Europe’s Gaming Consolidators: The Magnificent Seven Post-M&A Rush
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Consolidators:
The Magnificent
Seven Post-M&A Rush
#6
FEATURE BY
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FEATURE BY GDEV
Introducing the Magnificent Seven: Europe’s leading consolidators who transformed the gaming landscape by deploying
$19B in capital across more than 140 M&A deals.
COMPANY
# OF DEALS
NOTABLE STUDIO ACQUISITIONS
SELECT EUROPEAN ACQUIRERS (2020 – 2024 YTD)
78
$14.1B
12
$1.8B
7
$1.7B
23
$0.7B
5
$0.5B
7
$0.2B
8
$0.1B
DEAL VALUE
HQ
Source: InvestGame; Company quarterly earnings reports; press releases
3
TOP-10 LARGEST ACQUISITIONS OF SELECT EUROPEAN STUDIOS BY UPFRONT VALUE, 2020-2024 YTD
TARGET
ACQUIRER
TARGET HQ
DEAL DATE
UPFRONT EV
MAX EARNOUT
Mar’22
$3,145m
$453m
Apr’21
$640m
$125m
Nov’24
$620m
$200m
Apr’21
$363m
$1,378m
Jul’21
$360m
$150m
Jan’21
$300m
$100m
Aug’22
$300m
–
Dec’20
$275m
$100m
Dec’20
$300m
–
Oct’21
$205m
uncapped
Source: InvestGame
FEATURE BY GDEV
Reported YoY revenue growth of key players during the M&A boom and beyond, highlighting how acquisitions reshaped
businesses of select European video game publishers.
4
ANNUAL REPORTED REVENUE (CY), $m
Source: Company quarterly earnings reports; press releases
FEATURE BY GDEV
Looking closer at organic revenue growth reveals a stark contrast to the reported numbers. Only a few companies have
maintained a positive trajectory without heavily relying on M&A.
5
ORGANIC REVENUE YoY GROWTH, %
Source: Company quarterly earnings reports; press releases
FEATURE BY GDEV
Evolution of AEBITDAC (adjusted EBITDA minus CapEx) over time. PC & Console AA/indie publishers placed risky bets on
budget-heavy projects, many of which failed to deliver expected returns, leading to declining profitability in recent years.
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ADJUSTED EBITDAC*, $m
Note: (*) AEBITDAC = Adj. EBITDA – CAPEX
Source: Company quarterly earnings reports; press releases
FEATURE BY GDEV
European acquirers’ aggressive inorganic growth strategies during extended periods of low interest rates have failed to add
long-term value for shareholders, with most stocks losing liquidity and investor interest.
7
STOCKS’ PRICE INDEX (DECEMBER 2019 = 100%)
Note: SF group had 10:1 stock split in Dec’20.
Source: LSEG; Yahoo Finance.
FEATURE BY GDEV
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Now totaling $5.4B after a significant rollercoaster involving a ~4x decrease in value, the market capitalization saw most
stocks ultimately gain positively due to share issuances used to finance acquisitions.
AGGREGATE MARKET CAP, $B
Source: LSEG; Yahoo Finance
FEATURE BY GDEV
9
EV / NTM EBITDA, x
Driven by an influx of “cheap” capital, investors’ appetite and forward valuation multiples peaked during 2020 bull market.
Followed by “hangover” period where aggressive M&A strategies lost favor, shifting the focus to profitable organic growth.
EV / NTM REVENUE, x
Source: LSEG; Yahoo Finance
FEATURE BY GDEV
Struggling to deliver positive returns, many European public companies have seen leadership turnovers and layoffs, with
some pursuing divestments and announcing restructuring efforts aimed at unlocking value and driving profitable growth
acquired by EQT, CPP
Investments, Temasek
10
Company
PERFORMANCE SUMMARY OF SELECT COMPANIES OVER 2019 – 2024 YTD
Revenue
CAGR, %
Source: InvestGame; Company quarterly earnings reports; press releases
Avg. organic
growth, %
AEBITDAC
CAGR, %
Strategy
announcements
M&A
value, $B
49.3%
9.2%
57.4%
$14.1B
●
over 8,000 layoffs
●
restructuring 2023
●
CFO change 2024
28.8%
3.0%
25.6%
$1.8B
●
limited layoffs
●
restructuring 2024
●
CEO change 2024
5.1%
-3.7%
37.2%
$1.7B
●
limited layoffs
●
strategic review 2019
●
CEO/CFO changes 20/24
21.3%
12.0%
23.4%
$0.7B
●
limited layoffs
●
restructuring 2024
●
CEO/COO changes 2021
66.6%
n.a.
n.a.
$0.5B
●
studio layoffs
●
restructuring 2023
●
CEO change 2021
24.8%
n.a.
-19.3%
$0.2B
●
~140 layoffs
●
restructuring 2023
●
CEO/CFO changes 23/24
21.0%
n.a.
n.a.
$0.1B
●
Layoffs
●
restructuring 2024
●
CEO change 2024
Major divestments
Share price
change, %
(17%)
(79%)
(11%)
+1%
(adjusted for
takeover bid)
(30%)
(38%)
(17%)
FEATURE BY GDEV
