17 Jan — 23 Jan / 2022

Weekly News Digest #4


# of announced deals
announced deals’ size
# of closed deals

Hi everyone,

Just a quick reminder before we dive into this week’s digest: the Annual Gaming Deals Report 2021 is on its way, so make sure you follow us on Twitter, LinkedIn, and Telegram not to miss it. Also, if you enjoy the work we do, consider supporting us on Patreon.

Now to the news.

Microsoft acquires Activision Blizzard for $68.7B

US-based software giant Microsoft (NASDAQ: MSFT) has announced plans to acquire US-based multiplatform game developer and publisher Activision Blizzard (NASDAQ: ATVI) for $68.7B, inclusive of Activision Blizzard’s net cash. The deal value comes from a $95.00 price per share, paid fully in cash. Based on the ATVI’s closing share price on January 14, 2022, the transaction represents a 45% premium. The transaction is said to be accretive to non-GAAP earnings per share.

The transaction is still subject to the customary closing conditions, completion of regulatory review, and also approval by the Activision Blizzard shareholders. The deal is expected to be closed in the fiscal year of 2023. Microsoft and Activision Blizzard’s boards of directors have already approved the deal. After the transaction, Bobby Kotick will continue to lead the Company as the CEO of Activision Blizzard (at least until the deal is closed), while the management of Activision Blizzard will maintain their positions. As part of the deal, Microsoft has created Microsoft Gaming division, led by Phil Spencer, former head of Xbox division.

Strategic rationale

> Increasing Game Pass content capacity, and securing its development pipeline for the long-term period

For Microsoft this acquisition creates an opportunity to add a list of AAA games to its Game Pass (which has been reported to reach 25 million subscribers), such as Call of Duty series; World of Warcraft; Overwatch; Diablo series, and other IPs. Furthermore, Microsoft also obtains the experience and expertise of nearly 10,000 employees of Activision Blizzard, which could help them with both the current and new projects.

> Expansion into the rapidly growing mobile gaming segment

The deal also helps Microsoft to enter the mobile gaming market through all the three companies: Activision (Call of Duty: Mobile, co-developed with Tencent); Blizzard (Hearthstone, and potentially to be released in Q2’22 Diablo Immortal, co-developed with NetEase); and mobile games developer King, famous for its match3 series Candy Crush.

With this combination of portfolio and expertise, Microsoft can attract audiences from mid-core as well as from casual gaming segments.

> Intensifying metaverse ambitions

Combining Activision’s 119 million MAU in Q3’21 (most of the audience comes from the Call of Duty games series), King’s 245 million MAU in Q3’21, and Blizzard’s experience in developing and operating one of the most successful and oldest MMORPGs on the market, World of Warcraft, which still performs on a solid level (initially released in 2004), Microsoft could potentially use this acquisition as one of the key points to building its own version of the metaverse, which could cover almost all popular platforms and nearly any audience segment.

Activision Blizzard’s Financial Performance

After a significant drop in 2019 in terms of the overall financial performance, in 2020 the company showed a significant growth — Revenue reached $8.08B (+24.6% YoY) and Net Bookings increased to $8.4B (+32% YoY).

According to Activision Blizzard’s financial performance for the 2020 calendar year and forecasted results* for 2021, the transaction multiples are 2.5x EV/Revenue and 21.2x EV/Adj. EBITDA for 2020, and 7.9x EV/Revenue and 20.2x EV/Adj. EBITDA for 2021.

Overall, the acquisition of Activision Blizzard will not only solidify Microsoft’s position as the third-largest gaming company by Revenue after Tencent (SEHK: 700) and Sony (TSE: 6758), but will also, combined with the acquisition of ZeniMax Media, improve its positions in PC/console market, and provide an opportunity to vastly increase its Game Pass audience.

Despite the fact that this deal is the biggest ever for the gaming industry, we still believe that 2022 has every opportunity to surprise us yet again, with such strategic players in the gaming market as Tencent, NetEase, Sony, Electronic Arts, and Embracer, plus other non-gaming companies showing interest towards gaming, such as Amazon, Disney, and Netflix actively trying to capitalize on the biggest entertainment industry right now.

*Note: Revenue and Adj. EBITDA of 2021 are taken from S&P Capital IQ consensus as of Jan-24, 2021

This InvestGame Weekly Digest is supported by Hiro Capital, investors in the future.



Sweden-based gaming giant Stillfront has announced the acquisition of Hong Kong-based mobile games publisher 6waves. 6waves is a leading publisher of mobile F2P 4x strategy games in Japan. The upfront Purchase Price is $201m which will be paid 92% in cash and 8% in newly-issued Stillfront shares. The founders and key employees in 6waves may receive additional earn-out of up to 1.0x EBITDA for each of the financial years 2022-2025, paid 75 percent in cash and 25 percent in shares. The total earn-out is capped at a maximum of $100m. With this acquisition, Stillfront entered East Asia and significantly strengthened Stillfront’s presence in the Japanese gaming market. 6waves adds several top-grossing strategy titles to Stillfront’s portfolio and provides a platform with local expertise for further growth in East Asia.

US-based blockchain-powered games studio Mythical Games acquires a UK-based 3D streaming platform for metaverse Polystream. The financial terms of the deal are not disclosed. With this acquisition, Mythical wants to decentralize game publishing and remove the gap between blockchain and mainstream gaming. This is the first M&A activity from Mythical since its Series B round in Jun ’21.


Hong Kong-based blockchain-powered games developer and publisher Animoca Brands has raised $358.88m in a recent round of funding with a total valuation of $5B. The round was led by Liberty City Ventures with participation from the others. The funding will be used to fund strategic acquisitions and investments, product development, and licenses for popular IPs.

Turkey-based mobile games studio Dream Games has raised $255m in Series C funding at a $2.75B valuation. The round was led by Index Ventures with participation from others. This is the third funding round for the company since its Series A in Mar’21. Since then the company has increased the number of staff to 80 people and plans to add 120 more. Funding will go towards the company’s growth and development of new titles.

Turkey-based mobile games startup Spyke Games has raised $55m in Seed funding. The round was conducted by a single investor, Griffin Gaming Partners. Spyke plans to establish its position in the casual mobile gaming segment by using multiplayer functionality and other social elements.

South Africa-based social games publisher and developer Carry1st has raised $20m in Series A extension funding. Andreessen Horowitz led the round, with Avenir and Google participating as well. Funding will be used to expand the company’s content portfolio, grow its product and engineering teams, and attract new customers.

India-based mobile games and interactive entertainment company nCore Games has raised $10m in a recent round of funding. The round was led by Animoca Brands and Galaxy Interactive with participation from the others. The funding will be used towards expansion into the metaverse by launching its own NFTs and tokens.

Sweden-based blockchain-powered games developer ChromaWay has raised $10m in the recent round of funding. True Global Ventures 4 Plus led the round ($5m) with participation from other investors. ChomaWay is known for its GameFi projects like My Neighbor Alice ($ALICE) and Mines of Dalarnia ($DAR). The funding will go towards the company’s growth.

Vietnam-based blockchain-powered P2E startup Ancient8 has raised $4m in Seed funding. The round was led by Dragonfly Capital, Pantera Capital, and Hashed with participation from others. The funding will be deployed to the Decentralized Autonomous Organization (DAO) for community members to learn about developments in GameFi and build more GameFi tools.

Hong Kong-based esports platform Yesports has raised $2.25m in Seed funding. Polygon Studios, Alphabit, Kernel Ventures, and others participated in the round. The funding will be used for the development of the NFT-based esports marketplace and the esports-focused metaverse.


Cayman Islands-based crypto trading platform BitMart announced a $50 million GameFi fund to invest and incubate GameFi and NFT-related projects. The fund is also aiming at developing more quality projects in terms of marketing, operations, trading, and more.