Games makers at E3 are hoping to follow the success of online multiplayer video game ‘Fortnite’ by incorporating the popular ‘Battle Royale’ genre into their new titles. (June 13) AP
Tencent and Apple are challenging traditional game publishers.
The world’s top 25 gaming companies generated $94.1 billion in combined software revenue last year, according to Newzoo, marking a 29 percent jump from 2016. Mobile gaming revenue accounted for 46 percent of the total, followed by console games at 33 percent and PC games at 21 percent.
Sony, Microsoft, and Activision Blizzard are well-established game publishers. However, market leader Tencent(NASDAQOTH: TCEHY) isn’t a household name in the United States.
The Chinese tech giant’s video game portfolio includes top e-sports title “League of Legends,” as well as mobile hits such as “Arena of Valor,” “Clash of Clans” and “PUBG Mobile.” Tencent has a 40 percent stake in “Fortnite” publisher Epic Games and smaller stakes in Activision Blizzard and Ubisoft.
Meanwhile, many people forget that Apple(NASDAQ: AAPL), which takes a 30 percent cut of all sales of iOS games in its App Store, also is a leading game publisher. Though $8 billion equals just 3.5 percent of its 2017 revenue, that growth clearly complements the expansion of its services ecosystem, which includes Apple Pay, Apple Music, iTunes, and other services. The Mac maker is aiming to double its fiscal 2016 services revenue by 2020.
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Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool’s board of directors. LinkedIn is owned by Microsoft. Leo Sun owns shares of Apple and Tencent Holdings. The Motley Fool owns shares of and recommends ATVI, Apple, and Tencent Holdings. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.
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