Thursday, April 10, 2014

Tencent Is Bigger Than EA, Microsoft, and Activision

Tencent, the China-based publisher that owns League of Legends, is now considered the largest
gaming company in terms of worldwide revenue.

Off the top of your head, which gaming company would you say is the biggest worldwide? Some might respond with manufacturers like Sony or Microsoft, while others would point to games publishers like Electronic Arts and Activision. According to a new market report, however, all of the above are being outperformed by Chinese investment holding company Tencent. Known largely in the West for its ownership of League of Legends developer Riot Games, Tencent experienced a 45 percent annual growth rate in 2013, slipping past Microsoft and obtaining an estimated $5.3 billion in revenue.

While Tencent's rise is based on current estimates, the figures are probably accurate considering the popularity of video games in China, especially among the PC market. It's also worth noting that compared to other companies that might see profit dips until a major release hits the market, Tencent saw steady growth during each financial quarter. The gaming company also has shares in Epic Games and Activision, and publishes the free-to-play Call of Duty: Online.

"Tencent has shown very consistent quarterly revenue growth for a few years in a row, due to its focus on online free-to-play games and, more recently, mobile games," Newzoo chief executive Peter Warman said. "It is much less dependent on individual blockbuster releases than the traditional publishers and also on sales during the key Christmas holiday period. At the same time, new opportunities arise in China for Western IP as the market opens up slightly and mobile devices provide a new potential entry point."

Tencent's top placement isn't the only interesting detail of the report; for example, Apple is showing impressive growth, while Google's revenue expanded by 250%. That being said, the fact that Tencent was able to muscle past Microsoft, Activision, Sony, and EA means the company is worth keeping an eye on in 2014.

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