Dealmaking activity in video game industry hit $1.1B in Q2’23

According to a new report from Pitchbook, the video game industry recorded 110 deals with an average deal value of $10 million in the second quarter of 2023. The overall deal value of $1.1 billion represents a 12.1% QoQ increase and 82.1% YoY decrease. On the other hand, the total deal count for the quarter saw a 29% quarter-over-quarter decrease.

The most notable deals of the quarter includes Anzu’s $48.0 million Series B, Metagame’s $100.0 million early stage, Mythical Games’ $50.0 million Series C, CoreWeave’s $421.0 million Series B, and Gardens’ $31.4 million Series A. 

Per the report, game development startups led all segments with $488 million in deal value, narrowly edging out the content segment with $483.4 million in deal value. Publishers, developers, and studios led all subsegments with $304.1 million in VC investment, followed by technology services at $437.5 million—which was boosted significantly by CoreWeave.

With $611 million, late-stage deals made up the majority of VC investment in Q2 2023. This was the biggest such delta since Q3 2021 and the first time late-stage capital beat other categories since Q1 2022. 

Early-stage, angel, and seed deals made up 71.8% of all venture capital deals, despite late stage investments outperforming them in terms of deal value. This level of engagement in startups confirms the confidence of investors in the sector’s potential for long-term growth. Geographically, Asia ($400.0 million) and Europe ($300.0 million) are still trailing North America ($1.3 billion) in terms of revenue through H1.

Triumph Labs, a startup that uses its own SDK and engine to enable game creators to implement real-money tournaments in their mobile games, is singled out as a noteworthy success in the report. In its most recent Series A, the company raised $10.2 million, bringing the total raised to $14 million and the valuation to $51.2 million. A 92% chance of success is what Pitchbook predicts for the startup’s exit.

According to a recent report from DDM Agency, the video game industry drew $1.2 billion in the first quarter of 2023. For the quarter, M&A transactions accounted for 40 deals totaling $415 million during the quarter, with an average deal value of roughly $10.375 million.