Nintendo leads the
ranking of gaming companies, based on software revenues. Gaming has become big
business, especially during the last decade: the industry grew at double digit
rates until last year. The top 10 companies now have a combined revenue of over
24 billion USD, in a market estimated to be worth well over 50 billion USD,
which is slightly less than in 2008 (-5%). Despite the economic crisis, the
online gaming segment is still booming, resulting in fast growth of the leading
companies in this market.
Leaders
Nintendo is the
largest gaming company in the world. Bringing gaming to new audiences with the
Wii, Nintendo reached a peak in gaming revenue in 2008. In 2009, software
revenues were a little lower (-6.2%), as was the case for most top 10
companies. The largest American game publishers, Activision Blizzard (#2) and
EA (#3), saw revenues decline with -7.4% and -12.7% respectively. Sony and
Microsoft, both competing with Nintendo on the game console market, are far
behind with less than a third of Nintendo's software revenues.
Seven companies in the
2010 list have gaming software revenues above US$1 billion.
Fast growing companies
Growth of gaming
revenues mainly took place in Asia, the top 5 fastest growing companies are all
from Asia. Out of these five, four are online computer game companies. NCSoft
and Nexon are the leading South Korean companies, NetEase and Perfect World are
headquartered in China.
Trends
As the fast growth top
10 shows, online gaming is becoming more popular. For 2009, the market share of
online games is estimated at one sixth of the total video game market. This
share is rising quickly, as are the companies in this field. It took the most
successful companies only a few years to make hundreds of millions USD. Chinese
Shanda Interactive is the largest pure-play online gaming company with sales of
over US$ 700 million. US based Zynga, the maker of FarmVille, made an estimated
$270 million in 2009. Traditional game makers are aware of the online goldmine,
and are publishing their own online titles.
Like elsewhere in the
software industry, the motto in the gaming industry is: acquire or be acquired,
resulting in a continuous flow of company transactions:
- Playfish, a
successful European maker of social network games, was taken over by Electronic
Arts in 2009.
- Koei and Tecmo
merged in 2009. Revenues rose, but not enough to move up the ranking.
- Square Enix got into
the top 10 after acquiring Eidos in April 2009.
Conclusion
The gaming industry
has quickly grown in the past, and we expect it to keep growing faster than the
software industry average. As the world population grows richer, progressively
more money is available for entertainment, which provides a sound revenue
driver for the gaming industry.
