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Shared Values: What it Means to Have a Strategic Investment Partner on Board
MY.GAMES Venture Capital (MGVC) functions as a strategic investment arm within the broader MY.GAMES ecosystem, focusing on fostering growth for independent game development studios.
- Strategic partnerships that combine creative independence with centralized infrastructure allow studios to scale more efficiently than fully independent operations.
- MY.GAMES Venture Capital (MGVC) utilizes proprietary tools like MyUA to provide high-accuracy ROI predictions and granular performance metrics for user acquisition.
- The efficacy of the MGVC model is evidenced by the title War Robots, which saw a fourfold revenue increase within one year following the application of the firm's marketing and live-operations expertise.
Panel: How to Prepare Your Studio for M&A
Professionalizing business operations serves as the foundational requirement for any game studio contemplating a merger or acquisition.
- Professionalize business operations by appointing a dedicated finance director to ensure all financial records are transparent and audit-ready before entering the market.
- Engage experienced M&A advisors early in the process to navigate complex due diligence, manage deal fatigue, and handle legal negotiations that frequently derail unprepared studios.
- Prioritize cultural alignment over market trends when selecting a partner, as the loss of key talent is the primary risk to post-acquisition value.
Panel: Where is the Money at in M&A?
The gaming industry is currently undergoing a period of intense consolidation, characterized by a significant surge in merger and acquisition activity that has notably outpaced previous years.
- Approximately 83 percent of total acquisition value is now concentrated in studios that possess self-publishing capabilities, including control over intellectual property, user acquisition, and direct audience feedback loops.
- Acquisition strategies are shifting toward distributed models that prioritize studio autonomy to preserve the creative culture and innovation that drive long-term value.
- Investors are prioritizing early-stage, ambitious studios that demonstrate the infrastructure required for scalability and authentic player engagement.
What are Your Existing Users Worth & How to Extract Maximum Value
This presentation outlines methodologies for valuing existing game user cohorts and leveraging that value to optimize growth.
- Treat existing user cohorts as financial assets by modeling the 'area under the curve' to project future revenue and secure non-dilutive capital.
- Calculate the residual value of cohorts—the expected revenue after initial acquisition—to optimize user acquisition (UA) efficiency and align costs with projected lifetime value (LTV).
- Prioritize capital-efficient funding by stacking ad network credit and free cash flow before resorting to debt facilities or equity to avoid unnecessary dilution.
Game Biz #3 | Game Company Growth Strategies ft Chris Petrovic and Eric Kress
The gaming industry is currently undergoing a structural transition as major players shift from a reliance on aggressive mergers and acquisitions toward the more complex challenge of organic growth.
- The gaming industry is shifting from an M&A-heavy growth model to a focus on organic growth, as high-quality independent acquisition targets become scarce and integration challenges persist.
- Investors are increasingly pressuring major firms like EA, Take-Two, and Zynga to demonstrate internal innovation and the ability to launch new franchises rather than relying on capital-intensive consolidation.
- Companies are pursuing vertical integration by acquiring ad-tech capabilities to optimize profitability and mirror the valuation models of firms like AppLovin.
Global Gaming Industry Update: June 2021
The global gaming industry experienced unprecedented deal activity during the first half of 2021, characterized by rapid consolidation and record-breaking investment levels.
- In the first half of 2021, the gaming industry saw $23 billion in M&A activity across 169 deals, nearly doubling the total dollar value recorded for the entire year of 2020.
- Private placement transactions reached $4.8 billion across 364 deals during the first six months of 2021.
- Major strategic consolidators included Tencent, Electronic Arts, Take-Two, and Embracer Group, while private equity firms like The Carlyle Group and Bain Capital significantly increased their market participation.
Panel: Healthy Growth Tactics for Esports
The modern esports landscape is shifting from a reliance on established titles like League of Legends and Counter-Strike toward a more diversified ecosystem that includes sports simulations and Olympic-sanctioned digital competitions.
- Esports growth is shifting from a reliance on legacy titles like League of Legends and Counter-Strike toward a diversified ecosystem that includes sports simulations and Olympic-sanctioned digital competitions.
- Sustainable esports development relies on prioritizing core gameplay, spectator tools, and matchmaking infrastructure rather than forcing competitive structures onto games prematurely.
- Esports currently functions primarily as a high-level marketing tool for publishers rather than a direct revenue driver, necessitating a focus on long-term viability through franchise models.
Panel: Getting a Publisher vs. Self-publishing
The strategic choice between self-publishing and partnering with a publisher hinges on a developer’s internal capacity, long-term objectives, and organizational culture.
- Self-publishing requires an internal infrastructure capable of managing marketing, localization, quality assurance, and user acquisition, whereas partnering with a publisher provides operational stability at the cost of creative autonomy.
- Publishers evaluate mobile titles using small-scale user acquisition tests to validate retention and monetization, while PC and console projects are assessed based on Steam wishlists, social engagement, and prototype quality.
- Developers must conduct an honest internal audit of their team's skill sets and resources to determine if they can independently manage the complex operational demands of a commercial release.
Panel: Organising Projects: Financing vs. Killing it
Sustainable game development requires a strategic balance between creative autonomy and rigorous financial discipline.
- Studios achieve financial stability by balancing high-risk original intellectual property with reliable work-for-hire or co-development contracts to minimize external investment dependency.
- Project viability is managed through a data-driven framework where teams establish internal key performance indicators that are vetted by leadership panels.
- Studios mitigate the sunk-cost fallacy and resource waste by utilizing gray-box prototypes and market-focused mock-ups to validate commercial potential before full-scale production.
Panel: Are M&As the New Markers of Success?
The global gaming industry is currently undergoing a period of intense consolidation, fueled by a sector valuation reaching $200 billion and consistent annual growth.
- The global gaming industry has reached a $200 billion valuation, driving intense consolidation as a primary mechanism for scaling.
- Early-stage studios are increasingly seeking acquisition to overcome the high barriers of global distribution, marketing, and live-operations infrastructure.
- Investment strategies have shifted toward rigorous, data-driven evaluations that prioritize team experience, player retention metrics, and long-term market viability.
Global Gaming Industry Update: May 2021
The global gaming industry experienced unprecedented financial activity during the first five months of 2021, with total deal value surpassing that of any previous full year.
- The global gaming industry reached a record-breaking $49 billion in disclosed deal value during the first five months of 2021, surpassing the total deal value of any previous full year.
- Major industry players including Tencent, Embracer Group, Epic Games, and ByteDance drove aggressive market consolidation through high-volume M&A activity.
- Public markets experienced significant capital inflows, highlighted by the $2 billion IPO of AppLovin and a high volume of SPAC launches.
Investing in the Games Industry with Daniel | Game Dev Unchained Episode 264
The gaming industry is currently undergoing a structural shift characterized by a narrowing valuation gap between high-performing titles and the developers behind them.
- Investors are prioritizing studios with established games-as-a-service models to secure consistent cash flow and mitigate the risks associated with hit-driven development cycles.
- Capital is increasingly flowing toward portfolios of mid-tier titles and 'picks and shovels' middleware companies that address systemic production inefficiencies.
- The industry is shifting away from labor-intensive manual workflows toward proceduralism and advanced automation to reduce iteration times and combat developer burnout.