With Activision Blizzard under its wing, Microsoft is ready to (candy) crush rival Sony for the first time.

Earnings expectations for Microsoft and other tech giants

After months of back and forth with regulators, Microsoft’s $69 billion acquisition of the famed Call of Duty game publisher finally closed in October. The delay precluded Activision’s revenue from being counted as part of Microsoft’s gaming total for the first half of 2023. If the merger first announced in January 2022 had gone through earlier, Xbox’s parent company would have already beaten the PlayStation maker.

This January through June, Microsoft and Activision’s combined gaming revenue was $10.4 billion—comfortably more than Sony’s $8 billion—according to data provider Newzoo.

Charted: Microsoft and Activision Blizzard together beat Sony

Microsoft’s hold on gaming after the Activision takeover

📱 Microsoft now has a stronger roster of mobile games, including new addition Candy Crush Saga, the third-highest-grossing mobile title worldwide in 2023. Mobile games are key, given that they make up almost half of the overall gaming pie, with console and PC accounting for 29% and 21%, respectively.

🎮 Back in 2001, a Sony executive claimed that Xbox was “finished.” But the Microsoft console has only become more entrenched, especially in the West. Japanese giant Sony still dominates, but “with our Xbox Series S and X consoles, we have taken share globally for two quarters in a row, and we are the market leader this quarter among the next-gen consoles in the United States, Canada, UL, and Western Europe,” Microsoft CEO Satya Nadella said during the company’s April 2022 earnings call.

🧑🏽‍💻 The number of Xbox developers rises from 23 to 38, though some Activision developers have multiple teams or just serve as support studios.

🏪 As the European Union paves the way for Apple and Google to open their mobile platforms to app stores owned and operated by other companies, Microsoft plans to launch its own store for games across mobile devices next year. Activision’s offerings will help it beef up the virtual shop.

Sony PlayStation vs. Microsoft XBox, by the digits

$8.8 billion: How much more Sony’s PlayStation made than Microsoft’s XBox in 2022

3 million: Copies of PlayStation 5 exclusive Final Fantasy XVI sold in its launch week alone

35.5%: Year-over-year jump in Activision Blizzard’s H1 revenues—the highest growth for any top 10 gaming company in Newzoo’s analysis

50%: Increase in gaming revenue Microsoft has told investors to expect in its next quarter, thanks to its combined income stream with Activision

41%: Share of the world’s population estimated to be playing or have played a video game

Company of interest: Tencent

Tencent has long topped the game publisher charts. For six straight years, the Chinese tech giant has been the No. 1 mobile publisher for consumer spend. Its League of Legends World Championship is among the most-watched esports events in history.

Plus, Tencent has cast a wide net beyond its own walls. The publisher owns 100% of Riot Games and 40% of Fortnite creator Epic Games, as well as minority stakes in other major companies such as France’s Ubisoft, South Korea’s Kakao Games, and Clash Royale’s Finnish creator, Supercell. Through its partnerships with Krafton and Activision Blizzard, Tencent helped to develop mobile versions of PUBG and Call of Duty, respectively.

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