Report

Gaming Deals Activity Report: Q1–Q3 2022

1 January 202229 pages7,539 words

Summary

The gaming investment landscape in the first three quarters of 2022 reflects a significant market correction following a record-breaking 2021. While the total value of closed and announced deals reached $124.5 billion—nearly double the previous year's volume—this figure is heavily skewed by Microsoft’s pending $69 billion acquisition of Activision Blizzard. Excluding that single transaction, the market shows clear signs of cooling due to macroeconomic instability, post-pandemic shifts in user engagement, and increased regulatory scrutiny. Strategic mergers and acquisitions (M&A) remain the primary driver of deal value, reaching a record $101.4 billion year-to-date, despite a 40% decline in the number of closed transactions. Major players like Embracer Group, Sony, and Saudi Arabia’s Public Investment Fund (PIF) dominated this activity. Conversely, public offerings have nearly collapsed, reaching their lowest point since early 2020, with deal values shrinking fivefold compared to 2021. Private investments also saw a sharp decline in the third quarter, dropping 69% from the previous quarter, signaling that the "soured" economic climate has finally impacted venture capital and corporate rounds. The report highlights a notable shift in the blockchain and Web3 gaming sectors. While early-stage investment in this space previously drove market growth, the third quarter of 2022 marked the first period of negative growth for blockchain-related investments, with total deal value falling 14% year-over-year. Investors are becoming more selective, moving away from infrastructure platforms toward studios capable of producing engaging content. Geographically, the United States remains the most active market for gaming investments, followed by the United Kingdom and Turkey. Gender diversity remains a challenge for the industry, as 89% of companies receiving investment are male-led, with women-led entities representing only 2% of the total.

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Analysis of the global video game industry’s financial activity in the first quarter of 2023 reveals a period of market correction and stabilization following previous record highs. While total deal value across private investments, mergers and acquisitions (M&A), and public offerings saw significant year-over-year declines, the volume of private deals suggests a return to regular levels of activity. The data indicates a bifurcated market where early-stage venture capital remains robust while late-stage and public market activities struggle under the pressure of high interest rates and bearish sentiment. Private investment reached $3.3 billion across 141 deals, representing a 71% decrease in value compared to the same period in 2022. However, early-stage investments showed resilience, acting as a primary driver for future industry growth. In contrast, late-stage deals were scarce, with a single $265 million investment in VSPO accounting for 65% of the total late-stage value. The M&A sector hit a multi-year low with only 43 closed deals totaling $11.4 billion—a 94% drop in value from the previous year—though pending major acquisitions like Scopely and Rovio suggest a potential rebound in subsequent quarters. Public offerings remained stalled, totaling $0.7 billion across nine deals, as macroeconomic conditions continued to deter companies from entering public markets. The most active venture capital firms during this period included Andreessen Horowitz, Makers Fund, and BITKRAFT Ventures, with a heavy focus on early-stage rounds. The findings are based on data from InvestGame, which tracks closed transactions in the video game sector excluding gambling and non-gaming blockchain entities. Methodology involves a weighted ranking system for investors that prioritizes lead deal volume and value. Data sources include public media, S&P Capital IQ, and internal market insights.

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Gaming Deals Activity Report: Q1–Q3 2022

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