Report

Gaming Industry Report: Q3 2024

1 October 202436 pages4,739 words

Summary

• 2024 market size: $188bn (+2.1% YoY) Total gamers in 2024 by region (millions): • Public markets: leading public gaming ETFs up 22- • 36% YTD (vs S&P 500 = 21%) Middle East & Africa Venture funding in Q3‘ 24: $517m across 92 deals 559 (funding +1% QoQ, number of deals -14% QoQ) (16%) • Epic sidesteps Apple in the EU, sues Google Europe (454 3,422m • Discord launches Activities ...

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Gaming Industry Report: Q2 2024

**Gaming Industry Report – Q2 2024 – Executive Summary** --- ### 1. Market Overview & Public‑Equity Performance | Metric | Q2 2024 | YoY / QoQ Change | |--------|---------|-----------------| | **Global gaming market size** | **$189.3 b** | **+2.9 % YoY** | | **Public gaming ETFs vs. S&P 500** | ETFs up **7‑20 % YTD** | S&P 500 up **15.1 % YTD** | | **Key takeaway** | The sector continues to expand modestly, out‑performing many traditional equities, but the outperformance gap varies widely across individual ETFs. | --- ### 2. Venture‑Capital Activity | Aspect | Q2 2024 | Trend | |--------|---------|-------| | **Total VC funding** | **$492 m** | **‑20 % QoQ** | | **Number of rounds** | **574** | Slight decline | | **Deal‑stage mix** | **≈90 %** of capital in **early‑stage** (seed‑pre‑Series A) | Late‑stage & growth rounds remain scarce | | **M&A volume** | Down **17 % YoY** | Consolidation slows | | **Private‑market funding** | Already **exceeds full‑year 2023 total** | Indicates strong pipeline despite lower deal count | **Interpretation:** - Investors are concentrating on the “frontier” segment—pre‑seed to Series A—where they can secure larger ownership stakes at lower valuations. - The dip in late‑stage financing and M&A suggests a cautious macro environment (inflation, higher cost of capital) and a shift toward building IP and technology foundations before scaling. --- ### 3. Konvoy Capital – Fund III Snapshot | Item | Detail | |------|--------| | **Assets under management (AUM)** | **$260 m** across three funds | | **Investment count** | **51** total; **40 %** outside North America | | **Geographic focus** | North America, Europe, Asia, Brazil (see event list) | | **Deal focus** | Frontier gaming technologies, **pre‑seed → Series A**, **$1‑5 m** checks | | **Key personnel** | Managing Partners: **Josh Chapman, Jason Chapman, Jackson Vaughan** | | **Support team** | Dedicated investment & platform professionals | | **Top newsletters** | • “Gaming IPO Watch List” <br>• “Mobile Gaming Post‑IDFA Deprecation” <br>• (3 additional curated newsletters) | | **Strategic events (Q2 2024)** | 15 industry conferences & expos (Jan‑Nov) across NA, EU, APAC, Brazil – covering gaming, media, and tech. | **Strategic Implications for Konvoy** - **Diversified pipeline:** 40 % of investments outside the U.S. mitigates regional risk and taps high‑growth markets (e.g., Southeast Asia, Brazil). - **Frontier focus:** Aligns with the broader VC shift toward early‑stage, high‑potential tech (cloud gaming, AI‑driven personalization, blockchain‑based economies). - **Thought‑leadership:** Curated newsletters and event participation reinforce Konvoy’s brand as a go‑to source for emerging gaming trends, especially around regulatory changes (e.g., IDFA deprecation)

market-analysis investment global+1

KonvoyJun 2024

Report

Gaming Industry Report: Q4 2023

The global gaming industry reached a market valuation of $184 billion in 2023, representing a modest year-over-year growth of 0.6%. Despite this stability, the sector experienced a significant contraction in investment activity, with venture funding falling 33% quarter-over-quarter in Q4 to $308 million. This decline reflects a broader normalization of capital flows to pre-pandemic levels, as the industry shifts away from the high-growth, speculative environment of 2021 and 2022. Key industry trends in late 2023 were defined by regulatory and operational restructuring. A landmark legal verdict against Google established that its app store practices constituted an illegal monopoly, forcing potential shifts in how developers distribute content and process payments. Simultaneously, major players like ByteDance began retreating from gaming divisions, while the industry at large grappled with approximately 10,500 layoffs. These workforce reductions were driven by a heightened focus on operational efficiency, the prioritization of high-retention projects, and the consolidation of assets following major mergers and acquisitions. Geographically, North America remains the primary hub for venture capital, though the industry maintains a global footprint with significant activity in Asia and Europe. While venture funding and M&A deal volumes have stabilized, public gaming stocks demonstrated resilience, with leading exchange-traded funds outperforming broader market indices by year-end. Looking forward, the industry is projected to maintain a compound annual growth rate of 3.5% through 2029, supported by the continued integration of user-generated content platforms and advancements in developer tools that emphasize productivity and cost-effective scaling.

market-analysis investment funding+2

KonvoyJan 2024

Financial

Gaming Industry Report: Q4 2024

The global gaming market reached $188 billion in 2024, reflecting a 2.1% year-over-year increase. While public gaming markets outperformed the S&P 500 with growth up to 50%, the venture capital landscape faced significant headwinds. Q4 2024 recorded the lowest funding level in over five years at $286 million, representing a 47% decline from the previous quarter. This downturn was primarily driven by a reduction in growth-stage investments and a steep decline in "graduation" rates, where only 4% of gaming startups that raised seed rounds since late 2021 successfully progressed to Series A. Geographically, North American funding remained relatively flat for the year, while Asia saw a 33% drop. Conversely, Europe experienced a 10% increase in funding. Despite the VC slowdown, the industry maintains a healthy environment for mergers and acquisitions, with public gaming companies and tech giants holding approximately $236 billion in combined cash and equivalents. Notable sector trends include an increasing allocation of capital toward AI—accounting for 10% of 2024 funding—and a continued interest in extended reality (XR) following Google’s announcement of the Android XR operating system. The industry also faces significant regulatory and structural shifts. Key developments include U.S. antitrust actions against Google that could force the divestiture of Chrome or Android, and ongoing legal battles regarding a potential U.S. ban on TikTok. Additionally, there is heightened global scrutiny regarding child protection, exemplified by Australia’s social media ban for minors and new safety protocols implemented by Roblox. In hardware, the Nintendo Switch became the most sold console in U.S. history, reaching 46.6 million units. This analysis utilizes data from CB Insights, Carta, and Circana to provide a comprehensive overview of the private and public gaming sectors through the end of 2024.

market-analysis investment global

KonvoyJan 2025

Report

Gaming Industry Report: Q1 2023

The gaming industry experienced a resilient start to 2023, with a projected global market size of $201 billion, representing a 9% year-over-year increase. Public markets showed strength, with gaming-focused exchange-traded funds (ETFs) recording gains between 10% and 23% year-to-date. While private market venture funding saw a total of $761 million across 109 deals in the first quarter, activity remains concentrated in early-stage investments, as late-stage funding has slowed significantly compared to the peak levels of 2021. Geographically, Asia led global venture funding in the first quarter, followed by North America and Europe. Emerging markets such as Africa and South America saw sporadic but notable deal activity, highlighting a broader global interest in gaming infrastructure and content. Major industry players currently hold approximately $48 billion in cash and equivalents, suggesting a stable environment for potential future mergers and acquisitions despite ongoing regulatory scrutiny regarding large-scale consolidation. Key industry trends in early 2023 include the integration of artificial intelligence for asset generation and conversational tools, alongside a strategic shift by major tech firms toward cloud-based gaming infrastructure. Competitive dynamics are evolving as Epic Games introduces self-publishing tools to challenge Steam’s market dominance and integrates user-generated content into its Fortnite ecosystem. Furthermore, platforms like Roblox are successfully expanding their reach by aging up their user demographic. These developments, supported by a robust schedule of global industry conferences, indicate a focus on platform scalability, content diversification, and the optimization of developer tools to sustain long-term growth.

market-analysis investment funding+3

KonvoyApr 2023

Financial

Gaming Industry Report Q2 2023

The analysis presents a comprehensive snapshot of the global gaming industry in the second quarter of 2023, emphasizing the sector’s continued expansion and shifting investment dynamics. The market is projected to reach $201 billion in 2023, reflecting a 9 % year‑over‑year increase, while public gaming ETFs have risen between 10 % and 30 % since the start of the year, underscoring strong investor confidence. Cash reserves across leading public gaming firms total roughly $45 billion, supporting a robust merger‑and‑acquisition environment. Venture capital activity shows a pronounced contraction, with total gaming VC funding falling to $1.23 billion in Q2 2023—a 38 % decline quarter‑on‑quarter—driven primarily by a 60 % drop in growth‑stage investments. The number of deals fell 22 % to 194, with early‑stage financing in North America down about 60 % and Europe remaining essentially flat. Asia remains the most active region, accounting for the majority of growth‑stage capital, while South America’s activity is concentrated in Brazil and Africa recorded no deals during the period. Data are drawn from CB Insights, Newzoo, public market filings and company disclosures, covering all VC rounds from pre‑seed through late‑stage across 2019‑2023. Strategic developments highlighted include Apple’s launch of the Vision Pro spatial computer, Embracer Group’s restructuring toward first‑party IP, and the near‑completion of Microsoft’s acquisition of Activision Blizzard pending regulatory clearance in the UK, EU and US. Emerging trends point to a new era for user‑generated content, where popular IP will drive platform growth, and the expanding role of generative AI in asset creation, map design and NPC behavior. The report also outlines the 2023 conference calendar and provides a brief profile of Konvoy’s investment focus, assets under management and recent activity in frontier gaming technologies.

market-analysis investment global+1

KonvoyMar 2023

Report

Gaming Industry Report: Q4 2022

The analysis presents a comprehensive overview of the global gaming market in 2022 and its projected trajectory to 2027, emphasizing a modest expansion of the sector’s revenue base and a shifting investment landscape. The market reached $184.4 billion in 2022, a 2.3 % year‑over‑year increase, and is forecast to climb to $283 billion by 2027, reflecting an annual growth rate of roughly 9 %. Mobile platforms remain the dominant distribution channel, accounting for $116 billion of consumer spend in 2021, or 64 % of total gaming revenue, while console and emerging XR segments experience divergent pressures. Venture capital activity illustrates a pronounced contraction after a 2021 peak, with total funding falling from $8.8 billion to $5.3 billion in 2022 and growth‑stage deals declining despite a stable number of transactions. Funding for web3 gaming collapsed by 83 % in Latin America and saw a global downturn, driven by concerns over token utility, game quality, and high-profile fraud incidents. Concurrently, regulatory scrutiny intensified, particularly around data‑privacy measures such as Apple’s IDFA and Google’s AAID, which have raised user‑acquisition costs and forced developers to prioritize content depth over advertising efficiency. Corporate liquidity underscores a robust M&A environment: gaming firms collectively hold $47.7 billion in cash, while major tech companies with gaming divisions command $157 billion. Nevertheless, gaming‑focused ETFs underperformed, with ESPO and GAMR posting year‑to‑date declines of 35 % and 37 % respectively. The report draws on a blend of public market data, venture‑capital databases, and industry surveys from sources such as CB Insights, Newzoo, and major console manufacturers, covering all major regions and spanning the period from 2019 through Q4 2022.

market-analysis investment global+2

KonvoyOct 2022

Gaming Industry Report: Q3 2024

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