How Games Companies are making their money

Games Overtake Music Sales For Subs-Happy Vivendi

French media conglomerate Vivendi (EPA: VIV) saw Q1 revenue up six percent to €6.9 billion compared with last year - and it’s easy to see why.

Vivendi told analysts last month it’s putting a “growing focus on subscriptions”, which have grown to comprise more than three quarters of the group’s income. That’s exactly what latest earnings show, as EBITA rose 14.7 percent to €1.6 billion…

—Activision-Blizzard: Sales “significantly better than expected” - up 29.3 percent to €945 million - thanks to still-rocketing Call Of Duty: Modern Warfare 2 and World Of Warcraft income. Downloadable content for the CoD title broke Xbox Live records and WoW has over 11.5 million paying monthly subs.

—Universal Music Group: A different story - sales down 13.4 percent to €899 million on fewer big releases in Europe and Asia plus declining CD sales (poor excuse - UMG houses big-name Lady Gaga and Black Eyed Peas). Like WMG, digital income is growing everywhere except North America, but, across the company, even fell 1.7 percent on diminishing ringtone sales.

—SFR: Vivendi’s biggest earner, the French telco’s revenue grew 1.9 percent to €3.08 billion, even after the impact of European Commission-imposed wholesale price cuts that has affected other operators. Broadband internet revenue up five percent.

—Canal+: The French pay-TV broadcaster sees revenues up 2.3 percent to €1.45 billion after adding a net 315,000 subscribers and slightly reducing digital channels customer churn.

Vivendi says it received a €122 million dividend for its NBC Universal (NYSE: GE) JV equity holding during the quarter, but the income it takes from the JV slimmed from €26 million to €15 million during this quarter.