Recap of the investment activity in the Video Game market in 2020 (Q1-Q3)

Oct, 2020 Q1-Q3 2020Recap of the investment activity in the Video Game market in 20201

2•Gaming –game development and publishing (mobile, PC&console, multiplatform)•Platform&Tech–platforms and tech-companies targeting gaming market•Esports –esports organizations, leagues, fantasy sport•Other –outsourcing, hardware, retail chainsCovering Multiple Sectors & SegmentsNote: tracking only publicly announced and closed deals in the video game industry2589112211 – 100 200OtherEsportsPlatform&TechGami ngTotal number of tracked deals* (Q1-Q3)5046853,97015,347 $- $5,00 0 $10,0 00 $15,0 00OtherEsportsPlatform&TechGami ngTotal value of tracked deals* (Q1-Q3), $m

3•Private Investments –Early and later stage venture deals, corporate investments •M&A –Mergers and acquisitions, including controlling and minority transactions•Public offerings –IPOs, PIPEs, Fixed Income, other deals with publicly traded stocksCovering Various Deal TypesNote: tracking only publicly announced and closed deals in the video game industry4,6626,6099,234 $- $5,00 0 $10,0 00 $15,0 00PrivateInvestmentsM&APublic offeringsTotal value of tracked deals* (Q1-Q3), $m25413251 – 100 200PrivateInvestmentsM&APublic offeringsTotal number of tracked deals* (Q1-Q3)

1,2171,0064501,1475863,1642,5484,1361,09405001,0001,5002,0002,5003,0003,5004,0004,500Jan-20Feb- 20Mar-20Apr-20May- 20Jun-20Jul-20Aug-20Sep- 20M& APubl i c offe r ing sPr i vate Inve s tme ntsValue of deals in the Gaming sector, in $m4Gaming024681012141618Jan-20Feb- 20Mar-20Apr-20May- 20Jun-20Jul-20Aug-20Sep- 20M& APubl i c offe r ing sPr i vate Inve s tme ntsNumber of deals in the GamingsectorCOVID-19 impact

4131884615185408162417113241006 9 11 12 5 7 5 10 4 (2 ) 3 8 13 18020406080100120Jan-20Feb- 20Mar-20Apr-20May- 20Jun-20Jul-20Aug-20Sep- 20Pre-Seed / See dSe ries Anu mb er o f d ea lsEarly stage VC activity in the Gaming sector, in $m5Gaming –Private Investments-1652376–181,900742 6 5 1 1 2 3 5 6 (2 ) – 2 4 6 8 1005001,0001,5002,000Jan-20Feb- 20Mar-20Apr-20May- 20Jun-20Jul-20Aug-20Sep- 20Se ries B+Co rp or at enu mb er o f d ea lsLater stage VC & Corporateactivity in the Gaming sector, in $m§PrivateinvestmentactivityhassignificantlydroppedinthewakeofCOVID-19outbreakinMay2020,butstartedgraduallyrecoveringafterward,bothintermsofthenumberofdealsandintermsofthecombinedvalue§WhileearlystageVCactivityremainedatthelevelof5-7dealspermonthevenafterthebreakout,thelaterstageVC&corporateactivityfellto1-2dealspermonthupuntilJuly§DuringQ1-Q32020gamedevelopersandpublishershavebroughtaround$2.7Bcapitalintothegamingmarketwith100transactionsclosed§69closedpre-seed,seed,andSeriesArounds§9closedSeriesB+roundsand22corporateinvestments§WhileAmericancompaniestakeadominantpositionintheinvestmentactivity(90%+ofvalue)atthelaterstageVCandcorporaterounds,only30%ofearlystageVCfundshavebeenraisedbyU.S.startups§Threetransactionsaccountingfor78%oftotalcapitalinjection§CA-basedmobilegamepublisherScopelyraising$200mat$1.7Bvaluationwithmarketrumorsaboutraisingadditionalfundslaterthisyearat$3Bvaluation§CA-basedcross-platformgamedeveloperRobloxraising$150minSeriesGfundingroundat$4Bvaluation,andconsideringIPOearliernextyearat$8Bvaluation§Americangamedeveloper,publisher,anddistributorEpicGamesraising$1.78Bat$17.3BvaluationwithleadinvestorsbeingSony,KKR,andSmashVentures

6Gaming –Early Stage VC3415164Early stage VC investments by segment, in numbersMob ileMultipla tfor mPC& cons ol eVR/ AR$103 31%$167 50%$58 17%$6 2%Early stage VC investments by segment, in $mMob ileMultipla tfor mPC& cons ol eVR/ AR69$354§BreakingdownearlystageVCdealsbysegments,themostactiveoneintermsofnumberofdealswouldbeMobilewith34announceddealsand$103mraised§Themostnotabledealinthemobilespaceisa$12mSeriesAroundraisedbyU.S.-basedmobilesportsgamespublisherNiftyGameswithMarchCapitalPartnersbeingtheleadinvestoronthedeal§Mobileremainsaveryunconcentratedsegmentwithaveragechecksvaryingfrom$3m(Seed)to$6m(SeriesA)fortheround§ThemajorpartofearlystageVCfunds(50%ofvalue)devotedtomultiplatformgamedeveloperswithseveralstrongoutliers:§InstantgamesdeveloperPlaycoraising$100mat$1BvaluationinSeriesAroundledbySequoiaCapitalandJoshBuckley§Pan-Nordiccloud-nativegamingstudioMainframeraisinga$8.1mSeriesAroundledbyAndreessenHorowitz(a16z)withsupportfromRiotGames§Cloud-basedMMOsandboxdeveloperPlayableWorldssecured$10minSeriesAfunding,ledbyGalaxyInteractiveviaitsGalaxyEOSVCFund§PC&consolesegmentcanboasttwodeals§Russianvideogameproductioncompany110Industriesraising$20mfromNorma,GEMCapital,andSergeyKornykhin§ArtCraftEntertainmentraised$11.7mfromunnamedinvestors,tofinishandlaunchitsMMOgameCrowfall

128211985902774175915500262,10219249612 8 11 6 5 12 10 10 6 (1 ) 1 3 5 7 9 11 13 15 1705001,0001,5002,000Jan-20Feb- 20Mar-20Apr-20May- 20Jun-20Jul-20Aug-20Sep- 20Mi no ri tyCo nt ro lnu mb er o f d ea lsM&A activity in the Gaming sector, in $m7Gaming –Mergers & AcquisitionsNote: deal size includes earn-out considerationDateTargetBuyerDeal size, $mPlatformJan-20IlyonDynamics Miniclip(Tencent)100Mobile Jan-20Storm8 Stillfront Group 400Mobile Jan-20FoxNextGames Scopely250Mobile Jan-20Phoenix Labs Sea (Garena) 150PC&consoleJan-20KolibriGames Ubisoft 147Mobile Feb-20XL Games Kakao Games 100PC&mobileFeb-20Saber Interactive Embracer Group 525PC&consoleMar-20Funcom Tencent 114PC&consoleApr-20Changyou.comSohu190MobileApr-20CandywriterStillfrontGroup 195Mobile Apr-20Jagex MacArthur Fortune530PC&consoleMay-20Machine Zone AppLovin500Mobile Jul-20Peak Games Zynga 2,083Mobile Aug-20DECA Embracer Group 100Mobile Aug-204A Games Embracer Group 80PC&consoleSep-20PlayDots Take2 192Mobile Sep-20Vertigo Games Embracer Group 136VR games Sep-20NanobitStillfrontGroup148Mobile20-OctRollicGames Zynga 213Mobile signingZeniMaxMicrosoft 7,500PC&consolesigningLeyouTechnologTencent 1,400PC&consoleNotable M&A Transactions$4,639Mobile (41 deals, 1 Oct)$10,467PC&console(27 deals, 2 signing)$344Multi and VR/AR(12 deals)§M&Aactivityisstrongthisyearstayinglargelyunaffectedbythemacroeconomicsituation,withthetwolargestdealsannouncedthisyearbeingPeakGamesacquiredbyZyngafor$2BandZeniMaxintheprocessofbeingboughtbyMicrosoftfor$7.5Bcash(the2ndlargestdealinthegaminghistory)§FocushereisonMobileacquisitions:41dealscompletedoverthecourseof9monthswithacombinedvalueof$4.6B.ThePC&consolesegmentcomprises$10.5B,butobviously,themajorityofthatcomesfromtheMicrosoft(ZeniMax)andTencent(LeyouTechnologies)§ThemostactivebuyerhereistheusualsuspectTencent(includingitssubsidiaries),whileSwedishpubliclytradedEmbracerGroupandStillfrontGroupcontinuingtoconsolidatethemarket,withZyngajoiningthegame

8Gaming –Public Offering2,0003003301421803,09905001,0001,5002,0002,5003,0003,500Jan-20Feb- 20Mar-20Apr-20May- 20Jun-20Jul-20Aug-20Sep- 20Fixed Inco meIP OPI PE, othe rValue of public offerings in the Gaming sector, in $m02468Jan-20Feb- 20Mar-20Apr-20May- 20Jun-20Jul-20Aug-20Sep- 20Fixed Inco meIP OPI PE, othe rNumber of public offerings in the GamingsectorCompanies considering IPO COVID-19 impact§In the meanwhile, Public market activity has almost stopped during January-May 2020, with just two PIPE deals done by Stillfrontand Embracer, both raising to perform M&As§Market started recovering in June, with multiple companies raising money for future M&As, as well as with IPOs of Asian gaming companies Archosaur Games ($280m) and KakaoGames ($330m)§Activision Blizzard has raised $2B of senior unsecured notes (in two series) to fund the redemption of its outstanding unsecured notes due 2021-2022§With recent trading multiples increase several gaming companies announced plans to go for IPO either this or beginning next year (pictured below)

9Most Active VC FundsRankVC Investor# of total dealsTotal deals value, $m# of leading dealsLeading deals value, $mType1Makers Fund9180880Early stage2Galaxy EOS VC1192877Early stage3BITKRAFT Ventures1073853Early stage4Play Ventures143588Early stage5Andreessen Horowitz73116198Later stage6London Venture Partners742519Early stage7SisuGame Ventures1012654Early stage8KonvoyVentures63738Early stage9Serena Capital410.5410.5Early-stage10KKR2198021980Later-stage11Golden Ventures440215Early stage12March Gaming (March Capital)215215Early stage13EQT Ventures213213Later stage141Up Ventures41829Early stage15Bumble Ventures2323Early stage16VGames332-Early stage17Altos Ventures2176126Later stage18General Catalyst351120Later stage19Courtside VC336118Early stage20Transcend Fund32015Early stage21Initial Capital21213Early stageFundraising activity§In terms of the deal activity, themost active players on this market are currently Play Ventures, Galaxy EOS VC, BITKRAFT Ventures, SisuGame Ventures, and Makers Fund all together accounting for 54 deals §KKR led only 2 gaming deals so far this year, but both of them being huge, backing Epic Games in $1,530m round (excluding Sony investments) and Zwift (California-based online fitness gaming platform) with $450m§Andreessen Horowitz (a16z) led 6 deals in Q1-Q3 with backing Roblox in a Series G funding round of $150m§Several more VC funds raised funds to make their way into gaming, including Grishin Robotics ($100m), Transcend Fund ($50m), N3twork ($50m), March Gaming ($60m), and VGames($30m)

10Most Active Strategic Investors & BuyersRankStrategic Investor# of M&A deals*M&A value, $m*# of Corp investmentsCorporate value, $m1Microsoft (NasdaqGS:MSFT)17,500002Zynga (NasdaqGS:ZNGA)22,308003Tencent (SEHK:700)31,5145215Miniclip(subs. Tencent)210000Supercell (subs. Tencent)00442Riot Games (subs. Tencent)1-2284Embracer (OM:EMBRAC B)11858005Stillfront (OM: SF)3743006AppLovin(backed by KKR)2500207Scopely2250008Take2 (NasdaqGS:TTWO)11921209Ubisoft (ENXTPA:UBI)114712010KakaoGames (KOSDAQ:A293490)110032011SEA-Garena11500012MTG (STO: MTG A)0053313MY.GAMES (incl. MGVC)1-4-14Epic Games2-11515Unity Software (NYSE: U)2-0016Paradox Interactive (OM: PDX)2-0017Playrix2-00Note: (*) including recently announced and unclosed transactions§IntheStrategicfieldofthefirstthreequartersof2020therearethreemastodonswithacombinedannounceddealvalueofmorethan$11B—Microsoft,Zynga,andTencent(withitssubsidiaries)§AninterestingpatternisseenherewithTencentmakingM&AsfromitsHQ,andmultiplecorporateinvestmentsthroughitssubsidiarySupercellandRiotGames§Oneunusualdealof2020inthestrategicfieldisSupercellsellingastakeinthemobilegamingstudiobehindthetop-grossingpuzzlegame“SweetEscapes”,RedemptionGamestoAppLovininMay,2020§OnepureM&Aacquiringleaderhereis,ofcourse,EmbracerGroup(withitssubsidiaries),making11deals,withthelargestonebeingSaberInteractiveacquisitionfor$525m§ThemostactivestrategicinvestorsinQ1-Q3areTencent,MTG,MY.GAMES,Supercell,KakaoGames,andAppLovin§ThemostprobableactiveacquirerstofollowintheforeseeablefutureareMicrosoft(gettingmorecontentforXboxGamePassandxCloud),Zynga(seecommentbelow),Tencent(activeasusual),AppLovin(scalingthebusinessbeforeIPO),Scopely(scalingthebusiness),EmbracerandStillfront(boostingmarketcap)•Zyngawillmostprobablytakesometimetointegraterecentlyacquiredbusinessesandprovethatitcanacceleratesynergyatsuchalargescale.WeexpectZyngatocontinueM&Aactivityin2021

1.Tracking all announced deals in the gaming market —early / later stage, M&As, public offerings2.Detailed info on the most active gaming funds and strategic investors, with deal types, value and focus11About INVESTGAME3. Covering biggest investment news ofthegaming market providing facts and strategic rationale behind deals4. Weeklynews digests covering most interesting deals —subscribe here