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Global Gaming Report Q2 2024: M&A activity on the rise for the 3rd straight quarter
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29 Jul 2024
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Gaming M&A deal activity continued to increase for the 3rd quarter in a row and the two largest deals for the year were acquisitions by private equity firms. Q2 saw a significant uptick in public equity / debt deals, and blockchain gaming attracted 40% of all private company financings.
The Drake Star Global Gaming Report Q2 2024 analyses the second quarter for Gaming and Esports and outlines what to expect for the rest of the year. Download the full report below for more detailed insights, including:
- With 52 announced M&A deals and $3.5B in disclosed deal value, Q2 is the 3rd straight quarter of continued increase in deal activity that bottomed out in Q3’23 (33 deals). Private equity firm EQT announced the acquisition of Keywords for $2.8B, the largest gaming deal of the year so far. Notable strategic buyers were Infinite Reality, Miniclip / Tencent, Nintendo and Tripledot.
- Private financings seem to be stabilizing with 180 deals in Q2’24, staying flat compared to Q1 (191 deals). Most capital went into blockchain gaming, accounting for 40% of total deals and 34% of disclosed deal value. Spyke and k-ID were the largest deals for the quarter, each raising $50M.
- Investment dollars continue to be mostly focused on early-stage companies (93% of total deals). Asia led with five of the largest financings, followed by three in Europe/UK, and one each in Turkey and the U.S. Very little VC money went to gaming studios. Bitkraft was the most active VC, followed by A16Z, Play Ventures and vgames.
- While Konami, Logitech and Krafton are the top performers over the last 18 months in the Drake Star Gaming Index, the broader market of gaming stocks has not recovered yet. The leading listed indie / AA game developers / publishers have seen a significant rebound this year. Embracer announced its plan to restructure its business into 3 separate listed public companies. GameStop raised ~$3.1B in equity and Embracer, Take Two and MTG raised ~$1.7B in debt.
2024 Outlook
- We anticipate that M&A activity will continue to strengthen throughout the remainder of this year and into 2025, buoyed by the broader recovery of the public gaming company market.
- While we expect big players such as Tencent, Take-Two and Playtika to be active buyers, volume of mid to small sized deals will likely continue to increase. As predicted, PE firms have been the top buyers so far in 2024 (CVC /Jagex, EQT/ Keywords), and we will likely see more acquisitions / take-private deal by PE firms. With limited mid / later stage financings available, we expect some gaming companies to opt for earlier exits. Following the Voodoo/BeReal deal, other gaming companies are likely to diversify in adjacent segments by acquiring mobile app companies.
- For financings, AI, mixed reality, platform and tools continue to be hot segments.
- Following the highly successful IPO of Shift Up in Korea, we anticipate that several IPO ready companies such as Appsflyer, Discord and EPIC will start to plan for a listing in the quarter to come.
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Enquiries
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For further enquiries, please contact:
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Michael Metzger
Managing Partner
Digital Media
FinTech
Los Angeles
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Julian Riedlbauer
Partner
Digital Media
Digital Services
FinTech
Software/SaaS
Berlin
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Mohit Pareek, CFA
Digital Media
FinTech
Los Angeles
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