InvestGame: Gaming Investments in 2023

The comprehensive report also covers the AI, blockchain, and eSports transactions.

Private Investments

• In 2023, 403 deals were made totaling $2.7 billion. This marks a 4-fold decrease in volume compared to the previous year and a 36% decrease in the number of deals.

• Speaking specifically about developers and publishers, in 2023, there were 136 deals (+23.6% compared to 2022) in the early stages totaling $511 million (-70% compared to 2022).

• In later rounds, there were 12 deals in 2023 (30% less than in 2022) totaling $367 million (2.4 times less than in 2022). This also covers only deals with developers and publishers.

• Moreover, in January 2024 alone, two major deals occurred - a $1.5 billion transaction between Disney and Epic Games; and a $110 million round for Build a Rocket Boy.

• InvestGame experts note that in 2024, we may see an increase in deals in later rounds, as well as the closure of companies that received investments in 2020-2022 (companies that fail to show results and/or cannot attract additional funding due to high valuations from previous rounds).

• Corporate investment funds are more inclined to engage in joint deals with VC funds, which helps reduce financial risks.

• The USA, Western Europe, Asia, and the MENAT region are the most active markets in terms of VC deals.

M&A

• Taking into account the Microsoft and Activision Blizzard deal, the volume of M&A deals in 2023 amounted to $78.2 billion. This is almost twice the amount in 2022 ($40.8 billion). Excluding this deal, there were M&A transactions worth $9.5 billion in 2023, 4.3 times less than the previous year. The number of deals dropped from 231 in 2022 to 121 in 2023.

• InvestGame's forecast for 2024 is an increase in business M&A activity. For instance, a deal has already occurred between CVC and Haveli to acquire Jagex.

• Overall, large companies ended 2023 confidently, setting an optimistic tone. However, recession risks, platform regulations, and state interventions (such as laws on loot boxes) could impede growth.

Public Offerings

• In 2020-2021, the gaming market witnessed a boom in public offerings amid active industry growth. However, in 2022, the situation changed drastically due to macroeconomic crises and corrections. Only 23 companies conducted public offerings, raising a total of $3.6 billion (almost 7 times less than in 2021).

• Signs of improvement appeared in 2023. There were 43 public offerings (almost double the previous year) totaling $4.2 billion (+16% compared to 2022).

• InvestGame believes that companies are increasingly considering public offerings. There's likely pent-up demand that could materialize if the industry situation improves.

AI Investments

• Since 2020, there hasn't been a single quarter without deals with companies specializing in AI. However, the number of deals in 2023 doubled - 57 compared to 28 in 2022. Yet, the total investment volume hardly increased - $545 million in 2023 compared to $519 million in 2022. This refers specifically to AI solutions for games.

Investments in Platforms and Technologies

• The number of deals in technological and platform solutions plummeted by 40% in 2023 to 82. Investments in platforms remained roughly the same ($0.6 billion compared to $0.7 billion in 2022), while investments in technological solutions plummeted 16 times from $7.9 billion in 2022 to $0.5 billion in 2023.

• It's worth noting that the Unity merger with ironSource ($4.4 billion) occurred in 2022.

• InvestGame analysts believe that the consolidation of the technical gaming market is nearing its end.

Blockchain Investments

• The number of deals nearly halved from 278 in 2022 to 145 in 2023. The investment volume dropped almost 4.5 times from $3.95 billion in 2022 to $0.9 billion in 2023.

• Nevertheless, InvestGame notes a positive trend. The market in 2023 is significantly higher than in 2020. Overall, the gaming Web3 market is becoming niche, with fewer developers, investors, and smaller checks.

Esports Investments

• The number of investments in esports decreased by 20% in 2023 (37 deals). The investment volume dropped by 4.8 times to $471 million.

• Despite esports existing for a long time, companies still struggle to establish an effective business model for fully monetizing their audience.

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