The toy industry is on fire this year. Thanks to COVID-19 keeping more people inside, market analyst firm Newzoo predicts the global gaming industry will grow by almost 20% this year.
This should benefit all gambling companies, including those that may not come to mind immediately as gaming providers. Three such companies are worth a look Tencent Holdings (OTC: TCEHY), Sony (NYSE: SNE), and Microsoft (NASDAQ: MSFT).
The Chinese company Tencent does not enjoy as much name recognition in the United States as it does in China. However, this conglomerate has grown into a market cap of more than $ 700 billion.
In China, Tencent is well known not only for games but also for social media, fintech, e-commerce and other products. It bills itself as the “world’s first game development, publishing and operating platform.” The company currently offers more than 140 licensed games. In June, it introduced more than 40 new games and updates.
One of the more notable game-related acquisitions is the developer ownership stake in Epic Games Fortnite, which attracts about 350 million players to follow.
The game accounts for about one-third of the company’s total revenue. In the last quarter, gaming revenue rose 45% from a year ago to 41.4 billion yuan ($ 6.3 billion). This is well above the company’s 29% growth. Earnings held by shareholders increased 89% during the period to 38.5 billion yuan ($ 5.9 billion).
Tencent’s game growth may slow if the world gets over the epidemic. However, analysts forecast a 32% profit growth in 2021. More importantly, Tencent is a massive media company, and the game is one of the many drivers of growth. As consumers in China and the rest of the world turn to Tencent for games and other forms of entertainment, the stock must continue to move higher.
This entertainment electronics giant has been a success with a wide variety of products over the decades. The recent release of the Sony PlayStation 5 (PS5) will rekindle interest in Sony as gamers take over the new system. This is the first new console since the previous generation machine, the PlayStation 4, was released in 2013.
The PS5 brings faster load times than the previous model. It also includes features like ray tracing, which improves graphics; and compatibility with 8K displays; and play games designed for PlayStation 4.
Preliminary sales figures from Japan show that the PS5 sold about 120,000 units in its first four days, nearly six times as many as the Xbox X and X-Series S sold by Microsoft in the first six days. and do not take into account the holiday shopping season.
The gaming and network services division accounted for barely a quarter of Sony’s quarterly revenue, generating 507 billion yen ($ 4.9 billion). However, this accounted for about one-third of operating income during this period.
Revenue from gaming and network services grew more than 11% during the quarter, even as total revenue fell. This increased the division’s operating revenues by 65%, compared to 7% for the company.
Upcoming games such as Gran Turismo 7 and Marvel Spider-Man: Miles Morales is likely to help increase your game profile.
Some of Sony’s other businesses have suffered amid the pandemic, but once the company has crossed COVID-19, the PlayStation 5 could breathe new life into the company.
Given Microsoft’s success in cloud computing, the company’s gaming segment is often forgotten. Nonetheless, the Xbox served as a growth area within the company’s “more personal computing” division.
Microsoft launched its next-generation Xbox, the Series S / X, earlier this month. Like Sony, this happens seven years after the company released its last-generation console, the Xbox One.
The smaller but less powerful S-Series brings an enhanced CPU and GPU. It also offers higher resolution and beam tracking than the Xbox One. The more advanced X-Series features an enhanced GPU and more RAM than its S-Series counterpart. Like the PS5, it is also compatible with 8K displays.
New consoles may also generate more interest in Microsoft games. Driven by franchises such as The age of empires and Minecraft, The Microsoft game library has significant followers. Players can access this directory using Game Pass, which makes their games available to Xbox and PC gamers through a subscription service. By the end of fiscal 2020 (June), the Xbox Game Pass had attracted more than 15 million subscribers and nearly 100 million Xbox Live players.
Amid the pandemic, the Xbox has achieved tremendous growth. Revenue rose 30% in the most recent quarter as residents sought more indoor entertainment. Now, with the release of Series X, the game can continue to experience significant growth.
Admittedly, the earliest Xbox sales numbers aren’t very high, and Microsoft’s cloud-based products are likely to continue to have a bigger impact on results. Nevertheless, with the success of the Xbox Game Pass, the game can still give further impetus to Microsoft.