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Tencent (TCEHY) Leads Mobile Game Space in August, US #1 Market

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Tencent’s (TCEHY - Free Report) PUBG Mobile maintained its position as the top grossing mobile game for the consecutive second month. Per Sensor Tower’s latest report, players spent roughly $270 million on the game in August 2021, up 4.7% year over year.

In terms of revenues generated, the United States maintained its #1 position, with revenues of $2.1 billion that reflects 28% of the total player spending worldwide. Japan trailed the United States with 20.8%, followed by China at 17.5%.

China, where PUBG Mobile is known as Game For Peace, accounted for 61.4% of the game’s revenues. The game generated 9% and 6.5% revenues from the United States and Turkey, respectively.

Tencent’s Honor of Kings grabbed the second spot. It was trailed by Genshin Impact from miHoYo, followed by Fate/Grand Order from Sony’s (SONY - Free Report) Aniplex and Pokémon GO from Niantic.

Tencent’s shares have declined 9.4% year to date, while Sony has gained 6.7%. While Tencent currently has a Zacks Rank #5 (Strong Sell), Sony has a Zacks Rank #3 (Hold).

Mobile Game Spending to Rise Strongly

Player spending on mobile games has skyrocketed due to the pandemic-led spike in demand. Per App Annie estimates, mobile gaming is expected to witness $120 billion in consumer spending, which will be three times more than consoles.

Notably, in the first half of 2021, consumers spent $1.7 billion on both iOS and Google Play purchases per week on mobile games globally, up 40% from the pre-pandemic levels.

Mobile games are benefiting from the availability of high-performance processors that offer quality graphics, thereby improving consumer experience. This is expected to benefit mobile game developers like Tencent, Sony, Electronic Arts (EA - Free Report) and Activision Blizzard .

The mobile gaming space is expected to face stiff competition with the entrance of Netflix (NFLX - Free Report) . The company’s partnership with Shonda Rhimes includes feature films and gaming and has also hired former EA and Oculus executive Mike Verdu to lead its gaming initiative.

Currently, EA, Activision Blizzard and Netflix carry Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Moreover, video game spending is expected to remain robust buoyed by strong demand. According to The NPD Group report, consumers spent a whopping $4.6 billion on gaming in July, up 10% on a year-over-year basis, which marked the best July since 2008 in terms of sales. This is expected to benefit video game developers for the rest of 2021.

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