Investment reports and market data
Documents
Show me the public money – Tax breaks and grants
Accessing public funding and tax incentives is a critical component of financial strategy for UK-based game developers.
- UK game developers can claim 20% of qualifying development costs back through the Video Games Tax Relief (VGTR), which remains accessible even for unreleased titles.
- Because VGTR is paid in arrears, developers frequently utilize bridging loans against their claims to maintain operational cash flow.
- Engaging accountants with specific VGTR expertise is critical, as general R&D tax credit experience is often insufficient and can cause significant processing delays.
Why V2 Games is investing in blockchain companies through the Future Fund
V2 Games has launched the Future Fund, a $10 million investment vehicle dedicated to supporting game studios and projects that represent the next evolution of the gaming industry.
- V2 Games has launched the $10 million Future Fund to invest in game studios and projects, with a primary strategic focus on integrating blockchain technology.
- The fund views blockchain as a fundamental infrastructure upgrade that replaces centralized databases with decentralized ledgers to enhance security and transaction transparency.
- A core investment thesis is the creation of non-fungible in-game assets, which provide players with verifiable proof of ownership that distinguishes items from mass-produced assets in traditional gaming.
2018 Global Esports Market Report
The 2018 Global Esports Market Report provides a comprehensive analysis of the esports industry as it transitions toward a mature, multi-billion-dollar business model.
- Global esports revenue is projected to reach $906 million in 2018, marking a 38.2% year-on-year increase.
- Brands drive 77% of total market revenue, signaling a shift from experimental spending to long-term sponsorship commitments.
- Media rights represent the fastest-growing revenue stream, with a projected compound annual growth rate of 49.8% through 2021.
Libro Blanco del Desarrollo Español de los Videojuegos
The Spanish video game industry represents a high-growth, export-oriented sector that serves as a critical engine for innovation and professional employment.
- The global gaming market had 1.231 billion active players by the end of 2013, representing over half of the world's internet-connected population and 17.5% of the total global population.
- The gamification business is projected for exponential growth, with Markets And Markets estimating a potential business of $5.5 trillion USD by 2018, growing at a 67.1% annual rate between 2013 and 2018.
- The Spanish video game sector increased employment by 29% in 2013, with 65% of contracts being permanent, making it a significant job creator for highly qualified young professionals.
Videojuegos en España: Impacto Económico y Escenarios Fiscales
Spain’s video-game industry is presented as a dynamic component of the national ICT services sector, whose economic relevance extends far beyond direct production.
- The Spanish video game industry generates a total economic impact of €3.577 billion, with every €1 invested yielding €3 in total economic activity.
- The sector supports 22,828 total jobs when accounting for indirect and induced effects, with each direct industry position sustaining 2.6 additional jobs elsewhere.
- Implementing a tax-credit fiscal policy (Scenario E2) is projected to provide the strongest stimulus, adding €627 million in production and 4,000 full-time jobs to the economy.
Turning a mobile game from Highway To Hell into Stairway To Heaven
The development of competitive mobile games requires a lean, iterative approach that prioritizes market validation from the first day of production.
- Prioritize market validation from day one by integrating user acquisition and discoverability strategies into the initial project inception rather than treating them as post-development tasks.
- Utilize rapid prototyping and continuous market testing to iterate on visual styles, UI, and core mechanics simultaneously, allowing for real-time performance measurement.
- Measure project viability through key performance metrics, specifically day-one and day-seven retention rates, to determine whether to pivot or refine concepts early.
Nasdaq Nordic on access to capital and visibility for games companies
Nasdaq Nordic serves as a primary hub for gaming companies seeking capital, visibility, and international growth through public listings.
- Nasdaq Nordic has surpassed London as the leading European venue for IPOs, with companies raising nearly 8 billion euros through the exchange in the previous year.
- Gaming companies like Paradox Interactive, Remedy, and Nitro Games have successfully utilized the exchange to secure capital, with Remedy’s offering notably oversubscribed by a factor of 8.5.
- Public listing on Nasdaq Nordic provides gaming firms with a 'quality stamp' that enhances international negotiation leverage and facilitates future acquisitions.
Meet the games investors and discover what they look for in developers
Securing investment in the gaming industry requires a disciplined approach that balances creative vision with rigorous business acumen.
- Investors prioritize developers who demonstrate a balanced capability to manage both creative game design and the commercial realities of the marketplace.
- Pitch decks must be grounded in verifiable performance metrics, specifically focusing on cost per install, lifetime value, and day-28 retention to prove long-term sustainability.
- Funding strategies must be stage-appropriate, shifting from a focus on prototype strength and team experience at the seed stage to robust financial performance and monetization strategy for later-stage growth.
Pitching is scary, networking is hard
Effective communication, whether for securing game industry funding or navigating personal interactions, relies on mastering the art of persuasion through structured, persistent, and adaptable messaging.
- A successful pitch must follow a structured progression: start with a concise punchline, define the problem, present the solution, explain the business model, highlight team strengths, and conclude with a clear, actionable request.
- Effective communication requires brevity and clarity to overcome limited human attention spans, which are often compared to those of a goldfish.
- Pitching success depends on tailoring the message to the specific audience and context rather than relying on a single, universal presentation.
Games pitching war stories
Securing investment in the video game industry requires a departure from traditional tech startup models, shifting the focus from solving specific functional problems to demonstrating entertainment value, team capability, and distinct market positioning.
- Investors prioritize the development team's track record and vision over rigid product roadmaps due to the inherent volatility of game development.
- Successful pitches require tangible proof of concept, such as high-quality gameplay footage or a functional, polished prototype, rather than relying on verbal descriptions.
- Developers must articulate a unique value proposition that clearly differentiates their project within the saturated global market to establish credibility.
Games mergers and acquisitions market 2017 – Recap and predictions
The games industry mergers and acquisitions (M&A) market experienced a record-breaking year in 2016, with $24.1 billion in announced transactions.
- The 2016 games M&A market reached a record $24.1 billion in announced transactions, with large-scale deals consistently accounting for over 80% of the total annual volume.
- Large public-market acquisitions currently command average valuation multiples of 3.2x revenue and 10.3x EBITDA.
- Smaller private studios typically receive lower upfront valuations of 1.6x revenue, though performance-based earn-outs can increase these multiples to 3.7x.
Unlocking capital for your studio in a mature market
The mobile gaming industry currently operates within a mature market characterized by consolidation rather than a high volume of new entrants.
- Investors are prioritizing studios with proven live operations, genre-specific expertise, and sustainable cash flow over those seeking funding for user acquisition on unproven titles.
- Studios should prioritize deep specialization in a single genre over broad diversification, as high-level proficiency is the primary driver of investor interest in a consolidated market.
- Selling legacy or underperforming titles to larger publishers allows studios to generate non-dilutive capital for new development while offloading the operational burden of older games.