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Microsoft buying Activision forecasted to mean huge changes in top gaming

The global games market will generate $184.0 billion in 2023, growing +0.6% year on year. The market will grow to $205.7 billion by 2026, representing a 2021-2026 CAGR of +1.3% for the total market. Microsoft’s now-completed Activision Blizzard acquisition will mark huge changes in the top 10, gaming data company Newzoo says in a forecast.

“If we combine Microsoft and Activision Blizzard’s revenues for H1, the total is $10.4 billion. This would make Microsoft the #2 games company by revenues, docking Sony down to #3 for the first time. Tencent still sits comfortably at the top.”

Newzoo says that during the first half of 2023, Microsoft generated revenues of $6.0 billion, +3.5% more than in H1 2022. 

“Microsoft, unlike Sony, didn’t manage to sell more consoles in H1. That meant less revenue from software sales that normally complement new machines. Xbox’s service strategy offset this, with Xbox Game Pass contributing to Microsoft’s gaming growth.”

“Like PlayStation, Microsoft—as a platform holder—benefitted from many third-party releases in H1. The company also enjoyed a cut of ongoing revenues from live-service games like Fortnite, FIFA 23, and Call of Duty: Warzone 2.0.”

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“Microsoft also finally passed its industry-disrupting $69 billion acquisition of Activision Blizzard after nearly two fraught years. The acquisition will make the industry even more top-heavy.”

The company says that its forecast for console gaming is now $53.2 billion, growing +1.9% year on year. 

“The brightest spot of this year’s games market is the PC segment, which we expect to increase by +3.9% to reach $40.4 billion.”

“H1 saw the top 10 public game publishers already generating 30% of gaming’s entire 2023 revenues. The top 10 public game publishers generated revenues of $54.4 billion in H1.”

“The fact that only a few companies command such a massive market share reflects the industry’s ongoing consolidation. Microsoft’s Activision Blizzard acquisition will really shake things up. Essentially, an extra company’s revenues will be included in the top 10 going forward.”

Newzoo says that in the first half of 2023, the top three companies alone generated 16.4% of 2023’s global games market revenues.

“Tencent, Sony, and Apple were the top three public companies by games revenues.”

Newzoo says that Chinese-owned Tencent’s H1 2023 revenues were $15.4 billion, “comfortably securing it as the world’s biggest publisher by revenues. Its -3.6% year-on-year decline owes mainly to the market stabilizing after lockdowns, ongoing challenges in Tencent’s home market, and tightening platform-mandated privacy policies on mobile.”

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