Xbox may soon be set to outpace PlayStation as the bigger gaming company, and the reason won’t surprise you.
As explained by Jez Corden on Windows Central, this is based on an analysis from Newzoo, a video game industry data and analytics company. The company created a diagram indicating that Microsoft and Activision made $ 10.4 billion revenue in 2023. This puts them safely above Sony’s $ 8 billion, but you may note from how I worded this that this comes with some huge qualifiers.
The first one, is that based on Newzoo’s diagram, Tencent would still tower over both companies, having generated $ 15.4 billion. Tencent has its own mobile game division that makes hand over fist on its own, but it also has a dizzying number of investments in other video game companies across the world, including some of the industry’s giants.
That list included a minority stake in Activision Blizzard, prior to the Microsoft purchase. However, Tencent still has money in giants like Epic Games, Riot Games, Ubisoft, and Discord. And there is an even broader number of studios of varying esteem and size, including FromSoft, PlatinumGames, Paradox Interactive, and Techland.
So if we were to be honest, this horse race for revenue really had been about investments in various other successful companies, rather than generating value internally. It’s a race Tencent has been very successful in, and one that Embracer Group is struggling to grab a foothold into.
Sony has also been running the same acquisition game, with so much money being invested into upcoming projects that it adversely affected their revenue reports. Nonetheless, Microsoft’s deal for Activision is certainly the biggest one coming out of this year, and they themselves have told investors to expect an immediate increase of 50 % revenue because of the addition of all their studios.
The other proviso, although it may only matter to gamers who care about the history, is that for a few years the Xbox 360 was ahead of the PlayStation 3. That didn’t reflect on the total revenues of Microsoft and Sony at that time, and both were industry giants that had their own financial and identity struggles in the mid-2000s.
Of course, even that horse race comes with its own qualifier, as the Wii proved the clear winner of the seventh generation of consoles. It’s certainly a reminder that in these and other cases, Sony and Microsoft were always competing with more than each other.
In any case, fanboys eager to accuse Microsoft of buying their way to this position should be introspective on how Tencent started that horse race years ago, and that this huge win could easily turn south if Microsoft and Activision do just a few things wrong.