🎮 Console Wars Visualized
Analyzing the dynamic shifts in the gaming landscape
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According to a survey by the Entertainment Software Association (ESA), 72% of US children aged 10-17 want video games as gifts for Christmas.
From these, the top specific asks were:
💳 Game subscriptions (39%).
🖥️ New consoles (38%).
🎮 Gear & accessories (32%).
💰 In-game currency (29%).
💿 Physical games (only 22%).
This data gives unique insights into how the gaming industry has evolved.
Popular games like Fortnite and Roblox are free-to-play, which explains kids’ preference for in-game currency over physical games. And with an expanding catalog of games included in subscriptions like Microsoft Game Pass and PlayStation Plus, kids get more bang for their bucks with unlimited access a la Netflix.
In this issue, we’ll examine how gaming titans like Sony, Microsoft, and Nintendo navigate the secular shifts towards mobile gaming, free-to-play, subscriptions, and games-as-a-service.
Today at a glance:
Largest Gaming Companies by Revenue.
Best-selling Consoles Globally.
Nintendo’s Console Cycle.
Sony vs. Microsoft.
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1. Largest Gaming Companies
Gaming is only a portion of the revenue for large companies like Tencent, Sony, or Apple. So, my favorite way to look at the largest gaming companies is to isolate the estimated gaming revenue.
Newzoo provides quarterly estimates of gaming revenue, particularly highlighting the significant cut Apple and Google take from their respective app stores.
Let’s review some critical context for these gaming titans:
🎮 Microsoft buys Activision: Following the blockbuster acquisition of Activision Blizzard for $69 billion in October, Microsoft is expected to become the third-largest gaming company by revenue, leapfrogging Apple.
📱 Mobile dominance: According to IDC, Mobile is projected to account for 56% of gaming revenue in 2023, compared to 22% for consoles and 21% for PC.
📈 Big tech is on Mobile: Major players like Tencent, Apple, Google, and NetEase predominantly earn gaming revenue from mobile platforms. This trend sets them apart from traditional console-focused giants like Sony and Microsoft.
🔄 A challenging transition: Mobile has been a tough nut to crack for companies historically relying on a premium model on consoles, selling games for $40 to $70. Most large publishers had to rely on M&A to transition to Mobile. For example: