Updated Mar 17, 2026 by Drake Star Partners
The Drake Star Gaming Index rose 12% in Q1 2023, signaling a robust public market recovery despite a temporary dip in M&A volume to 43 deals.
Private financing remained resilient with over 200 deals raising $1.3 billion, driven primarily by early-stage investments and a strategic pivot away from blockchain toward AI and gaming tools.
Embracer Group remained the most active consolidator, completing 18 deals totaling over $1.1 billion during the quarter.
Valuation disparities are significant, with Japan and Korea-based developers commanding median EV/EBITDA multiples of 9.2x, compared to 5.7x for Western PC and console firms.
Major capital injections included Savvy Gaming Group’s $265 million investment in VSPO and Believer’s $55 million raise for open-world development.
The industry faces financial complexity with only 1% median revenue growth for hardware and platforms, alongside negative average profit margins across several segments.
Industry outlook suggests a significant M&A rebound in the second half of 2023, supported by substantial capital reserves from sovereign wealth funds.
The Drake Star Gaming Index rose 12% in Q1 2023, signaling a robust public market recovery despite a temporary dip in M&A volume to 43 deals.
Private financing remained resilient with over 200 deals raising $1.3 billion, driven primarily by early-stage investments and a strategic pivot away from blockchain toward AI and gaming tools.
Embracer Group remained the most active consolidator, completing 18 deals totaling over $1.1 billion during the quarter.
Valuation disparities are significant, with Japan and Korea-based developers commanding median EV/EBITDA multiples of 9.2x, compared to 5.7x for Western PC and console firms.
Major capital injections included Savvy Gaming Group’s $265 million investment in VSPO and Believer’s $55 million raise for open-world development.
The industry faces financial complexity with only 1% median revenue growth for hardware and platforms, alongside negative average profit margins across several segments.
Industry outlook suggests a significant M&A rebound in the second half of 2023, supported by substantial capital reserves from sovereign wealth funds.