Games Investment Review: Q1 2024

The first quarter of 2024 indicates a return to cautious growth for the video game industry, following nearly a year of market turmoil and layoffs. Total activity across investments and mergers and acquisitions reached $4.3 billion. While this represents a 94% decline in value compared to the previous quarter, the figures are heavily skewed by Microsoft’s $68.7 billion acquisition of Activision Blizzard in late 2023. When that outlier is excluded, Q1 2024 investment and M&A value nearly doubled the previous quarter’s performance.

Investments reached $2.2 billion across 178 deals, marking the first time quarterly investment value exceeded $2.0 billion since mid-2022. This growth was primarily driven by Disney’s $1.5 billion investment in Epic Games, which accounted for 67% of the total investment value for the period. Despite the rise in value, the industry saw a record high of undisclosed deals, with 39% of investments not reporting financial terms. The Tech/Other segment led investment value at 73%, while the Console/PC segment led in deal volume at 32%.

M&A activity totaled $2.0 billion across 41 transactions. The $1.6 billion acquisition of Kahoot! represented 76% of this total. Geographically, Europe dominated the M&A landscape, accounting for 76% of value and 46% of volume. Additionally, new fund announcements remained strong at $13.7 billion across 28 funds, a 36% year-over-year increase in value. This was bolstered by significant raises from Andreessen Horowitz and Y Combinator. Blockchain-related interests also saw a resurgence, with $8.3 billion in new funds showing interest in the sector, largely due to a single $7.0 billion fund from Andreessen Horowitz. Overall, the data suggests a stabilizing market with significant capital still being deployed into established entities and new ventures.