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Early-stage funding from VCs reached a 12-month high in Q2 2024, but despite this, the industry remained in an investment slump, as reported by Konvoy Ventures.
With $492 million invested by VCs last quarter, mostly in early-stage companies, the figure was lower than the $601 million in Q1 2024 and $529 million in Q2 2023. This marked the lowest level of VC investment in games since Q4 2023 ($332 million) and even earlier in Q2 2020 ($418 million).
Konvoy Ventures reported that over 90% of the funding has been directed towards early-stage deals since Q4 2022, highlighting the significant lack of growth and late-stage funding in the gaming industry.
With overall private games funding at $690 million in Q2, a significant decrease from $2.2 billion in Q1 and $599 million in Q2 2023, it is important to note that the high figures in Q1 were heavily influenced by Disney’s $1.5 billion investment in Epic Games, the developers of Fortnite.
Declining deals
The decline in gaming VC deals was evident in Q2, with 104 deals recorded, marking a 22% decrease from the previous quarter and a 12% drop compared to Q2 2023.
Konvoy Ventures revealed that 22% of VC deals made up 80% of disclosed funding, suggesting a more evenly distributed and healthier investment landscape.
The majority of venture deals in Q2 originated from Asia (39), followed by North America (33) and Europe (29). In terms of funding, Asia led with $283 million, compared to $128 million in North America and $78 million in Europe.
While Asia reached a 12-month high in funding, North America experienced a 61% decline in VC investment from the previous quarter.
