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Game companies report the lowest growth since 2014

Published: 19:04, 08 November 2018
Collage of PlayStation 4, Xbox One and Nintendo Switch
PS4, Xbox One, Switch

Market research firm Newzoo's report on the first half of 2018 has found that the substantial growth of $50 billion by top 25 public game companies is still the lowest first-half growth since 2014. Consoles are on the green though.

Sony, Microsoft and Nintendo have seen growth of more than 20 per cent in the same period, which is quite the feat. PlayStation 4, Xbox One and Switch made $10.8 billion in revenue, where subscription services played an important role. Granted, Sony and Microsoft did better with PlayStation Plus and Xbox Live, respectively, but Nintendo's fledgeling efforts still raked in 24 per cent of its revenues in the first half of 2018.

Sony were greatly helped by a strong lineup of PlayStation 4 exclusives like Detroit: Become Human and God of War and the same goes for Nintendo, with their Mario Kart 8: Deluxe and The Legend of Zelda: Breath of the Wild to name but a few.

Nevertheless, Microsoft showed that exclusives are not a mandatory prerequisite for growth, with Xbox software and services notching up growth of 36 per cent. At the same time, they announced plans to expand the Game Pass to PC. This, coupled with some upcoming acquisitions, should push Microsoft into more exclusive-friendly waters as well, Newzoo think.

Newzoo's report says that "Tencent remains the undisputed number one in the top 25", even though the company's second-quarter earnings failed to reach double-digit on-year growth for the first time in more than five years. The impeded growth was attributed to China's recent gaming crackdown, which ultimately affected the entire mobile gaming sector.

Indeed, the report has found that NetEase, who are Tencent's main competitor in the country, also reported a decrease in first-half revenues. Being a company that's dependent on domestic revenue, NetEase's situation won't be getting easier either.

Tencent Games Logo of Chinese game developer Tencent Games Tencent Games

Interestingly enough, top 10 public companies seem to have been the primary reason for the sector's growth, reporting upwards of 16 per cent on-year growth. Top five, in the meantime, upped their share in the top 25 revenue from 52 to 57 per cent. 

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