showing decent growth as well, especially compared with its competitors: 9.6% vs Nintendo’s 1.9% and Sony’s negative numbers. It attributes this to the success of the Game Pass service, which recently passed the 25 million-subscriber mark. Also, it pointed out that Nintendo and Sony are seeing a bit of a bust following the pandemic boom of 2020.
How M&A changes things
In fact, Microsoft may take a much higher spot on next year’s report. Newzoo pointed out in its report that, if one combines Microsoft and Activision’s revenue, it would be in second place on the list. It wouldn’t beat Sony by much, but it would still be higher. Similarly, if Take-Two already owned Zynga, it would make the top 10.
Newzoo also adds that the mobile market is facing geopolitical tension that may hamper its growth. For example, lucrative mobile game Free Fire was banned in India due to Chinese company Tencent owning a stake in it. While Sea Limited, the parent company behind Free Fire publisher Garena, saw growth in 2021, it predicts its profits will drop considerably in 2022.
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