- There were 52 announced M&A deals in Q2 with a total disclosed deal value of $3.5 billion
- The largest gaming deal of the year so far was EQT’s acquisition of Keywords for $2.8 billion
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The trend of increasing Gaming M&A activity continued for the third consecutive quarter, with private equity firms making two of the largest acquisitions.
This positive news is highlighted in the Drake Star Global Gaming Report Q2 2024. Quarter two witnessed a significant rise in public equity and debt deals. Additionally, blockchain gaming saw a surge with 40% of all private company financings in the sector.
The industry is bouncing back
The report by Drake Star reveals 52 announced M&A deals in Q2 with a total disclosed deal value of $3.5 billion. These figures mark the third consecutive quarter of increasing deal activity after hitting a low point in Q3 2023 with only 33 deals completed.
Notable recent M&A deals include EQT’s acquisition of Keywords for $2.8 billion, the largest gaming deal of the year so far. Other significant buyers include Infinite Reality, Miniclip / Tencent, Nintendo, and Tripledot.
The report indicates that private financings are stabilizing, with 180 deals in Q2 2024 compared to 191 deals in Q1.
Focus on blockchain gaming
The majority of capital investment in Q2 went into blockchain gaming companies and services, comprising 40% of the total deals and 44% of disclosed deal value. Companies like Zentry, Spyke, and k-ID secured significant investments within the quarter.
M&A activity is expected to remain strong in 2025, driven by the broader recovery of the public gaming company market.
The report also highlights that most investment dollars are directed towards early-stage companies, with Asia leading in the number of largest financings, followed by Europe/UK, Turkey, and the U.S.
Furthermore, the report notes that very little VC funding went to gaming studios, with Bitkraft being the most active VC followed by a16z, Play Ventures, and vgames.
While Konami, Logitech, and Krafton emerged as the top performers, the overall market of gaming stocks is yet to recover fully. However, leading indie and AA game developers and publishers have witnessed a significant rebound this year.
Several gaming companies, including Embracer, Gamestop, Take Two, and MTG, have made significant announcements and raised substantial funds in equity and debt.
Future predictions for 2024
Based on the latest figures, Drake Star predicts that M&A activity will continue to strengthen in the remaining months of 2024 and into 2025, backed by the broader recovery of the public gaming market.
The report anticipates more mid to small sized deals, with private equity firms expected to lead in acquisitions and ‘take-private deals’. Due to limited financing options, some gaming companies may opt for earlier exits, potentially diversifying into adjacent segments by acquiring mobile app companies.
The report also identifies AI, mixed reality, platform, and tools as hot segments for future growth. Finally, there is anticipation of more upcoming IPO activity, with companies like Appsflyer, Discord, and EPIC planning for listings in the coming quarter.
