Today, Newzoo released its new Top 25 Public Companies by Game Revenues ranking, comparing performance in the first half year of 2014 with the same period a year ago. The ranking is a result of Newzoo’s continuous financial analysis effort and showcases an industry flush with vitality, illustrated by strong continued growth of mobile games and the boost provided by the introduction of next generation consoles. The top 25 companies generated over $25bn in the first half of 2014, an impressive jump of $3bn, or 17%, compared to same period in 2013.

Tectonic Rumbles as Tencent Speeds Out of Sight

The Top 5 ranking seem deceptively calm, with Tencent holding steady at pole position and the other “usual suspects” jostling for the remaining positions in the Top 5: EA, Activision Blizzard, Sony and Microsoft. Tencent is going from strength to strength in the Chinese market, having succeeded in extending its strong position in online F2P into the mobile games segment, boosted by clever integration of its WeChat/Weixin service. The result is striking: for the first half of 2014 Tencent’s revenues are an impressive 50% higher than the number 2 in the world: EA. The main reasons that EA did well in the first half of 2014 are the strong performance of flagship titles FIFA14, Titanfall and Battlefield 4 in combination with successful mobile titles: Real Racing 3, The Sims Freeplay, FIFA Ultimate Team and “evergreen” Simpsons: Tapped Out. It will be a tight race towards the end of the year considering the traditionally strong last quarter of Microsoft, Sony and Activision Blizzard.

Google and Apple join Battle for Global Runner-Up

Two “not-so-usual” suspects are joining the race for a top 5 position: Apple and Google. Apple’s rise to number 6 is a testament to the continuing strong impact mobile games are having on the gaming industry. The impressive growth, bolstered by increasing smartphone and tablet usage in emerging markets, is doubly revealed by Google rising 5 places to take number 7. With a H1 year-on-year growth rate of over 100% for Google and 64% for Apple, they are clearly both strong contenders for a global top 5 position in the 2014 full-year rankings. Next year will feature an epic battle between the two media giants for the runner-up position behind Tencent.

The Asian Quest for Local Success and Global Domination

Asian companies accounted for 49% of the total revenues of the Top 25 companies. This emphasizes the increasing contribution of this region to the growth of the global market, in terms of both local consumer revenues as well as investments in Western companies. Illustrative of the increased M&A activity of Asian companies in the global games space is Alibaba’s investment in Kabam just ahead of its record-breaking IPO and Softbank, who is rumored to be using its gains from the same IPO to acquire Dreamworks.

The spoils are not shared evenly however, with companies in regional markets competing fiercely for position. DeNA is perhaps the most visible casualty of this, falling 7 places to Number 14, with a negative H1 year-on-year growth of -31%. It’s not all negative news for the Japanese mobile game companies however, with GungHo Entertainment entering the global Top 10, taking number 9 position, following year-on-year growth of 29%. Notably, this does not include revenues generated by GungHo’s majority stake in Supercell, that, if public, would most probably also enter the top 10 of largest game companies this year.

While not currently listed in the top 25, Japanese public company Mixi has already generated half year revenues of $128M with its Q3 2013 release of Monster Strike. Some of the other veteran Japanese game companies such as Square Enix, SEGA and BandaiNamco also seem to have turned a corner, in most cases at least partly thanks to mobile success.

Outlook On Second Half of 2014: Slow Down Ahead?

The growth rate for the Top 25 for the full year 2014 will likely not be as strong as in H1. Firstly, the boost in sales generated by the introduction of the next gen consoles in Q4 2013 is likely to be reflected in lower H2 year-on-year growth rates. Secondly, the quarterly growth seems to be slowing down for a number of companies that have experienced enormous growth in the past few years. King, a new entry (#8) in the top 25 rankings since becoming public in 2014, is a case in point. While its revenues grew by an impressive 87% in H1 compared to the same period a year ago, their Q2 results were lower than those in Q1: $594M and $641M.

Ubisoft did very well with revenues almost doubling quarter-on-quarter from $259M in Q1 to $482M in Q2 2014, driven largely by the long-awaited Watch Dogs. However, companies such as Ubisoft and TakeTwo are increasingly dependent on the success of their key franchises’ on consoles, which make their revenues much more volatile and their individual periodic growth rates less indicative of the broader underlying growth rate of the industry.

Newzoo’s Top 25 Public Companies by Game Revenues ranking can be found here.

Newzoo’s Financial Analysis and Global Data Model

Newzoo performs continuous financial analysis of public and private game companies. This is only one of many data sources that are fed into Newzoo’s global data model that powers its annual Global Games Market Report. Since 2013, Newzoo also provides a Premium version of this report that includes quarterly updates and datasets with the latest take gamer and revenue figures on a global, regional and local level. This service is now used by the majority of the top 25 companies featured in the Top 25 Public Companies by Game Revenues ranking. More information on Newzoo’s Global Games Market Report Premium is here.

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