By Barry Janoff
April 6, 2017: Stating that "this will be another pivotal year for everyone involved in the games business," a new report shows that the global games market approached a record $100 billion in revenue in 2016, will top $100 billion this year and is predicted to continue its growth for years to come.
Led by Tencent, Sony, Activision Blizzard, Microsoft and Apple, and driven by eSports, mobile games and live-streaming, revenue in the global games market in 2016 hit $99.6 billion, with mobile games accounting for $36.9 billion, or 37% of the market.
That is up from $91.8 billion in 2015. And growth is not expected to slow.
Revenue is predicted to hit $106.5 billion this year, $112.5 billion in 2018 and $118.6 billion in 2019, according to the just released Global Games Market Report from research, marketing and consulting firm NewZoo, San Francisco.
Those numbers continue a trend that saw global revenue in 2014 at $52.7 billion, in 2013 $48.6 billion and in 2012 $42 billion.
"This year will be another pivotal year for everyone involved in the games business," Peter Warman, CEO and co-founder for NewZoo, states in the fifth annual Global Games Market Report. "As predicted at the end of 2013 in our PC Gaming: Power to the People report, eSports and live-streaming are changing the gaming landscape on a global scale and at an unbelievable pace.
"Consumers are embracing the possibilities that games now offer, to view, create and play on every screen. Managing these communities is at the center of any game company’s strategy," wrote Warman.
The Top 25 public companies in 2016 accounted for some $70.4 billion in game revenues in 2016, up some $10 billion, 17%, over 2015.
The Top Ten accounted for 54% some $53.7 billion. Although some of the growth was the result of acquisitions, "most of the growth was organic and accounted for by companies that were already market leaders," according to NewZoo.
Leading the charge so far in 2017: League of Legends (Riot, pictured above), Heroes of Warcraft (Blizzard), Counter-Strike: Global Offense (Valve), Minecraft (Mojang) and World of Warcraft (Blizzard), per NewZoo.
Tencent remains the world’s largest company based on game revenues, generating $10.2 billion in 2016, or 10% of the global market. Adding in Supercell, which Tencent acquired in 2016, this figures would rise to $12.5 billion, or 13% of the global games market, according to NewZoo.
After Tencent, the Top Ten included Sony ($7.8 billion), Activision Blizzard ($6.6 billion), Microsoft ($6.5 billion), Apple ($5.9 billion), EA ($4.6 billion), NetEase ($4.2 billion), Google ($4.1 billion), Bandai Namco ($2 billion) and Nintendo ($1.88 billion).
In 2016, 58% of growth in the global games market came from the Asia-Pacific region, which accounted for 47% of the market — $46.6 billion (up 10.7% versus 2016).
China was the major driving force, accounting for more some $24.4 billion in revenue.
The U.S. dropped to second in 2016, accounting for $23.6 billion in revenue.
Japan was third with $12.4 billion in game revenue.
The Top Five also included South Korea and Germany, each with just over $4 billion in revenue.
Not everyone in the category experienced growth across the board.
NewZoo said that Nintendo was the only company in the Top Ten whose revenues declined from 2015, down 6%.
Pokémon Go "was a huge success, but generated little direct revenues for Nintendo, although it did boost sales of other title in the Pokémon series and drove Nintendo 3DS sales," per NewZoo.
And while Nintendo’s Super Mario Run, released in December 2016, grossed around $50 million during its first few months on the market, "relative to the huge number of downloads, this result is not very impressive," reported NewZoo.
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