Gaming Deals Activity Report H1’22
Download PDFJul, 2022 In collaboration with
Gaming Deals Activity
Report
STRONG START ̶ AND
CHALLENGING FUTURE
H1ʼ22
Supported by
Executive Summary H1’22
$
43.3B
value of 455 deals (closed)
$
113.6B
value of 468 deals (closed + announced)
Total
By Deal Type
Value of Closed Deals*, $m
By Target Sector
Number of Closed Deals*
Note: (*) announced transactions are not included in the
charts and graphs; see Methodology & Glossary (p. 22)
2
It should be noted, however, that almost 71%
of the deal value in H1’22 was contributed
by 5 mega-deals, including Zynga, Asmodee,
Nintendo, Playtika, and Sumo Group.
Private deals continue breaking the records —
almost $8B value raised across 316 deals
in H1’22, highlighting strong investors’
firmness
in Gaming business even during the current
turbulent times. 34% of all Private deals total
value came from Blockchain- associated
placements ($2.7B across 163 deals) in
comparison to 10% in H1’21 ($489m), and 2%
in H1’20 ($22m).
Public markets continue to perform poorly
since the beginning of 2022, demonstrating
a 4x shrink in the deal value ($4.3B vs. $17.1B)
and a 4x decrease in the number
of transactions (13 vs. 56), compared to H1’21.
Above mentioned macroeconomic environment
and gaming market specific challenges put
pressure on the gaming stocks, with all this
likely to result in a general aversion to all forms
of public offerings till the end of 2022, with
public listings (IPOs or SPACs) being
hit the hardest.
Executive Summary H1’22
$
31.0B
value of 172 closed deals
$
99.8B
value of 180 deals (closed + announced)
Gaming only
3
The first half of 2022 may be described
as somewhat contradictory: Gaming industry
has started out strong and brought some new
records in the investment activity, but it has
also seen market’s growth correction and
weak financials results of many gaming comps
in Q2’22. In addition to the macroeconomic
challenges, the market has been largely
impacted by post-pandemic performance
lagging, multiple release dates shifts, and
post-IDFA adaptation.
Overall, H1’22 have seen 455 closed deals
with the total deal value of $43.3B, or $113.6B
including announced but not yet closed deals
— a new record for the industry, beating last
full year ’s total closed and announced deal
value of $80.4B.
M&A activity in H1’22 has been characterized
by the decreasing number of deals (–21%
YoY), with only 126 closed deals (vs. 159 deals
in H1’21) and growing deal value (+36% YoY)
which reached $31.1B, excluding the
announced deals (e.g., the acquisition
of Activision Blizzard by Microsoft for $68.7B).
The Gaming segment took the leadership
in driving deal activity, occupying 72% of the
total value ($31.0B) across 172 closed deals.
The segment’s growth was greatly amended
by such newsmakers as the $12.7B Zynga
acquisition by Take-Two, Saudi Arabia’s PIF
buying 5.01% of Nintendo for $2.7B, Take-Two
pricing of $2.7B senior notes, Joffre Capital
buying 25.7% of Playtika shares for $2.2B, and
Epic Games raising $2.0B from Sony and The
Lego Group, among others.
The Top-15 Strategic Investors showed
an outstanding performance in terms of the
announced deal value, with a total value
of $97.7B (vs. $21.4B in H1’21), leading
to a 4.5x growth; the total number of deals saw
a notable decrease of 45%, from 104 deals
in H1’21 to only 57 deals in H1’22. Sony led the
list with 8 closed deals and the total value
of $5.7B, with the two remarkable deals: the
acquisition of Bungie for $3.6B, and the
participation in the Epic Games $2B round.
Executive Summary H1’22
The Top-15 VC funds have all together
injected over $3.6B into Gaming industry
companies, throughout 170+ deals (vs. $1.1B
across 60+ deals in H1’21). The top spot
is yet again reserved by BITKRAFT Ventures,
with $369m invested throughout 33 deals,
out of which the fund led 18. They are
followed by Andreessen Horowitz ($608m
across 11 deals) and Makers Fund ($494m
across 14 deals).
Blockchain gaming continues seeing positive
YoY growth metrics: the Q2’22 total deal
number was up 4x YoY (80 vs. 20), while the
total deal value was at 2.7x YoY ($1.08B
vs. $406m). While the above showcases the
continued investor interest in the potential
future of the blockchain enabled business
models, the QoQ growth metrics were down,
indicating the continuation of the 2022
market correction we predicted in the last
report
. The biggest Q1’22 deals were
Improbable Worlds $150m Series B+, Sky
Mavis bail-out $150m Series B+, and GEMS
$55m combined Seed and Series A. Deal
sizes are also clearly dropping.
$
23.5B
value of 81 closed deals
$
92.3B
value of 88 deals (closed and announced)
Gaming M&As only
4
Despite that, in H1’22 the Gaming sector
showed growth of 12% and reached $23.5B
across 81 deals (vs. $20.9B across 100 deals
in H1’21);
the total share of Gaming sector
in the overall deal value decreased from 91%
in H1’21 to 75%
(–17%). The Other segment
(see Methodology & Glossary, p.22) contributed
14% (vs. 1.9% in H1’21) across 6 deals with
the total value of $4.4B, with 2 mega-deals
here being Asmodee acquisition by Embracer
for $3.1B, and SteelSeries acquisition by GN
Store Nord for $1.2B. The Platform & Tech
segment holds the third place in terms of the
deal value with the total value of $1.8B (vs.
$1.5B in H1’21), while Esports takes fourth
place, with the total value of $1.5B (vs. 58m in
H1’21), contributing 4.9%.
Even with such a noticeable decrease in the
number of deals, witnessed in H1’22, it’s too
early to say that the negative trend will
continue, as the most active M&A players,
including Embracer, Sony, and Microsoft, are
still eager to keep on going with their M&A
strategy; the new players, such as PIF
(incl. Savvy Gaming Group), will probably
continue it’s aggressive M&A activity further
in 2022.
deals value
However, even with such a tremendous rise,
it should be noted that almost 71% of the
deal value in H1’22 was contributed by
5 mega-deals: Zynga acquisition by Take-Two
Interactive ($12.7B); Embracer Group
acquisition of Asmodee ($3.1B); Saudi
Arabia’s Public Investment Fund (PIF)
purchase of a minority stake in Nintendo
($2.7B); Joffre Capital purchase of a minority
stake in Playtika ($2.2B), and Sumo Group
acquisition by Tencent ($1.3B).
M&A activity in H1’22 achieved
controversial results
. On the one hand,
we witnessed a decreasing interest in the
M&A activity in terms of the deal number
,
with only 126 closed deals (vs. 159 deals
in H1’21), showing a decrease of 21%. On the
other hand, even without the announced back
in Jan’22 Microsoft acquisition of Activision
Blizzard for $68.7B, M&A activity reached
a new high of $31.1B deal value (vs. $22.9
in H1’21), showing a growth of 36%.
M&A Activity
Closed M&As in the Video
Games Industry
number
of deals
5
Early-stage VC placements have taken
up 38% of the total deal value ($3B)
across
257 deals (81%), showing a significant share
growth of the segment (vs. 26% in H1’21, and
27% in H1’20, respectively) — more capital
is now allocated into Gaming industry through
earlier stages. H1’22 also saw the outstanding
Seed round of $450m, raised by Yuga Labs,
and led by a16z.
As 2022 has come to the end of its first half,
Private deals have again broken the records:
316 deals of $7.9B total value
, meaning a
steady powerful growth of 1.6x vs. H1’21
($4.8B), and 5.5x vs. H1’20 ($1.4B). H1’22
also performs stronger than the last two
quarters of 2021 ($7.2B across 282 deals),
which indicates investors’ continuing
firmness
in Gaming business even through the current
turbulent times.
Private Investments in the Video
Games Industry
Private Investment Activity
Late-stage deals accounted for 33% of the
total deal value ($2.6B)
across 27 deals,
representing an ongoing decline in the category
share (with 64% in H1’21, and 71% in H1’20,
respectively). The Late-stage activity has
slowed down a bit (–17% vs. $3.1B in H1’21)
across pretty much the same number of deals
(27 vs. 28); with the biggest deal being Coda
Payments $690m Series B+ round.
Corporate placements represent 29% of the
total Private deals value ($2B+)
, all thanks
mostly to the biggest Private round of H1’22,
Epic Games $2B raise from Sony and KIRKBI
(The Lego Group) in April.
34% of all Private deals total value came from
Blockchain-associated placements
($2.7B
across 163 deals); compare this to 10%
in H1’21 ($489m), and 2% in H1’20 ($22m).
deals value
number
of deals
6
Public markets
continue to perform poorly
since the beginning of 2022, demonstrating
a 4x shrink in the deal value and
a 4x decrease in the number of transactions,
compared to H1’21.
Nevertheless, Q2’22 has seen some
light
improvement vs. Q1’22
, with Take-Two
selling $2.7B senior notes, and Embracer
receiving $1B from issuing shares to Savvy
Gaming Group.
deals value
The negative trend is clear when we look at the
number of companies going public since the
beginning of the year:
— Azerion (via SPAC) and Skonec Entertainment
(via IPO in Korean stock market).
— Recently announced FaZe Clan (via SPAC),
finishing 25% down on its debut trading day.
Macroeconomic changes have clearly
altered the
investing climate
across public markets and
gaming stocks, in particular. Moreover,
decreasing
user acquisition spending in the post-IDFA era,
post-pandemic changes in the consumer
consumption, and massive delays in AAA-games
releases put additional pressure on the gaming
stocks.
All of the above mentioned is likely to result
in
a general aversion to all forms of public
offerings
till the end of the year, with public
listings (IPOs or SPACs) being hit the hardest.
It is unclear when the next IPO window will
reopen.
Public Offerings in the Video
Games Industry
Public Offerings Activity
number
of deals
7
Rank*
Venture Capital Fund
# of Deals
Total Deal Value**, $m
# of Leading Deals
Lead Deals Value**, $m
Selected Lead Deals
1
BITKRAFT Ventures
33
369
18
169
Lightforge Games, GGWP, Inworld Ai
2
Andreessen Horowitz
11
608
9
574
Yuga Labs, Pahdolabs, Metatheory, Alta
3
Makers Fund
14
494
6
75
Ancient8, MetaKing Studios, Studio 369
4
Griffin Gaming Partners
22
298
4
119
Spyke, N3TWORK, SuperTeam Games
5
Galaxy Interactive
22
292
5
36
Ncore, Gadsme, Mirror World, NEKOM
6
Play Ventures
13
100
9
27
Original Games, Block Tackle
7
Index Ventures
3
300
3
300
Dream Games, Backbone, Bit Odd
8
Hiro Capital
7
194
4
117
FRVR, Incredibuild, Machinations
9
Konvoy
7
70
5
45
Gamefam, Solsten, Sanlo, Pok Pok
10
Sequoia Capital
8
584
2
44
Galaxy Fight Club, BUD
11
vgames
12
43
8
12
Candivore, InnPlay, Octoplay, Day2 Games
12
Tiger Global
6
185
2
104
PortalOne, Metafy
13
GEM Capital
7
15
7
15
HypeMasters, Game Garden, Vestan
14
Sisu Games Ventures
13
55
5
4
Roleverse, Extra Dimension Games
15
The Games Fund
5
12
5
12
HypeMasters, Made on Earth Games
Note: (*) including recently announced and unclosed transactions; (**) based on the internal
weighted average ranking system, this rating reflects most active strategics, thus the deal value
alone does not guarantee the top spot — the number of deals is substantial too.
Top-15 VC Funds
Note: (*) based on the internal weighted average ranking system;
(**) based on investments with the disclosed deal value
8
The acquisition of Asmodee for $3.1B, and
the acquisition of three studios from the
Square Enix — Crystal Dynamics,
Eidos-Montréal, and Square Enix Montréal —
for the total value of $300m, plus other
2 deals, helped Embracer take fourth place.
Microsoft, with its mega-deal
of an acquisition of Activision Blizzard for
$68.7B, took the fifth place.
While the total number of deals showed
a significant decline due to the current bear
situation on public markets and, as a result
of that, lower market multiples, we continue
to believe that in the second half of the year
the most active strategic investors, such
as Sony, Tencent, and Embracer will catch
up with the pace; this, as well as a continued
interest from the MENA investors, could
possibly lead to some more remarkable deals
by the end of 2022.
In H1’22, the
Top-15 Strategic Investors
showed an outstanding performance
, with
a total value of $97.7B (vs. $21.4B in H1’21),
showing a 4.5x growth; meanwhile, the total
number of deals saw a notable decrease
of 45%, from 104 deals in H1’21 to only
57 deals in H1’22.
Sony led the list with 8 closed deals and the
total value of $5.7B, with two remarkable
deals: the acquisition of Bungie for $3.6B,
and the participation in Epic Games $2B
round.
The first strategic Gaming investor from the
MENA region, Saudi Arabia’s Public
Investment Fund (PIF), with its subsidiary
Savvy Gaming Group, takes up second place
and continues actively investing in the
Gaming industry: during H1’22, it took part
in 7 transactions, with the total amount
of $6.4B, including investments in 5 public
gaming companies.
Tencent, with the total deal value of $1.4B
across 10 deals, including the acquisition
of Sumo Group, took the third place.
Note: (*) including recently announced and unclosed transactions; (**) based on the internal
weighted average ranking system, this rating reflects most active strategics, thus the deal value
alone does not guarantee the top spot — the number of deals is substantial too.
Top-15 Strategic Investors*
9
Rank**
Strategic
Investor
# of deals
Disclosed
Value, $m
Deal Type
Investment
Focus
1
Sony
8
5 700
M&As,
Corporate
PC & Console,
Tech
2
Saudi PIF (incl.
Savvy Gaming
Group)
6
3 735
M&As,
Corporate
PC & Console,
Esports
3
Tencent incl.
subsidiaries
10
1 463
M&As,
Corporate
PC & Console,
Mobile
4
Embracer
Group
6
3 400
M&As
PC & Console,
Mobile, Board
5
Microsoft
1
68 700
M&As
PC & Console
6
Take-Two
Interactive
1
12 700
M&As,
Corporate
PC & Console,
Mobile
7
AppLovin
2
1 050
M&As
Tech, Mobile
8
Team 17
3
217
M&As
PC & Console
9
Kakao Games
3
132
Corporate
PC & Console,
Mobile
10
Nexters
3
125
M&As
Mobile
11
Krafton
5
89
M&As,
Corporate
Mobile, Tech
12
Overwolf
3
33
M&As,
Corporate
P2E, Tech
13
Ubisoft
3
24
Corporate
PC & Console,
P2E
14
Stillfront
Group
1
301
M&As
Mobile,
PC & Console
15
Nacon
2
61
M&As,
PC & Console
Note: (*) including recently announced and unclosed
transactions; (**) based on the internal weighted average
ranking system, this rating reflects most active strategics, thus
the deal value alone does not guarantee the top spot — the
number of deals is substantial too.
$68.7B
$883m stake in Feb’22
$3.1B
$12.7B
$3.6B
+
+
H1’22 Largest Announced /
Closed M&A Transactions
+
+
$332m stake in Feb’22
$2.7B stake in May’22
$235m stake in Mar ’22
$1.05B
$450m
10
When it comes to mixed and women-led
companies, gender diversity across
54 companies is represented the following
way: 57% of all companies are in the Gaming
segment, Platform & Tech takes the second
place with 41% across 22 companies, while
in Other, there is only one company —
US-based gaming agency Loaded, which
raised $20m back in Apr ’22.
For the first time in our Report, we have
collected data about the founders of the
companies that took part in the closed deals
in the context of gender diversity.
Across 436 companies, 88% of all founders
are men. Mixed genders are holding second
place with 10% (43 companies). Women-led
companies took third place, with 3%
in 11 companies.
Gender Breakdown
Gender Diversity
11
11
The US-based companies accounted for 30% of all companies
with mixed and women-only founders, while UK-based 6
companies contributed 11%; Turkey holds the third place,
with 4 companies.
With the current stats, it’s hard to predict the future trends
so far, but we will continue gathering data to evaluate gender
diversity based on the full-year data.
*To our best knowledge, no companies in H1’22 were led
by non-binary, or gender-neutral founders, or by person
of other genders. If we did make a mistake, however, please
let us know at
digest@investgame.net
.
Gaming Companies
Overall, given the current market narrative and
YTD performance,
high levels of the Gaming
investment activity seen in 2021 would
be pretty difficult to replicate
this year.
However, we see multiple
positive trends
supporting the development of investment
activity
, with 2022 results expected to surpass
2020 figures:
— Gaming VCs sitting on record levels of dry
powder, given massive fundraising waves over
the last years.
— Corporate activity remaining strong and less
likely to pull back from the venture market.
Through the first half of 2022,
Gaming
investment activity has been incredibly
robust in terms of attracted capital
, staying
on the same level as in H1’21 ($4.6B),
whereas the number of deals has almost
halved (85 vs. 163).
— Strong performance of Q2’22 has been
largely driven by a $2B Corporate round
raised by Epic Games, $1B PIPE by Embracer,
and $0.25B raised by Probably Monsters.
— The Top-3 deals combined accounted for
93% of the total deal value.
Gaming: Investment Activity
H1’22 has seen
same as previous year H1’21
activity trends across platforms
:
— Mobile gaming studios continue to drive
most of the transactions in Gaming segment
(45% of deals), followed by Multiplatform
comps attracting most of capital (70%+
of value), with Epic Games contributing the
most ($2B in H1’22; $1B in H1’21).
As usual,
US-based companies are leading
the charts
by deals closed and amount raised,
followed by UK
— both geos
continue to
show sustainable performance
. Whereas
Turkey (#3) activity has notably declined
(8 deals in H1’22 vs. 22 in H1’21).
H1’22: Deal Value, $m
Investment Activity* in the
Gaming Sector
Note: (*) Investment Activity includes Private
Investments and PIPE, Other
corporate
number
of deals
13
With the poor performance of Public listings
in H1’22 (only 2 closed deals
for the total
amount of $83m vs. 11 deals with the value
of $5.1B in H1’21), M&A deals have became
almost the sole contributor to the Exit
activity,
with the significant change in the overall
share: from 80.3% ($20.9B) in H1’21, to
99.6% ($23.4B) in H1’22.
Despite such mega-deal as the acquisition
of Zynga by Take-Two Interactive for $12.7B,
as well as a relatively active M&A activity,
H1’22 Gaming Segment showed a slight
decrease in the closed deal value
of $23.6B
vs. $26.0B (–10% YoY), and
a significant
decrease in the total number of deals:
83
vs. 111 (–25% YoY).
Gaming: M&A and Exits Activity
In H1’21 we saw a pretty equal proportion
of contribution between the PC & Console and
Mobile segments (43.7% vs. 50.2%), though
in H1’22 we noticed a substantial shift, as the
Mobile segment contributed 67% of the total
deal value ($15.8B vs. $13.1B in H1’21) across
25 deals (vs. 35 deals in H1’21). Meanwhile,
PC & Console took up second place and
contributed 20% ($4.7B vs. $11.4B in H1’21)
in 30 deals (vs. 49 deals in H1’21). Finally, the
Multiplatform segment share showed
a noticeable growth, from 5.6% ($1.4B)
in H1’21
to 12.7% in H1’22 ($3B).
Even with the obvious poor performance
of Public Offerings, which probably won’t have
any positive changes until the end of the year,
M&A activity has almost offset this decline in the
deal value, compared to H1’21, and thus, could
potentially overcome the results of H2’21. Saudi
Arabia’s Public Investment Fund (PIF) continues
its mighty M&A activity ($4.9B across 5 deals),
while other strategic investors, including
Microsoft, Tencent, and Embracer Group, who
may potentially catch up with 2021 pace, will be
the main drivers of M&A activity in Gaming
segment, — and this just might lead us to
another record-breaking year.
Exits* in the Gaming Sector
deals value
number
of deals
Note: (*) Exits include M&As, direct listings, SPACs, and IPOs
14
number
of deals
By the end of the first half of 2022, we’ve
seen
25 Late-stage VC and Corporate deals,
with a total disclosed value of $2.8B
. This
represents a 1.2x growth in the deal value
vs. H1’21 ($2.3B across 55 deals), and
a whopping 7x leap against H1’20 ($407m
across 17 deals). The average disclosed deal
value also increased, with $190m on average
in H1’22 beating $114m back in H1’21, and
$45m in H1’20.
Q2’22 has dramatically changed the picture for
the category, as Epic’s $2B round happened
in April. Leaving that one aside, Q2’22 saw
9 deals of $99m disclosed value (a 7.5x
decrease vs. $746 in Q1’22).
As in H1’21,
Multiplatform segment has again
snatched up the first place with $2.2B
(77%
of the total deal value, vs. 82% and $1.9B
in H1’21), with Mobile coming in second, with
$581m (20%, vs. $278m, or 12% in H1’21).
Gaming: Late-stage VC & Corporate
The top-3 placements have taken up 85%
of the category deal value
:
— The already mentioned US-based Epic Games
$2B funding by Sony and KIRKBI, with each
party investing $1B respectively, bringing the
company’s valuation at $31.5B.
— Turkey-based Dream Games closing $255m
Series C round back in January, led by Index
Ventures, bringing the company’s valuation
to $2.75B.
— US-based Thatgamecompany $160m Series
B+ round from TPG and Sequoia back in March.
H1’22: Deals Value, $m
Late-stage VC & Corporate Activity in the Gaming Sector, $m
late-stage
corporate
15
36 Seed rounds were closed with a total
amount of $157m (vs. 70 deals of $216m
in H1’21), while 22 Series A rounds amounted
for $635m, or 80% of the total Early-stage deal
value (vs. $352m across 22 deals, or 62%
in H1’21).
The PC & Console segment has taken up the
first place with $358m (45%) raised across
15 deals (vs. just $43m across 15 deals
in H1’21); it has overtaken the Mobile segment,
which raised $236m (30%) throughout 27 deals
(vs. $296m throughout 45 deals in H1’21).
Multiplatform came in third, with $176.5m
(22%) raised across 11 deals (vs. $187m across
24 deals back in H1’21).
As we’ve mentioned earlier,
H1’22
Early-stage placements have become more
capital concentrated
, with 58 deals bringing
in $792m, vs. 92 deals of $568m total value
back in H1’21. This represents a 39% YoY
rise
in the deal value, and a –37% fall in the
number of deals. This also means that
the
average check has significantly increased
in H1’22, with Seed investments rising 41%
($4.92m per round vs. $3.5m in H1’21), and
Series A jumping up 80% ($31.7m per round
vs. $17.6m in H1’21).
Gaming: Early-stage VC
Early-stage Investment Activity in the Gaming Sector, in $m
The top 4 deals with the total deal value of
$441m have contributed 56%
of all H1’22
value, including ProbablyMonsters $250m
Series A, led by LKCM Headwater
Investments, Frvr $76m Series A led by Hiro,
PortalOne $60m Series A led by Tiger Global,
and Spyke $55m Seed round, led by Griffin.
The US market is yet again the most
attractive one for investors
, with $460m
(58% of the total deal value) raised across
18 deals (vs. $165m, raised across 23 deals
in H1’21). Portugal, somewhat surprisingly,
came in second, with $77.5m (10% of all
value) raised throughout 2 deals, thanks
to the Frvr $76m deal.
number
of deals
deals value
16
Blockchain
Gaming
We continue to see positive YoY growth metrics in
blockchain gaming
: the Q2’22 total deal number was up 4x
YoY (80 vs. 20), while the total deal value was at 2.7x YoY
($1.08B vs $406m).
While the above showcases the continued investor interest
in the potential future of the blockchain-enabled business
models, the QoQ growth metrics were down, indicating the
continuation of the 2022 market correction we predicted
in the last
report
.
The total deal number for Q2’22 was down –11% QoQ (80
vs. 90), while the total deal value was down –34% QoQ
($1.08B vs $1.63B).
The biggest Q2’22 deals were Improbable Worlds $150m
Series B+, Sky Mavis bail-out $150m Series B+, and GEMS
$55m combined Seed and Series A. Deal sizes are also clearly
dropping.
Blockchain Gaming Deals
Blockchain Gaming Deals in the
Video Game Industry**
deals value
number
of deals
Note: (*) the following analysis has been provided by Naavik consulting firm, based on
the InvestGame data; (**) only closed deals are reflected in the graphs
18
But it will be interesting to see how
Improbable goes about licensing
its technology to more Web3 metaverse
companies. Read more about Yuga Labs and
Improbable
here
.
One interesting company that raised a $50m
Series A was GEMS. They describe
themselves as ‘a one-of-a-kind ecosystem
designed to be the ultimate, one-stop gaming
destination, connecting crypto and esports
gamers’. See their pitch deck
here
.
It’s a pretty ambitious and creative vision, but
not only are quality crypto games far on the
horizon, but also crypto games that can
become well established esports are even
further. We’re skeptical about who exactly
will
inhabit those 23 Esports player friendly
hotels of GEMS, but time will tell.
One investment that definitely skews the
overall deal data is Sky Mavis $150m Series
B+. This follows their $625m Ronin bridge
hack, the impact of which is difficult
to overstate. This is not only the single
greatest successful heist in the history
of crypto, but it is also one of the single
greatest successful heists in human history —
the only other higher one being the Dresden
Green Vault heist of $1B. And if you compare
it to a list of the
greatest successful fictional
heists of all time
, Sky Mavis loss exceeds
Hollywood’s wildest imagination. The Series
B+ round here was really more of a bail-out for
Sky Mavis, rather than anything else.
Improbable Worlds was one infrastructure
company that managed to raise a $150m
Series B+ during this quarter. This likely
comes
on the back of Yuga Labs raising a whopping
$450m Seed round in Q1’22, as they’re using
Improbable’s technology to power the
multiplayer future of The Otherside
metaverse. Both Yuga Labs and Improbable
funding rounds were also led by a16z, which is
quite telling in itself.
Over the quarter, ~66% of the deal count was
concentrated in Seed round investments,
while ~93% of the deal value was equally
split between Seed, Series A and Series B+
rounds. The latter mainly indicates smaller
Seed round check sizes ($7m in Q2’22
vs. $12m in Q1’22), 2021’s Seed round
companies graduating to Series A rounds
(with an average check size of $25.5m), and
some to Series B+, as highlighted previously.
Around 1/3 of all Seed round deals were
higher than the ~$7M/deal average, with
Iskra, Untamed Planet, and Directive Games
seeing Seed check sizes ≥$20m.
Almost all Series A deals (11) were higher
than $10m/deal, with GEMS, N3TWORK
Studios, Playful Studios, and Irreverent Labs
seeing Series A check sizes >=$40m. The
remainder deal value of the quarter was
in various Series B+ rounds across a total
of 3 deals. These were Sky Mavis at $150m,
Improbable Worlds at $150m, and Animoca
Blowfish Studios at $19.3m. There was also
one notable Series B for BUD at $37m, which
was led by Sequoia Capital.
Blockchain Gaming Deals
Note: (*) the following analysis has been provided by Naavik
consulting firm, based on InvestGame data
19
All that said, both the deal number and the
deal value has further slowed down over the
last quarter. And if Q2’22 performance is any
indicator, deal activity will continue
to normalize to realistic levels over 2022.
Crypto winter performed a massive market
clean up, and investors are getting smarter
with their bets, while builders continue
to build.
Want more alpha about blockchain and F2P
gaming every week? Check out
Naavik Pro
,
and use the
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One class of investments this quarter did not
see much of is guilds. If there is one corner
of Web3 gaming that is under major fire,
it is probably guilds. Most of the first wave
of crypto games were built for a bull market,
and a large majority of guilds were mainly
focused on Axie Infinity. Today, a large swath
of the first wave games have been wiped out,
and Axie Infinity is on a downward spiral, which
means most guilds don’t have a reason to exist.
The buzzword for every guild currently is ‘pivot’,
and it will be interesting to see how the
seemingly bleak future of guilds plays out over
the course of 2022–23.
Overall, it seems like the blockchain gaming
deal market continues to mature into its second
stage, wherein the companies garnering most
of the funding attention are no longer the ones
building platform layers on which future
blockchain games could live, but rather the
blockchain gaming studios themselves that can
produce engaging content that makes use of
blockchain gaming infrastructure.
Blockchain Gaming Deals
Note: (*) the following analysis has been provided by Naavik
consulting firm, based on InvestGame data
20
Appendix
The private data contained in this report
is based on information from sources believed
to be reliable, but accuracy and completeness
cannot be guaranteed. Sources include public
media, our business partners, data provider
S&P Capital IQ, and market insights.
InvestGame tracks closed transactions
(unless otherwise noted) in the Video Games
industry, with target companies having core
business operations related to the Video
Games market. Please note that we do not
track pure gambling, betting, and non-gaming
blockchain/Web3 companies.
Methodology & Glossary
Private
Investments
Late-stage VC
Corporate
Early-stage VC
Public
Offerings
Fixed income
IPO, SPAC
PIPE, other
Deal Types Overview
Control
Minority
M&As
—
Control M&As — mergers and acquisitions
resulting in the change of control
(50% + ownership)
—
Minority M&As — sale of a minority stake
in the business
—
Early-stage VC — pre-seed, seed, and Series
A rounds with a lead VC fund
—
Late-stage VC — Series B, Series C,
and later-lettered venture rounds
—
Corporate Investments — investment with
a lead investor being corporation
—
IPOs — the process of company going public
including IPOs, SPACs, and direct listings
—
Fixed-income — debt-related instrument
with fixed payments and interest payments
—
PIPE, other — private investment in public
equity, direct share issue, and other
transactions with publicly traded stock
Deal Type Terms Glossary
Target’s Sector Overview
Other
Hardware
Other
Cash-related
Gaming
PC & Сonsole
Multiplatform
Mobile
Outsourcing
VR/AR
Esports
Platform
& Tech
Platform
Tech
VR/AR
Blockchain-powered
The information, opinions, estimates, and
forecasts contained herein are as of the date
hereof and are subject to change without
prior notification. We seek to update our
research as appropriate.
22
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donation is always appreciated!
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The free version of this report includes general + Gaming data. To get
more specific data, please contact us at
digest@investgame.net
.
23
This report is intended for general information purposes only
and is educational in nature; it is not a solicitation or an offer
to buy or sell any financial instruments, or to participate
in any particular trading strategy. Nothing in this document
constitutes a personal recommendation, legal, or other
professional advice.
You agree that you shall not copy, revise, amend, create
a derivative work, provide to any third party, or in any way
commercially exploit any InvestGame research, and that you
shall not reproduce data in any form or by any means, without
the prior written consent of InvestGame.
This document is for distribution only, as may be permitted by
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or resident of or located in any state, country or other
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InvestGame to any registration or licensing requirement
within
such jurisdiction.
Disclaimer
24
InvestGame team proudly presents Global Gaming Deals Activity Reports:
the recent quarterly
Q1’22
, the annual
FY’21
, the one covering
Q1–Q3’21
,
and the one on
H1’21
. You can find others
here
. We also make weekly email
digests, covering all the latest gaming deals (
subscribe
!). If you like what
we do, please
support us on Patreon
.
We would love to thank our dear friends at
Hiro Capital
for supporting this
Report.
Please note that this support did not in any way affect the integrity
or fairness of the data, and the analysis presented
.
We would also like to extend thanks to our friends at
Naavik
for covering the
Blockchain Gaming Deals part of this report.
Thank you for reading!
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to Readers
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