Games Industry Finance Cheat Sheet: Summer 2024, 15/08/2024
All the video game financials in one place AND a new games AI conference? woah
Sony, Microsoft and Nintendo all struggling to shift consoles in latest financials
Newzoo games market stats puts industry valuation north of $187bn
Madden barges its way to the top of a quiet week of video game releases
Good morning VGIM-ers,
“I need to speak to George Osborn.”
It’s a sentence I’ve heard in my life on a fair few occasions. Mostly from cold callers. Sometimes from journalists or TV producers. Once from a pair of detectives working on behalf of Cambridgeshire Police.
It also happens to be pretty much word-for-word what Dr Tommy Thompson, creator of AI and Games, said to a couple of contacts at GDC in San Francisco earlier this year when discussing the idea of hosting a video game AI conference in Europe.
On the face of it, Tommy and his merry little band of video game AI experts had most of the ingredients to put on a great conference.
They knew that there was a gap in the market - and the calendar - for a dedicated game AI event in Europe. Their knowledge of game AI, the people who make the sector tick and what the community needs is frankly astounding (and much needed in a hype filled landscape). And with Tommy sitting on the biggest YouTube channel, Substack newsletter and podcast about video game AI around, they had the best possible route to get that community to come together.
But what they needed was a business who could take their vision and bosh together the practicalities - including tweaking its positioning, putting together a budget and making a sponsorship deck sing - to transform a fantastic idea into a tangible event.
Tommy turned to me, via Half-Space Consulting, to do this. And that’s why we’re delighted to say that we are one of the organisational partners of the first ever AI and Games Conference, which was announced to the world yesterday.
On Friday 8th November at Goldsmiths University, 200 game AI experts will come together to hear from leading industry speakers across two stacked conference tracks, meet one another across a number of networking and refreshment breaks and leave with a deep understanding of how AI is practically used within the video games industry.
Attendees will learn from the brightest minds in the business about the use of artificial intelligence in gameplay (e.g. how non-player characters work) and within game production (e.g. its use within game engines and toolsets). Each talk will be vetted for quality and every speaker will be supported through mentoring from a member of the event’s advisory board to ensure excellence across the day.
And crucially, the conference is being run through a not-for-profit organisation to ensure that it serves the needs of the game AI community both now and in the long term - safeguarding the conference’s mission and future in the process.
Already, the AI and Games Conference has caught the imagination of the community.
On the sponsorship front, AWS, Creative Assembly and Riot Games have already stepped up to snap up all our partner sponsorships to participate in the agenda. BitPart.AI has become the first sponsor to support the event’s production by funding our lanyard sponsorship.
And as for the speakers, the conference already has nearly a dozen experts from the likes of Sony AI, Electronic Arts and Hawkswell coming along to share their expertise - making this an event you won’t want to miss.
So, do you want to join the conference? Of course you do. And fortunately, there are three great ways to do so:
Sponsor the event. I am handling sponsorship sales for the conference. If you’d like to talk about remaining opportunities to sponsor the event - such as signing up as our headline sponsor, supporting our refreshment breaks or subsidising passes for a select band of students and indie developers - email me on george@half-space.consulting to find out more.
Submit a speaking session. You can submit a session to speak at the conference over on the AI and Games Conference website until Friday 6th September. Pop your talk idea in for consideration here.
Buy a ticket. Finally, there are passes for the event available for students/indies, games AI industry professionals and wider professionals working in games. Early bird prices for each ticket are £40, £99 and £200 respectively until Friday 13th September. Buy your ticket here.
And of course, VGIM Insiders can claim a further 10% discount on tickets purchased for the conference as a thank you for supporting this publication.
I’ll share the ticket code via The Debrief later in the month, but you can email me now if you’d like to grab it early.
Anyway, speaking of numbers - let’s take a look at some industry financials shall we?
The big read - Video Games Finance Cheat Sheet: Summer 2024
It’s been a while but it is time for the latest entry in the well-received VGIM Video Games Finance Cheat Sheet.
For those of you who’ve never read one before, the purpose of this newsletter is dead simple.
I flip through the financial results of the biggest games companies in the world. I give you a summary of how they’ve done. And you walk away with knowledge and numbers aplenty to steal for your powerpoint decks, you cheeky little devils.
Before we get going, here’s a quick reminder of both a couple of house rules and a handful of points on terminology.
All results are cited in dollars, with any figures recorded in other currencies converted and included next to the headline total.
All results reference the company’s relevant reporting quarter so you know how each business is viewing its financial year.
Companies use the term ‘Bookings’ to report digital game revenues because it allows spend to be recorded even if the consumer uses a purchase in another reporting period (e.g. a player buys an in-game currency bundle in one quarter but uses it all up in the next quarter). It isn’t quite the same as revenue though, - which captures wider relevant income too - so don’t treat the terms interchangeably.
Finally, games consoles that are reported as ‘sold’ are in the hands of consumers. But if devices are reported as ‘shipped’ this may mean they’re still sitting on shop shelves somewhere, so don’t use that term to imply how many of those devices are actually out there in the wild.
All good? Let’s get on with the numbers then.
Take-Two - Grand Theft Automatically stealing the headlines
Take-Two’s Q4 2024 results were much of a muchness as the company continues to drum its fingers until Grand Theft Auto VI launches.
The company’s net bookings for the quarter dropped slightly from $1.39bn last year to $1.35bn this year, with a 2% drop in recurrent consumer spending across its portfolio of titles responsible for the downward trend.
However, the company did report that a number of its franchises performed better than expected. This included basketball sim NBA2K, Rockstar’s Red Dead Redemption and Zynga’s mobile titles Toon Blast and Match Factory.
And with Grand Theft Auto V and Grand Theft Auto Online also in the list of high performing titles still - more than a decade since they first launched - Take-Two’s decision to peg the release of GTA VI to Fall of Calendar Year 2025 proved to be more newsworthy than humdrum headline numbers.
Microsoft - Console Sores
Microsoft’s latest financial results confirm that its focus for Xbox continues to shift away from selling hardware to building a content platform.
Its results for Q4 2024 saw a 61% increase in its content and services revenue and a 44% bump in its gaming revenue as a result of it swallowing up Activision Blizzard King.
However, the company’s hardware revenue - i.e. the cash it makes from flogging its consoles - dropped by 42% compared to this time last year as we reach the moribund middle of the latest generation.
That number will likely tick up a little bit when the company pops out a few lovely new consoles in the year ahead.
But with Xbox’s Summer Game Fest line-up being dominated by major game releases and the cost of a Game Pass subscription jumping across the world, Microsoft’s games strategy continues to rest on it becoming the Netflix for games before, well, Netflix does.
Sony - Not So Famous (PS)5
Declining hardware sales is a feature, rather than a bug, of the industry’s latest financial results, with Sony reporting a sharp year-on-year downturn in revenues from game hardware.
Its hardware revenue figure tumbled by 21% to $989.2m dollars (146 billion yen) in the first quarter of its 2025 financial year, in large part as a result of PS5 sales dropping from 3.3m in Q1 2024 to 2.4m in Q1 2025.
Like Microsoft though, Sony’s overall performance was buoyed by game sales. Software sales grew by 20% to reach $3.29bn (486bn yen) for the quarter, with a 37% increase in the sale of video game downloadable content likely a result of the launch of Elden Ring’s Shadow of the Erdtree update.
This will likely continue to nudge Sony down a similar route to Microsoft, encouraging it to sell digital content across more platforms - such as PC - to account for a slightly less certain future for its console business.
Nintendo - Mamma Mia!
Nintendo had a quarter to forget, with its results for Q1 2025 disappointing both the company and market analysts.
The company’s net sales for the quarter dropped by 46.5% year-on-year to $1.67bn (246.6bn yen). This saw Nintendo’s operating profit down by 70.6% compared to this time last year to $369.5m (54.5bn yen) with its net profit slumping by over half to $545.2bn (80.9bn yen).
And unlike Microsoft and Sony, Nintendo was affected by a downturn in both its hardware and software business.
On the console side, Switch sales dropped by 46% year-on-year to reach 2.1m devices for the quarter - putting the company on course to miss its target for the financial year of 13m units.
And on the software side, the absence of a system seller like last year’s The Legend of Zelda: Tears of the Kingdom in this quarter pushed down the company’s software revenues significantly - making the arrival of a Switch successor all too important for the company’s prospects.
Roblox - Profit is for wimps
Roblox delivered another set of dichotomous financial results that saw its overall growth balanced out by an ongoing failure to reach profitability.
The company saw its revenue grow by 31% to reach $895.3m for the second quarter of its 2024 financial year, with bookings up to $955.2m. Its daily active users on the platform also grew by 21% to 79.5m.
Yet despite all these positives, the platform still racked up a net loss attributable to common stockholders of $205.9 million, bumping up to a consolidated net loss of $207.2 million.
And while its CFO talked an excellent game on the company’s impressively bumped up cash flow, Roblox still has a lot of work to do to turn its country sized user base into a profitable business.
Tencent: Game back on
Tencent recorded a strong Q2 2024, with its all-important video games business prominently contributing to its overall success last quarter.
The Chinese giant saw revenues grow year-on-year by 8% to reach $22.6bn (161.1bn RMB), with its gross profit up by an impressive 21% over the same period to $12.6bn (85.9bn RMB).
Within its domestic games business, the company cited the strong performance of existing titles such as Honor of Kings, PeaceKeeper Elite and Naruto Mobile as key to its growth. It also highlighted the launch of DnF Mobile this quarter as an important new pillar to its evergreen content release.
Additionally, Tencent also highlighted that its international games business delivered too. In particular, Supercell’s Brawl Stars was singled out for special mention after it grew receipts tenfold year-on-year - showing the value of games to what Ma Huateng, the company’s chairman, describes as its “platform plus content strategy.”
Best of the rest
Electronic Arts recorded $1.26bn of net bookings for the first quarter of its new financial year, down from $1.58bn last year. But the company remains bullish given the ongoing strong performance of games like EA Sports FC and the lack of a major single player release in the period.
Ubisoft had a tidy first quarter too, growing its sales 12% year-on-year to rack up a tidy $353.57m (€323.5m). Its performance was boosted by ongoing strong performance of service games like Rainbow: Six Siege and The Crew Motorfest, but also due to strong pre-orders for Assassin’s Creed: Shadows - bucking the perception that the fanbase has proven hostile to it.
And finally, Bandai Namco - the publisher of Elden Ring - saw its profits for Q1 2025 rise by 56% to $233m (34 billion yen) as the game’s DLC landed across platforms at the tail end of June. Praise be to Hidetaka Miyazaki.
The Bluffer’s Guide To The Latest Financial Results
Do say: The beginning of the end of our current console generation and the industry’s long wait for big hitting releases in 2025 has seen the market sag, with companies fighting a short term rearguard action until major releases arrive.
Don’t say: so is there more big name DLC coming to save us all or…?
News in brief
Growing global: The global games market will generate $187.7bn from a market of 3.42bn according to Newzoo’s annual state of the market report. I’ll be exploring the findings in more detail at a media event at gamescom next Wednesday, but the main thing to note is that the games market has - just about - maintained its growth trajectory in a tough year for the sector.
It takes two to Tango (gameworks): Rejoice! Tango Gameworks, the studio behind the well reviewed Hi-Fi Rush, has been saved from oblivion by Krafton. Despite Microsoft somewhat rudely shutting the company down earlier this year, the two companies have since agreed a deal that will see Tango revived and give its staff a chance to get their jobs back.
Epic Pains: Tim Sweeney, head honcho at Epic Games, has once again criticised Apple for its approach to complying with the Digital Markets Act. Sweeney accused the company of ‘malicious compliance’ after it announced that developers who link out of the App Store to other websites that serve as store fronts would be subject to two fees - an ‘Initial Acquisition Fee’ and a “Store Services Fee” - that could see Apple take between 15-25% of revenue from any such purchases. Spotify is also miffed about it too.
Unlocking the Keywords: Keywords Studios has returned to acquisition form, snapping up Liverpool based porting specialists Wushu Studios for an undisclosed sum. The Irish video game service providing superpower had paused its acquisition spree while it was bought by private equity firm EQT, but it has now resumed its voracious acquisition of games businesses in the manner of a teenager going head-to-head with the Pizza Hut buffet.
Media matters: And finally, some utterly shameless self-promotion. I was invited onto the Indie Game Movement podcast to talk about how to build your media strategy to get your games business to stand out with Andrew Pappas. As well as talking about the importance of thinking of the value of media relations in terms of influence, rather than just as a way to Sell Stuff, I also engaged in some Very British small talk about the weather too. Nice.
Moving on
Supercell has appointed Gerard Griffin as its new CFO…Jeonghee Jin has left Pearl Abyss to become the new CEO of NC America at NCSoft…Neil Boyd has shifted his role to become Director, European Intellectual Property and Intellectual Property Enforcement over at Nintendo…Tara Brannigan has been hired as Director of Player Experience at Stoic…And Sol Argueso has started a new position as Interim Recruitment Manager at Third Kind Games…
Jobs ahoy
If you fancy a stint in Dublin and have a background in video production, Riot Games is hiring for a Senior Travel Broadcast Engineer for its esports ambitions…Or if you fancy a video based job in London, why not apply to become the Community and Marketing Video Producer for Amazon Games…TikTok wants to recruit a Brand Partnerships Manager - Global Gaming EMEA, Key Accounts based in London…If you want to make a movie better than the Borderland film was, consider becoming the Director Research, Strategy & Analysis (Video Games & Action) for Sony Pictures Entertainment…And why not get in on the ground floor of GTA VI by nabbing a role as an Advertising Planning Manager for Rockstar Games…
Events and conferences
Gamescom, Cologne - 21st-25th August
PAX West, Seattle - 30th August-2nd September
Tokyo Game Show, Tokyo - 26th-29th September
GCAP, Melbourne -7th-9th October
AI and Games Conference, London - 8th November
Games of the week
Madden NFL 25 - EA’s American Football money maker returns for people who like things such as touchdowns and egregious physical violence.
Sam and Max: The Devil’s Playhouse - Everyone’s favourite dog and psychotic bunny rabbit detective duo return in a remaster of one of their TellTale adventures.
Dredge: The Iron Rig - Critically acclaimed creepy fish ‘em up Dredge gets its latest slice of downloadable content.
Before you go…
I went to see Stevenage FC vs Shrewsbury Town last Saturday to learn more about Xsolla’s decision to sponsor the Hertfordshire based League One football team.
As well as learning the rationale behind the tie-up - big new American TV deal for English Football League rights plus eyeballs on EA Sport FC = great way to reach consumer - I also got to enjoy a tasty buffet lunch and an even tastier finish by Stevenage left winger Elliot List that saw the hosts to a valuable 1-0 win.
I told you that drifting into the half-spaces was important…