InvestGame Games Industry Deals Report: Q1 2023

Key insights

4 slides

Market Contraction

The global gaming industry saw a significant contraction in deal value during Q1 2023.

Total deal value plummeted to $2.1 billion in the first quarter of 2023.

Key Decline. Total gaming deal value plummeted 86% year-over-year to $2.1 billion in Q1 2023.

$2.1 billion

Total value of closed gaming deals in Q1 2023.

Q1 2022: $15.4 billion

Other Investments

Private investments and public offerings also saw declines in Q1 2023.

Private investment values declined by 71%, and public offerings fell by 20%.

Like a small plant growing in a dry season, early-stage private investment shows resilience despite overall market conditions.

Mixed Picture. Private investment and public offering values declined by 71% and 20% respectively, though private investment activity showed growth compared to the previous quarter.

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Summary

The InvestGame Q1 2023 report provides a comprehensive analysis of global gaming industry deal activity, highlighting a significant contraction in market value compared to the same period in 2022. The primary thesis centers on a sharp decline in total deal volume and value, driven largely by a cooling in mergers and acquisitions, while simultaneously noting the resilience of the early-stage private investment sector.

Key findings indicate that the total value of closed gaming deals plummeted to $2.1 billion in the first quarter of 2023, representing an 86% decrease from the $15.4 billion recorded in Q1 2022. The number of closed deals also fell from 277 to 193. Mergers and acquisitions experienced the most severe downturn, dropping 94% year-over-year to a total value of $600 million. Private investments and public offerings also saw declines, falling 71% and 20% respectively. Despite these figures, the report notes that private investment activity showed growth compared to the previous quarter, suggesting a robust early-stage market that may foster future industry unicorns.

The scope of the analysis covers global gaming industry transactions, including video game developers, publishers, esports, and platform companies. Andreessen Horowitz emerged as the most active venture capital fund during this period, closing nine deals valued at $177 million, followed by Makers Fund and Bitkraft Ventures. While M&A activity reached a low point in the first quarter, analysts anticipate a recovery in subsequent periods, supported by major deals already in the pipeline, such as the acquisitions of Scopely and Rovio.