Software Top 100 Update: negative revenue trend
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Revenue Trend in the Software Top 10
Rank Company Q3 Trend
1 Microsoft -14%
2 IBM -7%
3 Oracle -5%
4 SAP -9%
5 Nintendo -34%
6 HP -8%
7 Symantec -3%
8 Activision Blizzard +4%
9 Electronic Arts -12%
10 CA -3%

Although the software industry wrote very positive figures in 2008, as if there were no economic crisis, the current trend is clearly downward. The hundred largest software companies that saw revenues increase 18% on average in 2008, faced a decline of 4% this quarter.

Revenue trend for the leading software companies
Among the Top 10 biggest software companies, the average revenue decline was 9%; big companies were hit harder than medium-sized software companies. Revenues of game maker Activision Blizzard increased 4% year-on-year in Q3, the only company to grow in the Top 10. Nintendo, another Top 10 software company, and maker of games, took a big step back: after phenomenal results in 2008, the popularity and of the Wii diminished this year, which resulted in a 34% revenue fall in the last 6 months. Enterprise software company SAP reported much lower software revenues, in line with others, but the decline in software was offset by increased services revenues.

Gaming is volatile business
Most gaming companies in the Top 100 reported double-digit declines: especially THQ (-39%), Ubisoft (down over 50%) and Take-Two Interactive (down two-thirds) are facing tough times. There were however some positive exceptions: Activision Blizzard (+4%), Capcom (+24.5%) and Square Enix (+33% partially due to the acquisition of Eidos). It can be concluded that the release cycle of a small number of blockbuster game titles makes revenues of gaming companies volatile from year to year.

The fastest growing company of Q3 2009
Autonomy was the fastest growing company last quarter, revenues were up 51% compared to Q3 2008. As if nothing happened in the past twelve months, the UK software maker grew at a higher rate than it did in 2008 (46%). The company ranks 78 in the 2009 Edition of the Software Top 100, up from 99th position in 2008.

Forecast
Although the fourth quarter is traditionally the best part of the year for most software companies, an increase compared to the last quarter of 2008 is uncertain, given the Q3 declines across the ranks.
 

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