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Gaming Deals Activity Report Q1’23

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Apr, 2023 Q1’23 Gaming Deals Report

Cooling Off After

Years of Blistering

Growth

Executive Summary

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Executive Summary

Highlights:

getting back to regular levels of deal activity

— Investment activity remains strong,

showing increase in the deal count vs.

the previous 3 months, and halting the

negative trend. This growth was mainly

driven by Early-stage and Corporate

deals (+30% growth vs. Q3’22).

Executive Summary

4

Private Investments:

remain strong with a slight pullback from previous record highs

— The total amount of raised capital

remains stagnant, as we see very few

Late-stage deals, while most Corporate

investments do not disclose amounts.

The largest Late-stage deal was VSPO by

Savvy Games Group ($265m), which

accounted for 65% of the total value.

— The Early-stage market continues

to be robust and is expected to be

a significant driving force behind

the emergence of new unicorns in

the next 3–5 years.

Corporate & VC Investments Activity

M&As:

hit its lowest point with strong rebound in the coming quarter

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Executive Summary

— Despite a harsh start of the year,

Q2’23 has already seen two significant

deal announcements: Scopely

acquisition by Savvy Games Group for

$4.9B, and Rovio acquisition by SEGA

for $0.8B.

Closed M&As Activity

— M&A activity in Q1’23 showed

a significant drop in the total

disclosed deal value, and saw ~2x

less closed deals vs. the previous

years’ average (Q1’21/Q1’22).

Public Offerings:

remain stalled, with no signs of improvement so far

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Executive Summary

— Public Offerings activity continue to

struggle, due to the current situation on

public markets and high interest rates.

— In the coming quarters the public

activity will probably remain low,

largely depending on Q1’23 earnings

season results. Nevertheless, based

on Take-Two Interactive’s Public

Offering in the amount of $1B, we still

may see some notable offerings by big

strategic players.

Public Offerings Activity

Gaming

Deals with Targets represented

by Video Game Publishers and/or Developers

Highlights:

gaming deal activity saw a steep decline

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Gaming

— Early-stage investment has displayed

a rebound following a notable decline in

Q2’22 and continuously showing an

increase in the deal count. However, we

should highlight that the average size of

deal size has been decreased.

Early-stage Investments:

lots of fuel for future unicorns

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Gaming

Early-stage Gaming Activity

— The emergence of new gaming

unicorns in the future may be largely

driven by the current positive trend in

the increasing investment activity

from the Early-stage VCs.

Note: (1) based on the internal weighted

average ranking system (see p. 14);

(2) based on investments in Gaming

with the disclosed deal value (no Web3

gaming deals included)

Gaming

10

Most Active VC Gaming Funds for Q1’23

Late-stage Deals:

uncertain year ahead

— Late-stage investment activity

continues to struggle, what with the

bearish public markets and slowdown

in the M&A activity, with only 2 closed

deals happening.

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Gaming

Late-stage Gaming Activity

— In the upcoming quarters, Late-stage

negative trend will most likely continue

with a small number of deals to happen,

due to high checks, plus the potential

problems to raise expected amounts.

— In Q1’23, Corporate activity in

gaming is almost on the same level as

it was the year prior; however,

the majority of the deals sizes were

not disclosed.

Corporate:

attractive valuations to drive growth

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Gaming

Corporate Gaming Activity

— Based on the current market

conditions and relative silence from

the key strategic investors, we consider

that in the upcoming quarters, overall

Corporate activity will be more dynamic

in both the deals value and count.

Appendix

Esports

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Appendix

Methodology & Glossary

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.

Late-stage VC

Corporate

Early-stage VC

Fixed income

IPO, SPAC

PIPE, other

Deal Types Overview

Control

Minority


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



investments 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

Othеr

Hardware

Other

Cash-related

PC & Сonsole

Multiplatform

Mobile

Outsourcing

VR/AR

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.

Gaming

Platform

& Tech

Other

M&As

Private

Investments

Public

Offerings

VC Ratings Calculation

For both the Deals Number and Deal

Value lists, we prioritize as follows:

60%



lead deals number / value;

40%



total number / value of deals.

Since the funds do not usually

disclose publicly their individual

participation in a particular round

(even if some occasionally do), we

do not take into account the exact

cuts. We prioritise the overall

number and the sum of the deals

while still placing importance on the

value and the count of lead deals.

We would love to thank our dear friends at

MGVC
,
Taylor Wessing
, and
White Label PR
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.

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Digest

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LinkedIn

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Disclaimer

Appendix

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