The traditional gaming industry is seeing a significant shift toward digital gaming. Gaming companies’ digital revenues have been increasing significantly over the last few quarters. That has positively impacted their profit margins and bottom lines. Activision’s (ATVI) digital revenue in 2Q17 rose to $1.3 billion from $1.1 billion in 2Q16. However digital revenue accounted for 80.0% of total revenue in fiscal 2Q17 compared to 73.0% in 2Q16.
Electronic Arts’ (EA) digital revenue rose 28.0% YoY (year-over-year) in fiscal 1Q18 to $681.0 million from $568.0 million in fiscal 1Q17. EA’s digital revenue now accounts for 63.0% of total revenues in fiscal 1Q18 compared to 56.0% in fiscal 1Q17.
Take-Two Interactive’s (TTWO) revenue in fiscal 1Q18 rose 34.0% YoY to $418.2 million from $311.6 million in fiscal 1Q17. Its digital revenue rose 56.0% YoY to $368.2 million. TTWO stated that recurring revenue from micro transactions, virtual currency, and downloadable add-on content rose 72.0% YoY and accounted for 63.0% of total digital revenues and 41.0% of total revenues.
The company also acquired Social Point in early 2017 to gain traction in the mobile gaming market.
While Zynga (ZNGA) is primarily an Internet gaming company and 100% of its revenue is digital, it has seen a YoY growth in mobile gaming. Its mobile revenue rose 30.0% YoY in 2Q17 to $179.9 million and now accounts for 86.0% of total revenue.
Downloadable content and mobile drove digital revenue for GameStop (GME) in 2Q17. Its digital sales rose 28.1% YoY to $46.5 million in 2Q17.