Online Games Compete with Consoles

Game playing on smartphones is creating intense competition to dedicated game consoles. The incredibly popular iPhone and Android-based phones are fueling the market. Many of the most popular apps downloaded for use on smartphones are games. Typically, mobile video games are introduced as “freemium” titles which are free of charge to users but are supported by virtual goods sales relating to the games.

On the console game front, Microsoft’s acquisitions of ZeniMax Media, the parent company of Doom and Fallout game studio Bethesda Softworks for $7.5 billion and game maker Activision Blizzard for nearly $75 billion transformed the industry to a service-based, “Netflix for games” model. These acquisitions were so large, and Microsoft’s financial and technical prowess is so great, that it altered the marketplace to some extent. Instead of individual game sales, Xbox Game Pass generates almost $5 billion each year in recurring revenue. Meanwhile, Amazon has its own videogame development division, and also offers Open 3D Engine (O3DE), a set of tools that outside developers can use to build games for its Amazon Web Services platform.

Cloud-based gaming is soaring in popularity thanks to the wide adoption of high-speed internet. Whether advertising-supported or subscription-based, cloud gaming enables users to stream an immense variety of the latest, most popular games.

Apple, Inc. offers its gaming subscription service called Arcade. For a few dollars per month, users have access to a wide variety of exclusive, streamed games. Google offers a video game and app subscription service called Play Pass with hundreds of games and apps.

One of the top game manufacturers, Electronic Arts (EA), is being acquired by a consortium led by Saudi Arabia’s Public Investment Fund, Silver Lake Partners and Affinity Partners for $55 billion. The deal is expected to close in June 2026. The new owners are expected to shift EA to private ownership. EA’s focus is on integrating AI into its games and it has invested in and partnered with Stability AI for future development. French game developer Ubisoft offers the Uplay+ game streaming service for Windows PCs. Facebook offers streaming games on its Facebook Gaming platform free of charge to players. Titles include Words with Friends, PUBG Mobile and Mobile Legends.

The Chinese government has been cracking down on gaming. Gamers in China were spending significantly more hours per week playing video games than players in other countries. China’s President Xi Jinping has established new rules limiting technology companies’ activities which will likely impact gaming companies to a major extent.

SPOTLIGHT: Fortnite

Fortnite: Battle Royale is a free-to-play multi-player game from Epic Games, Inc. It is played on game consoles, PCs, tablets and smartphones and is easy to learn but hard to master, requiring extended play to regularly win. Fortnite had 650 million registered players as of late 2025 and had generated revenue of over $40 billion. Originally made up of teenage gamers to a large extent, the audience today has evolved to include a much wider demographic. The game is elevating online gaming and eSports into mainstream entertainment.

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