Description: Drake Star’s Q2 2023 Global Gaming Market Report reveals a surge in gaming M&A deals, with Scopely and Rovio acquisitions contributing significantly to the $6.2B deal value. Early stage funding remains dominant, while public gaming stocks show promising growth.
Introduction: The gaming industry is experiencing a significant uptick in mergers and acquisitions (M&A) during Q2 2023, as highlighted in Drake Star’s Global Gaming Market Report. The report also sheds light on the dominance of early stage funding, public market performance, and potential IPO opportunities in the near future.
Early Stage Funding Focus: Drake Star recorded 196 private funding deals in Q2 2023, totaling $663 million in disclosed value. Although the number of deals decreased by 7% compared to the previous quarter, financing activity remains healthy. Over 80% of the closed deals in Q2 went to early stage start-ups, indicating a strong focus on nurturing new ventures. Michael Metzger, partner at Drake Star, emphasized that the gaming sector continues to attract numerous investors, creating promising opportunities for growth, compared to Q1.
Top VCs in H1 2023: Among the notable VC funds in the gaming industry during H1 2023, Bitkraft Ventures led the pack with 15 closed deals. The top five funds, including Andreessen Horowitz, PLAY Ventures, Griffin Gaming Partners, and Makers Fund, showed keen interest in early to late stage start-ups, contributing to the sector’s overall expansion.
Gaming Consolidation via M&A: The M&A landscape in Q2 2023 remained steady in terms of the number of deals, but the disclosed deal value experienced a sharp increase. Schonely’s acquisition by Savvy Games Group for $4.9 billion accounted for nearly 80% of the impressive $6.2 billion quarterly total. Additionally, Sega’s acquisition of Rovio for $776.2 million contributed significantly to the M&A deal value. Andreessen Horowitz, Embracer’s reorganization and pause on investments created an opening for Savvy Games Group to become a dominant acquirer in the industry.
Public Markets Performance: Public gaming stocks closely followed the S&P 500 during Q2 2023, with the Drake Star Gaming Index rising by 14.6%. The VA neck Video Game Tech ETF experienced substantial growth of 30.1%, mainly attributed to NVidia’s historic performance. Drake Star predicts that continued market performance will open up more IPO opportunities, benefiting later stage start-ups that are currently closing fewer funding rounds.
Private Equity Interest: Private equity firms are showing increasing interest in acquiring publicly traded gaming companies, Playtika with mobile game developer Playita identified as a prime candidate. The recent FTC’s approval of Microsoft’s acquisition of Activision Blizzard has boosted confidence in the gaming industry and is expected to have a positive impact on gaming stocks, mobile game publisher Scopely
Conclusion: Q2 2023 M&A deals, with Scopely and Rovio acquisitions playing a crucial role in driving the industry’s total deal value to $6.2 billion. Early stage funding remains a significant focus, presenting Rovio acquisition numerous opportunities for start-ups. As public gaming stocks continue to perform well, company’s reorganization Drake Star predicts more IPO opportunities will arise, and private equity interest in gaming companies will intensify. The gaming industry is thriving, attracting both investors and enthusiasts alike, making it an exciting time for this dynamic sector.
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