Aream & Co.: Game Investments in Q4'25
One of my favorite quarterly reports is back, with a lot of insights of the investment market; and gaming market in general.
Aream is one of the largest investment banks specializing in games. In 2025, the firm advised on 8 transactions with a total value exceeding $4 billion, including the acquisitions of Easybrain, Plarium, and AppLovin’s gaming portfolio.
The report was prepared in partnership with InvestGames.
Market Overview
In Q4’25, 39 M&A deals were completed with a total value of $0.5 billion. On public markets, 12 transactions worth $1.7 billion took place, including the Ubisoft deal. There were also 102 private investments totaling $0.9 billion.
The most notable Q4’25 events involved public companies, including the $1.25 billion transaction between Ubisoft and Tencent, Coffee Stain’s IPO following its spin-off from Embracer Group, and Azerion’s issuance of $266 million in senior bonds.
Among M&A deals, the largest deal was the merger between Core Gaming and Siyata.
❗️I was unable to find much public information about Core Gaming or what the company actually does. Reports mention $79 million in FY2024 revenue, but it is unclear which products generated it. The company positions itself as a leader in AI development.
Another notable deal was NCSOFT’s acquisition of the Vietnamese company IndyGo (owner of Lihuhu) for $104 million. NCSOFT is looking to expand beyond its traditional MMORPG focus and explore more casual segments.
In private investments, the largest Q4’25 deal was a $205 million investment in Magic Leap by Saudi Arabia’s PIF. Total PIF investment in the company is now close to $1 billion.
By the end of 2025, the total gaming market will reach $244 billion. Of this, $128.7 billion came from mobile IAP revenue, $83.3 billion from PC and console games, and $31.9 billion from mobile advertising.
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Mobile Gaming Market
Data source: Sensor Tower
Mobile gaming IAP revenue grew by 1% YoY in 2025. Downloads continue to decline.
The top six companies by IAP revenue growth in the US in Q4’25 were from Asia.
The number of new games reaching 5,000 downloads on the US App Store has been declining since 2020. In 2025, only 2.3 thousand games reached that threshold.
At the same time, revenue concentration among older titles is slowly decreasing. New games released in 2025 accounted for 7% of total revenue, the highest share of new games revenue since 2019 (11%). One-year-old titles accounted for 12% (higher only in 2020 at 13%). Games aged 2–3 years accounted for 18%, a segment shrinking since 2019. Games older than three years still generated 63% of revenue, but this is the lowest figure since 2021.
70% of games in the top-20 by IAP revenue are more than four years old.
Despite non-gaming apps often being cited as the main growth driver of the mobile market, games remain strong. They are in the top five both by audience engagement and by IAP revenue. Games added 241 million DAU over the year (+10%) and $1.3 billion in IAP revenue (+2% YoY).
Turkish and Asian publishers (Singapore, Hong Kong) are leading IAP revenue growth heading into 2026. By average MAU growth, companies from Pakistan, Hong Kong, Vietnam, and Singapore are leading.
Aream & Co. separately highlights the rapid rise of rewarded apps. MAU for rewarded apps grew at a CAGR of 42% between 2021 and 2025. Rewarded UA has become firmly established alongside traditional acquisition channels.
Aream also notes rapid growth in the micro-drama segment. Mobile studios are applying their expertise here, with examples such as Crazy Maple and Storymatrix. Gaming VCs are investing there, and there are also strategic appearances (Krafton).
PC and Console Gaming Market
Data source: Alinea Analytics
The PC market grew 20% YoY LTM in 2025 and is estimated at $18.5 billion. The largest Q4 releases, Battlefield 6 and Arc Raiders, generated $397 million and $208 million, respectively.
The number of new games released on Steam in 2025 reached 20 thousand. Only 3.3 thousand of them surpassed 100 reviews.
Older games continue to capture most player time. In 2025, games older than seven years accounted for 41% of total playtime, games aged 1–7 years accounted for 44%, and new games accounted for just 14%.
2025 was the best year ever for indie games in terms of Steam revenue, with $4.6 billion generated. However, growth has been steady rather than explosive, averaging 13% per year over the last five years.
Steam’s growth in recent years has strongly correlated with the growth of Chinese users. Chinese player CCU on Steam has grown at 20% per year over the past five years. Chinese is now the second most popular language on the platform, close to English.
Developers from the US ($10 billion, +28% YoY), Japan ($2.8 billion, -1% YoY), and Sweden ($1.8 billion, +85% YoY) ranked as the top three by Steam revenue.
Sony’s G&NS division grew 10% YoY in H1’25 (fiscal). Nintendo’s revenue in H1’26 grew 119% YoY, driven by the launch of Nintendo Switch 2 and strong first-party game sales.
Not everyone performed well. Xbox gaming revenue declined by 2% in Q1’26 (fiscal). Console sales dropped 29% YoY, while content sales grew by 1% YoY.
UGC Trends
User interest in streaming platforms has remained relatively stable since mid-2022. Kick continues to put pressure on Twitch.
In 2025, Roblox surpassed Steam in peak CCU. Fortnite remains far behind.
In total, platforms including Roblox, Fortnite, and Overwolf paid $15 billion to developers in 2025, up 21.3% YoY. Roblox showed the strongest growth at +40.9% YoY, followed by Overwolf at +25%.
Aream & Co. and InvestGames highlight key deals of the year, including investments in Fifth Door and the acquisition of Grow a Garden, one of the biggest Roblox hits of last year.
M&A in Q4’25
M&A deal value in Q4’25 fell to a 2.5-year low at $0.5 billion. At the same time, the number of deals (39) increased 34% YoY.
Large gaming deals over $100 million returned to pre-pandemic levels, with 6–8 such deals per year, comparable to 2017–2019.
Deal sizes are also increasing. The combined Activision Blizzard and EA transactions alone exceed total M&A activity for 2020–2021.
Aream & Co. note that the primary M&A interest is in developers and publishers with established IP.
Most major deals in 2025 involved public companies, including acquisitions (NC Soft – IndyGo; MTG – Plarium), mergers (Core Gaming – Siyata), and divestments (AppLovin’s gaming portfolio acquired by Tripledot).
The role of PE investors has grown significantly, with PIF (Savvy Games Group) acting as the main driver.
❗️Some argue this reflects greater maturity and predictability in the gaming market. I would add that the cultural value of gaming companies has increased. Buyers are not just acquiring revenues and profits, but access to audiences, especially as gaming IP increasingly expands beyond games themselves.
Public Markets in Q4’25
Public market investment activity fell 58% YoY to $1.7 billion, while the number of deals dropped 33% YoY to 12.
Despite this, 2025 appears to be the most active year for public gaming markets since late 2021.
The largest deals of the year included GameStop’s $3.55 billion bond issuance, IPOs of asmodee and Coffee Stain, and a $1.25 billion investment in Ubisoft.
All gaming stocks underperformed compared to the NASDAQ. Diversified holdings performed best, up 67% since January 2023. PC/console companies were slightly positive (+3%), while mobile developers underperformed significantly.
EV/NTM EBITDA multiples are broadly similar across diversified holdings (13.6x), PC/console companies (12.5x), and mobile developers (11x). Western mobile developers lag far behind at 4.5x.
❗️Asian developers put stronger pressure on Western mobile companies due to higher efficiency, more intense competition, and access to large closed markets like China.
In 2025, nearly all major diversified holdings increased in value, led by NetEase and Tencent.
Among PC/console developers, Square Enix, CD Projekt, and Capcom gained value, while Paradox Interactive, Embracer Group, and Ubisoft declined.
Among Asian mobile companies, Nexon saw strong growth, partly driven by Embark Studios. NC Soft was slightly positive, while Netmarble, Krafton, and Shift Up declined.
Among Western companies, only MTG showed positive performance following the Plarium acquisition. Stillfront and Playtika underperformed, with Playtika announcing 15% layoffs during the reporting period.
There is no clear correlation between share price and financial performance. Capcom grew revenue by 46% YoY, but its stock rose only 5%. Shift Up grew revenue by 34%, but its stock fell 44%.
Revenue is only part of the equation; profitability is equally important.
Large companies hold substantial cash reserves. Tencent holds $59.2 billion in cash, but also carries $54.9 billion in debt.
Western mobile developers are in a tougher position. MTG, Playtika, and Stillfront together hold $0.9 billion in cash against $3.3 billion in debt, including $460 million related to the Plarium acquisition.
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Private Investments
Private deal value in Q4’25 reached $0.9 billion, up 29% YoY and the highest since Q2’24.
A total of 102 deals were completed, the lowest count of 2025.
Overall, post-pandemic private investment activity appears to have plateaued, with 2025 marking the lowest total private investment volume in five years.
In Q4’25, early-stage deals totaled $0.2 billion (+9% YoY). Series A investments were also $0.2 billion but declined 32% YoY.
❗️Free capital is shrinking. The ability to test hypotheses quickly, deliver results, and operate efficiently has always been valued, but is now a strict requirement.
One key 2025 trend is UA financing without taking equity stakes. This trend is expected to continue. Early investors save capital, founders avoid heavy dilution, and UA funds receive predictable returns.
❗️There is a caveat: UA financing providers prefer companies at a certain scale. Early metrics are often insufficient, and cohort data at meaningful spend levels is required.
Turkey led private investments by a wide margin. GoodJob Games raised $83 million across two rounds, Grand Games and Cypher Games raised $30 million, and Bigger raised $25 million.
Significant investment flowed into gaming infrastructure, particularly AI infrastructure and, somewhat unexpectedly, AR/XR.
BITKRAFT and Griffin Gaming Partners were the most active investors by deal count. By capital deployed, General Catalyst and Khosla Ventures led.