Investment

People Can Fly presents a strategic pivot toward cash flow optimization and a refined production focus as of April 2025. The primary thesis centers on transitioning away from the virtual reality segment to concentrate exclusively on AAA and compact-AAA video games. This shift is driven by changes in the global VR business model, specifically the cessation of platform subsidies. Consequently, the company will conclude its VR publishing activities following the release of Project Bison in late 2025.

Financial data for the 2024 fiscal year shows cumulative revenue of PLN 190.4 million, an increase from PLN 150.1 million in 2023. This growth was supported by work-for-hire contributions from Project Maverick and Project Echo, alongside the launches of Bulletstorm VR and Green Hell VR Co-op. However, the group reported a significant net loss of PLN 175.3 million, largely attributed to one-off write-offs for Project Red, Project Bifrost, and the impairment of the Incuvo subsidiary.

The strategic roadmap emphasizes securing new work-for-hire contracts, including a recently signed project with Sony Interactive Entertainment, with a target of adding two more projects this year. In the self-publishing segment, Lost Rift is scheduled for early access in 2025. Notably, Krafton Inc. has waived its right of first refusal for Projects Bifrost and Victoria, granting the company freedom to seek new publishing partners.

Operational efficiency measures include optimizing team structures and office spaces while limiting disbursements to critical investments. As of late 2024, the group maintained a workforce of 756 employees across global studios in Warsaw, Montreal, Newcastle, and other locations. The company is currently evaluating various scenarios to secure additional financing to support its revised development pipeline.

The global gaming industry experienced a significant resurgence in financial activity during the first quarter of 2025, marked by a substantial rebound in mergers, acquisitions, and private placements. Total deal value for the quarter reached $4.4 billion across 48 announced transactions, representing the highest quarterly valuation in nearly two years. This momentum was primarily driven by large-scale strategic consolidations, such as the $3.5 billion acquisition of Niantic’s games division by Scopely and AppLovin’s $900 million studio spin-off. Simultaneously, private investment surged to $3.5 billion across 149 deals, anchored by a landmark $3 billion investment into Infinite Reality at a $12.25 billion valuation.

Investment trends during this period shifted toward AI-driven entertainment and mobile user acquisition technologies. Strategic players like Savvy Games Group and Tencent maintained leadership roles in capital deployment, while venture capital firms such as BITKRAFT and Andreessen Horowitz remained the most prolific investors by volume. Geographically, the Asian developer market demonstrated steady stability with a median revenue growth of 9%, while the hardware and tools sector outperformed broader segments with a 20% average revenue increase. This growth was heavily influenced by the dominance of NVIDIA, which saw a 114% year-over-year revenue surge, positioning it as a cornerstone of the industry’s infrastructure with a $2.6 trillion market capitalization.

Despite the overall recovery reflected in the 16.37% return of the Drake Star Gaming Index, the market exhibited extreme volatility among individual public companies. While Sea Limited experienced a dramatic 223% increase, established entities like Unity and Ubisoft faced significant downturns, with valuations falling by over 50%. This divergence highlights a period of intense transition where hardware providers and AI-integrated platforms are capturing the majority of market gains, while traditional software developers and engine providers navigate a more challenging and fragmented economic landscape.

The Q1 2025 Games Investment Review provides a comprehensive analysis of global financial activity within the video game industry, covering investments, mergers and acquisitions (M&A), and initial public offerings (IPOs). The report identifies a significant recovery in market activity, noting that the combined value of investments and M&As reached $7.8 billion across 245 transactions. This represents the largest quarterly total since late 2023 and the second consecutive quarter of growth, signaling a stabilizing investment landscape.

Key findings highlight a massive surge in investment value, which rose 370% quarter-over-quarter to $4.4 billion. This growth was primarily driven by a $3.0 billion mid-to-late-stage investment in Infinite Reality. While M&A volume hit a two-year high with 55 transactions, the total reported value fell to $3.3 billion, largely because 80% of these deals did not disclose financial terms. The exit market showed strength through Asmodee’s $2.2 billion IPO and several billion-dollar acquisitions, such as Miniclip’s purchase of Easybrain. Additionally, new fund announcements reached a three-year peak of $21.8 billion, with 65% of that capital concentrated in five major funds.

The scope of the research encompasses diverse industry segments, including Console/PC, Mobile, Tech/Other, eSports, and Web3/Blockchain. Geographically, activity was led by Asia and Europe, while North America contributed high transaction volume with lower disclosed values. Methodology relies on a proprietary database tracking officially closed deals rather than mere announcements, ensuring data reflects actual capital deployed. The analysis emphasizes that artificial intelligence and blockchain remain primary areas of investor enthusiasm, with AI-related game investments totaling $3.1 billion during the quarter.

Industry leadership maintains a cautiously optimistic outlook for 2025, with 98% of executives expecting consumer spending to either increase or remain stable. Growth expectations are strongest in the mobile sector, where 41% of leaders anticipate expansion in in-app purchases and 31% expect growth in advertising revenue. While the PC segment remains relatively healthy with a 33% growth projection, the console market appears more stagnant, as 70% of respondents forecast stable performance and only 15% predict growth. This outlook is tempered by concerns regarding content saturation and a challenging user acquisition environment, which are cited as the primary hurdles facing the industry.

Operational strategies for the coming year signal a shift toward expansion and increased investment. A majority of companies plan to initiate more game development projects in 2025 compared to the previous year, supported by higher or stable budgets and increased marketing spend. Talent acquisition remains a priority, particularly in game development and engineering roles. Furthermore, the mergers and acquisitions landscape is expected to intensify, with 71% of executives anticipating more opportunities in 2025 and none predicting a decrease in activity.

Artificial intelligence has reached a significant level of penetration within the sector, with 84% of companies reporting either limited implementation or advanced integration across multiple functions. Executives identify art, game design, and engineering as the areas where AI will provide the most significant value. These findings, compiled by a leading global investment bank specializing in gaming, reflect a sector transitioning from a period of consolidation toward a renewed focus on production, technological integration, and strategic deal-making.

The global gaming industry experienced a notable resurgence in early 2025, characterized by a rebound in merger and acquisition activity and sustained interest in private financing. During the first quarter, 48 announced acquisitions reached a total value of $4.4 billion, anchored by the significant $3.5 billion acquisition of Niantic’s games division by Scopely. Simultaneously, the private placement market remained active, recording 149 deals worth $3.5 billion. These investments were primarily concentrated in mobile-focused developers and companies integrating artificial intelligence into their entertainment platforms, with major strategic entities like Savvy Games Group and Tencent continuing to drive market momentum.

Despite this activity, the financial landscape remains bifurcated. While the broader sector shows signs of recovery, with the Drake Star Gaming Index posting a 16.37% gain, performance remains highly volatile across the top 35 public gaming companies. Valuation disparities are particularly pronounced; industry leaders such as NVIDIA and AppLovin command premium revenue multiples, while many other firms face a more challenging environment. Furthermore, while early-stage funding remains accessible, later-stage financing continues to present significant hurdles for companies seeking capital.

Looking forward, the industry is positioned for a gradual increase in consolidation as public markets stabilize. Strategic focus is shifting toward the integration of AI and advanced technological platforms, which are expected to serve as primary catalysts for future growth. As market conditions improve, the sector is likely to see a renewed pipeline of initial public offerings, signaling a transition toward a more mature and diversified investment climate for global gaming stakeholders.

Public gaming equities surged in the first half of 2025, with the Drake Star Gaming Index climbing 28 % compared to a modest 5 % gain in the S&P 500. Leading performers included Square Enix, Roblox and Konami, underscoring a robust rebound in the sector. M&A activity remained steady at 46 deals, highlighted by Krafton’s $516 million purchase of ADK and Epic Games’ acquisition of AI studio Loci. Private‑market financing reached $3 billion across 110 placements, driven by high‑profile exits such as Dream Games’ $2.5 billion minority stake sale to CVC and Apple’s acquisition of RAC7 for its arcade portfolio. Projections indicate a continued rise in M&A and IPO activity through 2026, with artificial intelligence and technology platforms identified as primary growth catalysts.

Private‑placement capital in Q2 2025 totaled $2.6 billion across 24 deals, with the largest transaction—a $5 billion minority stake sale—valuing its target at nearly $5 billion. Deal distribution spanned mobile ($1.5 billion), PC/console ($0.8 billion), platform/tools ($0.4 billion), esports ($0.3 billion) and blockchain/VR‑AR ($0.2 billion). Key investors included CVC, Blackstone, Tencent and Bessemer Venture Partners. Notable exits such as Dream Games’ $2.5 billion minority sale and Arrowhead’s $80 million investment provided significant liquidity for early‑stage venture capitalists.

Valuation analysis reveals a pronounced divergence between high‑growth Asian titles and mature Western peers. Tencent (EV/EBITDA ≈ 5.7x, revenue growth 10%) and Sea Limited (EV/EBITDA ≈ 4.1x, revenue growth 30%) command premium multiples and robust double‑digit growth, reflecting investor appetite for fast‑growing Asian firms. In contrast, U.S. hardware and platform players such as NVIDIA (EV/EBITDA ≈ 17.9x, revenue growth 43%) and Unity (EV/EBITDA ≈ 6.2x, revenue growth –17%) exhibit lower multiples and mixed performance, indicating more modest valuations amid fluctuating earnings. This geographic and segmental disparity underscores the continued premium placed on rapid growth in emerging markets while mature Western companies face a more cautious valuation environment.

Collective work under the direction of dr Jakub Marszałkowski dr Jakub Marszałkowski, Indie Games Poland, Poznan University of Technology (chapters 3, 5, 8, 9) Eryk Rutkowski, Polish Agency for Enterprise Development (chapters 2, 4, 6) Wojciech Trusz, Creative Industries Institute (chapters 1) Piotr Milewski, Sirius Game Studio, Gdynia Maritime University (chapters 7) Game Industry Conference team: Olga Matej, Agnieszka Wołoszyn, Kacper Żubryk, Hanna Marszałkowska, Dominik Latos Extra data minin...

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The analysis tracks global venture‑capital activity in the video‑game sector from the first quarter of 2019 through the second quarter of 2024, focusing on deals funded by VCs, strategic investors and publishers. It quantifies total capital deployed and deal counts, revealing a rapid expansion from $2 billion across 117 transactions in 2019 to a peak of $5.3 billion in 2021 (186 deals), followed by a sharp contraction in 2022 to $1.8 billion (126 deals) and a further dip to $874 million in 2023 (148 deals). Early‑stage financing remained relatively stable throughout, while the decline was driven primarily by fewer Series A‑plus rounds, creating a scarcity of growth‑stage capital. The report notes a modest rebound in 2024, with new funds entering the market and higher expected returns despite lingering marketing and user‑acquisition challenges.

Geographically, investors increasingly target emerging regions such as South America, Eastern Europe, Southeast Asia and China, seeking cost‑efficient teams and pre‑seed opportunities. Mobile games continue to dominate the funding landscape, yet interest in mid‑tier “AA” titles is growing, reflecting a shift toward projects that promise shorter payback periods and stronger ROI. The pandemic‑driven hyper‑casual boom accelerated user‑acquisition technology, while post‑pandemic privacy changes (e.g., Apple’s IDFA restrictions) and macro‑economic headwinds have dampened overall spend and slowed M&A and IPO activity.

Methodologically, the 2019 figures are derived from the Games Fund team’s synthesis of publicly available sources, while data for 2020‑2024 come from the investgame.net analytical platform. The combined dataset provides a comprehensive view of deal volume, value and regional distribution, supporting the conclusion that the gaming VC market exhibits pronounced cyclical dynamics, with early‑stage resilience and emerging‑region optimism offset by a constrained growth‑stage pipeline and broader economic uncertainty.

The gaming industry experienced a strategic shift in 2024, moving away from short-term financial arbitrage toward long-term, objective-driven transactions. While the broader market faced a stricter environment characterized by layoffs and the offloading of non-core assets, total deal-making activity remained above pre-pandemic levels. A significant trend emerged in the work-for-hire sector, highlighted by the $2.8 billion Keywords buyout. Additionally, venture capital interest notably pivoted from game development studios toward platform and technology startups, leaving corporate venture arms to fill the gap in studio financing.

The analysis identifies a stabilization phase following the post-pandemic "hangover." Private investments saw a 22% year-over-year increase in funding during Q4 2024, while the M&A market recorded one of its strongest quarters in two years. Although the public market remained volatile, a three-quarter recovery trend in public offerings suggests a gradual reopening of the IPO window. Geographically, North America and Europe led early-stage studio fundraising, accounting for the vast majority of capital raised, while Asian developers dominated new top-tier mobile releases.

The outlook for 2025 anticipates sustained M&A momentum driven by lower interest rates, significant cash reserves among public strategics, and increased private equity involvement. Investment in AI-driven solutions and web3 is expected to rise, fueled by renewed crypto enthusiasm. While high-profile gaming teams will continue to command strong valuations, such deals may become less frequent as investors prioritize "picks and shovels" technology over pure content.

This report covers global gaming industry segments including PC, console, mobile, and hardware, with a specific focus on M&A, private equity, and public offerings. Data is derived from public media, business partners, and market insights, tracking closed transactions while excluding pure gambling and non-gaming blockchain ventures.

The guide aims to equip Spanish video‑game developers and publishers with a practical framework for securing external financing beyond traditional bank credit. It argues that investment agreements (IAs) represent a flexible, hybrid model that can bridge the gap between shareholders’ equity and debt, allowing investors to fund projects while retaining political and economic rights comparable to shareholders without immediate capital‑increase obligations.

Key content outlines the typical structure of an IA: investors provide lump‑sum or milestone‑linked capital, receive a defined share of commercial revenues, and obtain voting, dividend and information rights. Comparative analysis shows that, unlike standard debt, IAs do not impose fixed repayment schedules, instead tying returns to project profitability and offering conversion mechanisms that can transform credit into equity if revenues fall short. The guide enumerates standard clauses—profitability timeframes, capitalisation rights, representations and warranties, confidentiality, “bad‑leaver” provisions, and pre‑emptive rights—to protect both parties and manage risk. An illustrative example notes that a €100 investment with a 20 % return target is achieved once the project generates €120 in revenue.

The scope is national, targeting the Spanish video‑game sector and addressing developers of any size who seek alternative funding. Authored by legal counsel from Pérez‑Llorca and the Asociación Española de Videojuegos, the document draws on industry practice rather than empirical surveys, presenting a checklist and glossary to support contract drafting and due‑diligence processes. Its conclusion stresses that, as acquisitions and external investments rise, IA investors will increasingly influence project governance despite not holding formal share capital.

The guide explains that insurance is a critical safeguard for video‑game development in Spain, where tight schedules, complex technical workflows and the involvement of multiple parties create a range of legal and financial exposures. Its central thesis is that appropriate coverage not only mitigates the impact of unforeseen events but also functions as an indirect prevention tool, protecting both small studios and independent creators from liabilities that could jeopardise a project’s completion and commercial success.

Key risks identified include failure to meet delivery deadlines, software bugs, transmission of computer viruses, cyber‑attacks, data‑protection breaches, intellectual‑property infringements, defamation, and malicious acts by employees. Each risk is linked to potential legal consequences such as contractual liability, third‑party compensation claims, regulatory penalties from the Spanish Data Protection Agency, and reputational damage. The guide matches these exposures to specific insurance solutions: Professional Liability Insurance (PLI) and Errors & Omissions (E&O) for contractual and professional errors; Cybersecurity Insurance for hacking, ransomware and data‑loss incidents; Multi‑Risk and General Civil Liability policies for broader operational hazards; and specialised coverage for intellectual‑property disputes, defamation and employee misconduct.

The scope is national, focusing on the Spanish video‑game sector and addressing developers of all sizes, from freelancers to larger studios. While the guide does not present original empirical research, it draws on prevailing market offerings and legal frameworks to construct a practical risk‑assessment matrix. Recommendations emphasize engaging insurance brokers to conduct tailored assessments, compare policy terms, and periodically review coverage, with clear procedural steps for application, policy issuance, amendment periods and premium payment.

Overall, the guide provides a comprehensive checklist for selecting and maintaining insurance that aligns with the specific vulnerabilities of video‑game projects, underscoring the importance of proactive risk management in a highly competitive and technically demanding industry.