PARIS: In a global video game market estimated at over $300 billion by Accenture, it’s time for consolidation with several players like Microsoft, Tencent and Sony getting stronger through acquisitions. Review of the forces present.
Tencent, the Middle Empire
World No. 1 Tencent reigns both in Asia — the most important market in the video game industry — and in the rest of the world, thanks to a myriad of investments.
The Chinese giant notably owns Riot Games, the publisher of the planetary success “League of Legends”, and very popular mobile games such as “Honor of Kings” and its more than 100 million daily active users or “PlayerUnknown’s Battlegrounds” (PUBG ).
He also acquired the Finnish studio Supercell (“Clash of Clans”, “Clash Royale”, “Brawl Stars”) in 2016 for 8.6 billion dollars. A record at the time.
Tencent also owns shares in Epic Games, the publisher of the phenomenon game “Fortnite” with more than 350 million users to its credit, and in the French Ubisoft (“Assassin’s Creed”, “Far Cry”, “Just Dance” …), on which he recently helped the Guillemot family to strengthen their grip.
Sony and its targeted takeover policy
The Japanese group Sony has sold more than 500 million copies of its Playstation – all models combined – since 1994.
Through its subsidiary Sony Interactive Entertainment, it controls a host of studios (Insomniac, Housemarque…), which have developed exclusive titles for its machines such as the “Spider-Man” saga.
The January 2022 acquisition of American developer and publisher Bungie (creator of “Halo” — Xbox smash — and “Destiny”) for $3.6 billion bolstered its games portfolio.
Sony also announced in April an investment of 2 billion dollars in Epic Games, made jointly with the parent company of the Danish Lego (up to a billion each), to finance the efforts of the publisher of Fortnite in its development of the “metaverse”.
Microsoft, the bulimic
The American behemoth Microsoft no longer hesitates to put the means: it had thus put on the table in January 68.7 billion dollars to seize Activision Blizzard, the largest acquisition in the history of this industry.
This operation, which should allow him to get his hands on major titles like “World of Warcraft”, “Call of Duty” and “Diablo”, remains however subject to the approval of competition authorities around the world.
Brussels has just opened an in-depth investigation into this takeover, saying it fears its potential consequences for the sector.
The group behind Xbox consoles had already strengthened with the acquisition of the Swedish studio Mojang, creator of “Minecraft”, in 2014 and ZeniMax Media in 2020 (“Elder Scrolls”, “Fallout” …).
Microsoft also aims to establish itself as the “Netflix of video games” thanks to the Xbox Game Pass, its online platform which has just exceeded 25 million subscribers. It allows you to download games to physical media or play them via the cloud.
A market in which its major competitors, Sony and Nintendo, have positioned themselves, but also other “Gafam” like Apple.
Nintendo, priority to “homemade”
With its legendary house sagas like “Mario”, “Zelda” or “Pokémon”, Nintendo stands out from its competitors with its mainstream positioning around its Switch console, without participating in the acquisition frenzy.
For example, he just bought the Canadian Next Level Games in early 2021, a studio to which he had already entrusted several of his brands to develop titles on his machines.
In its 2021/2022 financial year, 23 million Switches were sold worldwide.
Take-Two, Electronic Arts and the Independents
Although the wind of consolidation has risen for a while, several leading publishers remain independent and could constitute as many targets in the future, like the Americans Take-Two and Electronic Arts or the Japanese Square Enix.
Developer, publisher and distributor, Take-Two is a heavyweight with its very popular games like “Grand Theft Auto”, “NBA 2K” or “Red Dead Redemption”.
It paid $12.7 billion to acquire mobile game developer Zynga, creator of the farming simulation “FarmVille”.
With a turnover of 5.6 billion dollars in 2021, Electronic Arts also has a portfolio of highly acclaimed licenses such as “Fifa”, “Battlefield”, “Apex Legends”, “The Sims”, “Madden NFL” or “Need for Speed”.