Latest Newzoo Report Shows Significant Revenue Growth in the Games Industry...Especially for Tencent
Game industry analysts Newzoo have released their Global Games Market Report for the first half of 2016, and with it comes good news for investors.
According to the firm, game revenues are up 22% from last year, mostly thanks to mobile games. In fact, mobile games dominated the market, accounting for almost half of the top 10 companies' revenue.
Chinese gaming giant Tencent placed squarely at the front of the pack, thanks to its majority stake in League of Legends developer Riot Games, as well as various minority stakes in studios like Epic Games and Robot Entertainment, plus investments in mobile games overseas.
That lead is only expected to solidify after Tencent's $8.6 billion acquisition of Clash of Clans developer Supercell earlier this year. The company is expected to make that investment back -- and then some -- by the end of the year, with over $13 billion in revenue from games alone.
To give a sense of just how dominating Tencent has been, Newzoo pointed out that the company's profits from the first half of this year alone dwarf the profits that both Electronic Arts and Activision Blizzard have ever made in a full year.
Mobile games didn't completely run the show, however. Sony came in as runner-up thanks to strong sales on the PlayStation Network and a growing base of PlayStation Plus subscribers. The console manufacturer also placed in the list of fastest growing revenue, increasing its profits almost 50% from last year.
A surprisingly high earner for the year was Metal Gear Solid publisher Konami. Konami made an abrupt and controversial exit from AAA development earlier this year, following their choice to fire long-time game director Hideo Kojima.
The company's bet seems to have paid off however, netting them the number one spot on the fastest growing companies list -- thanks to a renewed focus on mobile and casino gaming.
Another surprising addition to the list was Ubisoft, which cracked the Top 25 earners for the first time ever this year. This was mostly thanks to the huge success of its loot-based third-person shooter Tom Clancy's The Division, which drove the company's revenues up almost 200% this year.
Warner Bros., on the other hand, dropped from the Top 10 due to a lack of AAA releases this year compared to heavy-hitters like Mortal Kombat X and Batman: Arkham Knight in 2015.
The full ranking of the Top 25 public companies can be found on Newzoo's website.