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Game industry mergers and acquisitions totaled $11.8 billion in 2023, marking a significant decline from the record-breaking $106.4 billion in 2022. Key acquisitions in 2022 included Microsoft’s purchase of Activision Blizzard and other major deals across the industry.
The deal count dropped by 43% in 2023 compared to the previous year, with a noticeable decrease in transaction value. Analysts from various firms like Drake Star Partners and InvestGame have also published their findings on the 2023 market performance, describing it as a weak year for deals overall.
Notable acquisitions in 2023 included Savvy Gaming Group’s purchase of Scopely for $4.9 billion, Goldman Sachs’ acquisition of Kahoot for $1.7 billion, and Tencent’s purchase of Techland for $1.6 billion, among others.
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Regarding venture investments in the gaming industry, 2023 saw over 1,004 investments totaling $8.5 billion, with a slight decrease in deal count and transaction value compared to 2022. Notable investments included VSPO’s $265 million for its esports business and Candivore’s $100 million for Marvel Snap maker Second Dinner.
Web3 investments declined significantly in 2023, with 276 companies raising $1.2 billion. Esports investments also saw a decrease in transactions and value, signaling potential consolidation in the market.
Venture investments
Key franchises in the gaming industry leaned towards established names in 2023, while indie studios found success with original titles like Lethal Company, Palworld, and Helldivers 2. The rise of AI in gaming is expected to continue, with generative AI enhancing development efficiency and player experiences.
Rise of AI
Public markets in gaming showed signs of recovery in 2023, with revenue and earnings multiples increasing. The market outlook for 2024 remains positive, with potential IPOs and market improvements anticipated.
Public markets recover
Low prices in the gaming market are expected to drive more M&A activity, as valuations have stabilized at a fair level. Companies with strong growth potential or unique IP are likely to attract buyers looking for opportunities at reasonable prices.
Low prices will lead to more deals
App Store alternatives and new regulations in the EU are set to create more opportunities for game developers to bypass platform fees and enhance their profits. Netflix and Apple Arcade also offer alternative distribution channels for developers focusing on innovation and player engagement.
App Store alternatives
Developers are expected to explore more user-generated content (UGC) deals in platforms like Roblox and Fortnite, where significant revenues are being generated for developers. Transactions in UGC ecosystems are likely to increase as developers seek access to a broader player base and new revenue streams.
More UGC deals
