Aream & Co

The global video game industry experienced a period of divergent performance during the second quarter of 2026, characterized by a resilient PC sector and a stagnant console market. While Steam sustained a 13 percent year-over-year growth trajectory, console revenues remained flat as the successful launch of the Nintendo Switch 2 balanced out declines in PlayStation and Xbox hardware sales. Conversely, the mobile gaming segment faced significant headwinds, marked by a 4 percent contraction in gross revenue and a 12 percent decline in new installs. This mobile stagnation is compounded by a lack of innovation in top-grossing charts, which remain dominated by legacy titles released more than four years ago.

Financial activity within the sector showed signs of a robust recovery, with 54 merger and acquisition transactions deploying $2.3 billion in capital. Private investment experienced a dramatic sixfold year-over-year surge, totaling $3.1 billion, driven largely by mega-rounds focused on artificial intelligence, adtech, and immersive hardware. This shift in investment strategy reflects a broader trend where capital is increasingly concentrated in infrastructure and enabling technologies rather than traditional content-focused development.

Despite this transactional health, public gaming equities remain under significant pressure, suffering from double-digit year-to-date declines and compressed valuation multiples. Investors are prioritizing profitability and sustainable growth, favoring large-cap publishers that demonstrate resilience in a volatile equity environment. While early-stage venture activity persists, the industry continues to undergo widespread consolidation through strategic divestments and M&A, signaling a transition toward a more mature, efficiency-focused market landscape.

The gaming industry experienced a period of stabilization and strategic realignment in the second quarter of 2026, characterized by a resurgence in public market activity and a significant surge in private investment value. While the total value of mergers and acquisitions declined compared to the previous quarter, the volume of deals reached 54, the highest count since 2022. Public market activity also hit a two-year high, with 25 deals closing for a combined $1.7 billion, bolstered by notable IPOs such as Liftoff.

Private investment reached a two-year peak of $3.1 billion, largely driven by a $1 billion round for AppsFlyer and substantial capital inflows into artificial intelligence technology. Despite this high-level investment, early-stage funding for pre-seed and seed rounds fell to a multi-year low of $0.1 billion, while Series A rounds reached a five-year high of $0.8 billion. This indicates a shift in investor focus toward established tech infrastructure rather than direct game content development.

The mobile gaming sector faced headwinds, with in-app purchase revenue falling to $19.4 billion—the lowest level since the third quarter of 2023—and total installs hitting a five-year low of 11.3 billion. Conversely, the PC and console markets showed resilience; Steam revenue continued to grow at double-digit rates, and the console market saw a 3% year-over-year increase, significantly aided by the launch of the Nintendo Switch 2. Despite solid revenue growth across many firms, gaming stocks generally underperformed compared to broader indices like the Nasdaq, reflecting a trend of valuation compression across the sector. Data for this analysis was compiled by InvestGame, with additional insights provided by Sensor Tower and Alinea Analytics.

This report is provided for general information and discussion purposes only and is intended solely for subscribers. It does not constitute a financial promotion, investment advice, or a recommendation to engage in any investment activity. The content reflects the views of the authors at the time of publication and may be subject to change without notice.

The survey, conducted by Aream & Co., gauges executive optimism regarding consumer spending on gaming in 2025 across multiple channels and functional areas. Overall, 49 % of respondents view spending as “more optimistic,” another 49 % see it as unchanged, and only 2 % are less optimistic. When broken down by platform, mobile spending is perceived as more optimistic (49 %) while PC and console views are split between “more” (15–33 %) and “about the same.” In‑app purchases are viewed as more optimistic (80 %) versus in‑app advertising (41 %).

Key challenges identified include content saturation and over‑supply, with 33 % citing these as concerns; marketing environment issues affect 49 %, and macro conditions are a worry for 17 %. Despite these, 54 % anticipate more new games in 2025, and 37 % expect higher average budgets. Marketing spend is expected to rise for 48 %, while engineering and game development are seen as more optimistic (71 % and 42 %).

The survey also highlights a strong appetite for mergers and acquisitions, with 71 % expecting more M&A activity. Advanced integration across multiple functions is viewed as more optimistic (49 %) but limited implementation remains a concern.

The data derive from a global sample of gaming CEOs, reflecting perspectives across mobile, PC, console, and various functional departments. The findings suggest a cautiously optimistic outlook for 2025, tempered by supply‑side pressures and marketing challenges.

The fourth quarter of 2025 confirms a continued expansion of the global video‑game market, driven by robust performance across core platforms and a surge in ancillary services. PC sales on Steam rose 20 percent year‑over‑year, while console revenue posted a comparable increase, underscoring sustained consumer demand for both traditional and digital distribution channels. This growth is complemented by a rapid rise in rewarded‑app installations, which have compounded at a 42 percent annual rate from 2021 to 2025 and now support roughly 24 million monthly active users, reflecting the increasing monetisation of interactive micro‑experiences within mobile ecosystems.

Investment activity in the early‑stage gaming sector remains tightly concentrated among a small cohort of venture firms. Airoclip led the market in deal volume with ten transactions, whereas Catalyst deployed the greatest capital, allocating $146 million across its portfolio. Other notable participants—Griffin, Arcadia and Laton—maintain a significant but secondary presence, indicating a market where capital is funneled toward a limited set of high‑potential developers and technology providers.

Overall, the data portray a video‑game industry that is not only expanding in traditional hardware‑driven segments but also diversifying through mobile reward mechanisms and focused venture investment. The convergence of strong consumer uptake and concentrated financing suggests a trajectory of continued growth, with emerging opportunities concentrated in mobile micro‑transactions and early‑stage innovation pipelines.

The global video game industry experienced a notable resurgence in growth during the third quarter of 2025, driven by a rebound in mobile in-app purchases and robust performance across PC and console platforms. The launch of the Nintendo Switch 2 served as a primary catalyst for console sector strength, reinforcing the enduring value of established intellectual property. While the broader capital markets faced significant headwinds, characterized by multi-year lows in public fundraising and subdued early-stage venture activity, the industry’s transaction landscape was defined by high-value consolidation. The $55 billion public takeover of Electronic Arts stands as the definitive event of the period, signaling a strategic shift toward large-scale mergers and acquisitions as the primary mechanism for growth.

Market dynamics currently favor established entities, with diversified publishers and PC and console developers commanding significant valuation premiums due to their proven profitability and market stability. This environment has concentrated investment power among a select group of firms. BITKRAFT emerged as the most active participant in the early-stage ecosystem over the past twelve months, leading the sector with 16 deals totaling $113 million. Alongside other prominent investors like Bessemer Venture Partners and Menlo Ventures, these firms continue to deploy capital despite the broader contraction in private investment.

Ultimately, the industry is transitioning into a phase of maturity where scale and intellectual property ownership are paramount. While early-stage funding remains constrained, the surge in total transaction value through megadeals indicates that institutional confidence remains high for proven assets. The current landscape suggests a bifurcated market where high-growth, established publishers attract significant capital, while smaller, early-stage ventures face a more challenging environment for securing liquidity and growth funding.

The update delivers a comprehensive snapshot of the global video‑game ecosystem in the second quarter of 2025, emphasizing financial flows, consumer behavior and platform performance. It argues that the market is transitioning from pandemic‑driven expansion to a more differentiated growth pattern, with mobile spending stabilising at roughly $20 billion per quarter, while PC and console segments experience renewed vigor.

Quarterly consumer spend on mobile games remains flat, yet download volumes have slipped, contrasting with a 20 % year‑on‑year rise in Steam revenue powered by several high‑profile indie releases. Console dynamics are buoyant: Nintendo’s Switch 2 set a record launch pace, and PlayStation reported over 120 million monthly active users, marking its most profitable hardware cycle. M&A activity reached $6.2 billion, led by the Niantic sale and a private‑equity round in Dream Games, whereas private‑equity and late‑stage venture capital inflows fell to a five‑year low of $0.4 billion. Public offerings generated $4.2 billion, with equities trading near 52‑week highs; valuation spreads have widened, as PC/console firms trade above 15 times EBITDA while mobile peers sit at historic lows.

User engagement metrics show Fortnite sustaining 16 million concurrent users and Roblox 14 million, with Twitch delivering 2.2 billion hours watched. Creator payouts rose 25 % year‑on‑year, driven by major acquisitions in the UGC space. Financing trends reveal AI‑infrastructure startups accounting for 65 % of related deals, and debt providers now fund roughly 80 % of user‑acquisition capital, reflecting a shift toward non‑dilutive growth financing. The analysis draws on data from InvestGame, Sensor Tower, Alinea Analytics and company earnings, covering the period from 2020 through Q2 2025 across North America, Europe and Asia‑Pacific.

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 quarterly briefing delivers a concise assessment of the global gaming ecosystem during the first quarter of 2025, emphasizing activity trends, revenue dynamics, and merger‑and‑acquisition (M&A) patterns across the principal platform segments. It argues that, despite lingering macro‑economic pressures, the industry remains resilient, with growth driven by new content releases and strategic consolidation.

During the period, personal‑computer engagement surged, highlighted by Steam’s record‑high concurrent user count, while mobile spending rebounded by roughly three percent year‑on‑year, a recovery largely attributed to publishers operating in Asian markets. The console segment held steady, buoyed by anticipation of the Switch II launch and the forthcoming release of GTA VI, suggesting that flagship titles continue to anchor consumer demand across hardware categories.

M&A activity reached a two‑year peak, generating approximately $6.6 billion across 42 transactions, with mobile‑focused deals accounting for about $4 billion of that total. Strategic consolidators and private‑equity firms intensified portfolio reshaping, even as later‑stage private financing grew more constrained. Although the number of deals contracted by roughly sixty percent over the preceding six months, the aggregate upfront value remained robust, indicating a shift toward fewer but larger transactions.

Overall, the analysis concludes that the gaming market’s core segments are sustaining momentum amid tighter financing conditions, and that forthcoming hardware and software launches are likely to reinforce this stability. Stakeholders are advised to monitor the evolving deal landscape, where strategic scale