Market intelligence platform InvestGame has shared a new report on deal activity in the games industry for the first half of 2023. Here are the key findings about the turbulent and generally deteriorating landscape.

Games industry saw 324 closed deals worth $4.1 billion in H1 2023, with the M&A landscape down 31 times

  • There were 324 closed deals in the games industry in H1 2023, according to the InvestGame report. This is compared to 463 deals in H1 2022.
  • Their total value was $4.1 billion, down 89.6% from $39.7 billion in the same period last year.

  • The M&A landscape experienced the biggest downfall, with total value down 31x and the number of closed deals nearly halving year-over-year.
  • InvestGame cited two major reasons behind such a decline: 1) strategic investors are currently reviewing their portfolios and diverting some assets; 2) more game companies announce layoffs or business restructuring like Embracer Group.
  • However, analysts expect a large jump in the third quarter due to the recently closed acquisitions of Rovio ($800 million) and Scopely ($4.9 billion). On top of that, the $68.7 billion Activision Blizzard deal might also be approved during that period.

  • Public offerings continue to decline as “private companies choose to postpone listing, while many public comps started buyback programs or became takeover targets.”
  • Overall value of private investments dropped by 5 times year-over-year, with early-stage investments remaining the main contributor.
  • When it comes to deals targeting game publishers or developers, there were 149 transactions (down 14% year-over-year) with a total disclosed value of $1.9 billion (down 93%).

  • Analysts noted the number of VC deals reached 73 in the first half of 2023, compared to 58 in H1 2022. However, their total value declined by 53% due to the lack of large size rounds.
  • “Many VCs have focused on supporting existing studios with follow-on/extension rounds and bridges rather than making sizeable investments into newcomers,” InvestGame explained, adding that despite the headwinds, it expects “early-stage VC activity to pick up through the end of the year.”

  • InvestGame also noted that there was a “modest increase” in investment in AI game companies — 19 deals worth $214.1 million (vs. 14 deals worth $145.8 million in H1 2022).
  • “Unlike the surge seen in blockchain gaming, the number of deals in AI hasn’t exhibited such a prominent growth in comparison to previous years,” analysts said. “Yet, with the substantial increase in allocated funds, we do anticipate a noticeable upswing in deal activity during the latter half of the year.”

  • Andreessen Horowitz (a16z) was the number one VC fund both in terms of the number of deals (8) and total value ($105 million). Other active investors include BITKRAFT Ventures (4 deals, $37 million), Makers Fund (5 deals, $26 million), and Gem Capital (6 deals, $15 million).
  • North America was the number one region by the number of closed early-stage VC deals with 24 (total value of $138.7 million), followed by Western Europe (15 deals, $57.4 million), MENA (15 deals, $26.8 million), and Asia (11 deals, $45.5 million).


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