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Global Gaming Report Q1 2024: Strong momentum to start the year with multiple high-value deals

03 May 2024

 

We are pleased to share the Drake Star Global Gaming Report Q1 2024 which analyzes first quarter investment and M&A activity for Gaming and Esports and outlines what to expect for the rest of the year. Download the full report at the button below.

Highlights include:

  • Strong start to the year: 2024 has started on a strong note with multiple high-value deals and the momentum extended in early Q2 with Embracer continuing to divest major businesses. Existing and new VCs continue to raise more capital focused on gaming investments (A16Z’s Gaming Fund II: $600M and BITKRAFT III: $275M) and public markets have improved since bottoming out in October last year.
     
  • M&A Activity on the rise: With 47 announced deals and disclosed deal value of $2.4B, M&A activity continues to pick-up and was higher than any quarter last year. CVC/Haveli acquired Jagex ($1.1B) and Take-Two picked up Gearbox from Embracer ($460M). Volume in the mid to small size deals segment with mostly undisclosed deal value increased significantly.

  • Financing uptick: Private financings reported a notable uptick in Q1 with over $2.4B raised through 188 deals, reversing a downward trend in deal volume since mid- 2022. Disney invested $1.5B in Epic Games, Build a Rocket Boy raised $110M and True Gamers raised $45M.

  • Early stage blockchain dominates deal volume: Early-stage financings continue to comprise the major portion of total deals, while mid to late-stage deal activity remained low. With the recent upswing in the blockchain market, early-stage blockchain deals were 40% of the total deal volume. For investments over the last 12 months, BITKRAFT led the VC league table, followed by Andreessen Horowitz, Griffin Gaming, Play Ventures and Vgames.

2024 Outlook:

  • M&A expected to increase: With a strong start to the year, we expect M&A activity to steadily increase in 2024. Savvy/Scopely, Tencent, Take-Two and Playtika are expected to be some of the active buyers. Given the attractive public company valuations, we except several acquisitions and take-private deals to be led by PE firms in the coming quarters.

  • Growth in financings & AI expected to stay hot: With funding trends finally reversing their downward trend and growing for Q1, we expect overall growth in private financings during the year. While early-stage companies will continue to dominate the deal volume, we expect a modest increase in mid / late-stage deals. AI, mixed reality, platform and tools continue to be hot segments.

  • IPOs may reemerge: We saw the first successful consumer tech IPO in Reddit this quarter and we anticipate that several IPO ready gaming companies such as Discord and EPIC are starting to plan for a listing in the second half of 2024 or 2025.
     

Download the full report at the button below.
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