Even with Activision Blizzard, Microsoft wouldn’t top this list of 5 gaming giants

May 19, 2023

Simone Del Rosario Business Correspondent

By Simone Del Rosario (Business Correspondent), Emma Stoltzfus (Editor), Brent Jabbour (Producer)

The European Union and United Kingdom are divided on regulatory approval of Microsoft’s $69 billion acquisition of Activision Blizzard. The U.K.’s main concern is that the deal would give the Xbox maker too much control in the gaming arena. But this merger still wouldn’t give Microsoft the highest revenue in the industry. Here are the biggest gaming companies in this week’s Five for Friday.

5: Activision Blizzard

Activision Blizzard’s $7.5 billion in revenue in 2022 was enough to make it the world’s fifth largest gaming player. Last year, it had the highest selling mobile game with Candy Crush Saga and the biggest selling console game in Call of Duty: Modern Warfare 2. Its back catalog of games — in the Spyro the Dragon, Tony Hawk and Crash Bandicoot series — are enough to get Microsoft’s attention. That doesn’t even account for the hugely successful World of Warcraft.

But the company has faced a culture problem with California suing over a “frat boy” environment following claims of sexual harassment. Unfortunately, it’s not the only gaming company that has faced legal issues due to its handling of the workplace.

4: Nintendo

Japan’s Nintendo was founded in 1889, making Japanese playing cards at the time. It’s now a nostalgia-driven gaming behemoth that made $12 billion in revenue last year on the back of a unique brand of games. Mario, Zelda and Pokemon continue to be blockbuster franchises.

Nintendo also got grandma off the couch to play Wii bowling in the mid-2000s. There are even studies that show it can prevent dementia. Its latest console, the Nintendo Switch, has been a huge hit, selling 125 million units, making it the third best selling console of all time.

3: Microsoft

The $16.2 billion Microsoft made from gaming in fiscal year 2022 is just 8% of its overall business. Activision Blizzard would be the company’s biggest acquisition ever, which is pretty significant considering it has faced criticism dating back decades for being too big.

The Windows maker spent billions of dollars in recent years to buy ZeniMax media, the publisher of hits in the Doom and Elder Scrolls series, and Mojang, the studio behind Minecraft. All of this is to bolster its cloud gaming offering, which has been the biggest issue for regulators in the Activision Blizzard takeover talks.

2: Tencent

China’s Tencent is one of the biggest entertainment conglomerates on the planet. The company’s gaming division brought in more than $24 billion in 2022 and that’s only 31% of its total revenue.

Tencent has a stake in many major players in gaming, the most significant of which has been League of Legends maker Riot Games and Fortnite developer Epic Games. The first quarter of 2023 saw more growth in the gaming sector as it makes a play to be the most dominant player in the space.

1: Sony

Japan’s Sony will still be No. 1 with $26.5 billion in annual gaming revenue even if Microsoft is able to close the deal with Activision. But the PlayStation maker is still doing its best to stop its rival’s acquisition.

Sony’s first foray into gaming was a partnership with Nintendo to make what was essentially the SNES-CD. The partnership fell apart and the tech eventually became the first PlayStation. While it’s onto pushing the PS5, the PlayStation 2 is the best selling console of all time.

Tags: Activision Blizzard, Gaming, Microsoft, Nintendo, Sony

SIMONE DEL ROSARIO:

REGULATORS IN THE E-U AND U-K ARE SPLIT ON WHETHER TO ALLOW MICROSOFT TO GOBBLE UP ACTIVISION BLIZZARD. THE U-K’S WORRIED IT WOULD GIVE X-BOX MAKER MICROSOFT TOO MUCH CONTROL IN THE GAMING SPHERE. BUT YOU MAY BE SURPRISED TO LEARN THE MERGER IS NOT ENOUGH TO MAKE THEM NUMBER ONE. HERE ARE THE BIGGEST GAMING HEAVYWEIGHTS IN THIS WEEK’S FIVE FOR FRIDAY.

ACTIVISION BLIZZARD’S $7.5 BILLION IN REVENUE LAST YEAR WAS ENOUGH TO MAKE THE CALIFORNIA COMPANY THE 5TH BIGGEST GAMING PLAYER IN THE WORLD. IT HAD THE MOST SOLD MOBILE AND CONSOLE GAME LAST YEAR WITH CANDY CRUSH SAGA AND CALL OF DUTY MODERN WARFARE 2. ITS BACK CATALOG OF GAMES IS ENOUGH TO GET MICROSOFT’S ATTENTION. BUT THE COMPANY ITSELF HAS A CULTURE PROBLEM, CALIFORNIA SUED IT OVER A ‘FRAT BOY’ ENVIRONMENT FOLLOWING WOMEN’S SEXUAL HARASSMENT CLAIMS, ONE OF MANY LAWSUITS THE COMPANY’S FACED.

JAPAN’S NINTENDO WAS FOUNDED IN 1889, MAKING JAPANESE PLAYING CARDS. NOW, IT’S A NOSTALGIA-DRIVEN GAMING BEHEMOTH WITH 12 BILLION IN REVENUE LAST YEAR. BEYOND MARIO, ZELDA AND POKEMON, THE COMPANY ALSO GOT GRANDMA OFF THE COUCH TO PLAY WII BOWLING IN THE MID AUGHTS. APPARENTLY IT CAN EVEN PREVENT DEMENTIA. NOW THE NINTENDO SWITCH HAS BEEN A HUGE HIT, SELLING 125 MILLION UNITS, MAKING IT THE THIRD BEST SELLING CONSOLE EVER.

IT’S CRAZY THAT THE $16.2 BILLION MICROSOFT MADE IN GAMING IN FISCAL YEAR ‘22 IS JUST 8% OF ITS OVERALL BUSINESS, ESPECIALLY SINCE ACTIVISION WOULD BE ITS BIGGEST EVER ACQUISITION. MICROSOFT’S SPENT BILLIONS TO BUY THE MAKERS OF DOOM, THE ELDER SCROLLS AND MINECRAFT…ALL THAT TO BOOST CLOUD GAMING, WHICH IS THE BIGGEST ISSUE FOR REGULATORS IN THE ACTIVISION BLIZZARD TAKEOVER TALKS.

CHINA’S TENCENT IS ONE OF THE BIGGEST ENTERTAINMENT CONGLOMERATES ON EARTH, AND ITS GAMING DIVISION RAKED IN AROUND $24.5 BILLION LAST YEAR, 31% OF TOTAL REVENUE. IT HAS STAKE IN HUGE GAME COMPANIES LIKE LEAGUE OF LEGENDS MAKER RIOT AND FORTNITE MAKER EPIC. YOU KNOW, THERE’S A LOT OF CONCERN ABOUT CHINA’S CONNECTIONS TO TIKTOK, BUT WE DON’T HEAR MUCH ABOUT ALL THIS GAMING STUFF.

JAPAN’S SONY WILL STILL HOLD THE THRONE WITH $26.5 BILLION IN ANNUAL GAMING REVENUE EVEN IF NUMBER THREE MICROSOFT AND NUMBER FIVE ACTIVISION COMBINE THEIR GAMING PROWESS. BUT THE PLAYSTATION MAKER STILL WANTS TO GET ITS RIVAL’S DEAL AXED, EVEN IF IT HAS A LARGER PLAYERBASE. SONY’S FIRST JUMP INTO THE GAMING BIZ WAS ESSENTIALLY A SUPER NINTENDO CD, WHICH EVENTUALLY BECAME THE PLAYSTATION. THEY MAY BE ONTO THE PS-5, BUT THE PS-2 IS THE MOST SOLD CONSOLE OF ALL TIME.

TRUE STORY, WHEN I WAS A KID I WON A PS2 IN A RAFFLE BEFORE IT WAS EVER EVEN RELEASED. I TRADED IT FOR THE CASH. NO REGRETS. THAT’S FIVE FOR FRIDAY, I’M SIMONE DEL ROSARIO. IT’S JUST BUSINESS.