Image: Supplied The entire presentation was shown off in Microsoft during May last year, and focused on highlighting the economic state of gaming, gaming publishers, the breakup of each platform’s revenue and profit margins. One slide, for instance, compares the profit margins and revenue of different publishers, showing that Paradox Interactive and CD Projekt have vastly lower revenue than Ubisoft or Take Two, but their profit margins are much higher: And when looking at the largest publishers, Microsoft’s evaluation of the industry has Activision in the healthiest spot, followed by EA and Epic Games.
The “adjusted” gaming revenue is Microsoft’s internal methodology for extrapolating how much money Tencent makes from gaming, stripping out the conglomerate’s other income streams from dedicated hardware sales (Tencent has their own gaming console for the Chinese market, for instance) and other business units. Image: Supplied
“Tencent is the largest company in the industry, generating an estimated $US19.4 in revenue and $US6.3 in profit,” the executive summary reads. In Australian dollars, that works out to just over $25 billion. Tencent is already the 7th most valuable company on the planet according to its market capitalisation; it’s valued at almost $US770 billion today, a staggering jump given they were worth only $US7.21 billion in 2011. But according to Microsoft, Tencent’s reach is already international enough. In one of the internal documents unveiled in the Apple/Epic lawsuit, Microsoft noted that Tencent generated more revenue from its gaming division than Nintendo, EA and Activision/Blizzard combined.
The whole document is a fascinating read. It gives the kind of perspective you’d expect from a major platform holder, but the extra detail and insight into the smaller publishers on different slides is interesting. There’s a ton of redactions, sadly, but the whole presentation is vastly more readable than, say, Nintendo’s partner contracts.
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