Dealmaking activity in video game industry hit $86 billion in 2023

The global games industry witnessed a landmark year in 2023, with deals soaring to an unprecedented $86 billion, as revealed by the Drake Star Global Gaming Report for Q4 2023. This staggering figure was significantly propelled by Microsoft’s monumental $68.7 billion acquisition of Activision Blizzard, a deal that finally secured approval from regulators and concluded in 2023, nearly two years after its initial announcement.

Notably, the reported $86 billion accounts solely for disclosed figures from completed transactions, providing a glimpse into the thriving state of the industry. Throughout 2023, a total of 960 deals were announced, collectively valued at over $20 billion. The report indicates 163 mergers and acquisitions with disclosed deal values surpassing $10.5 billion. 

Key transactions during this period included Savvy Games Group’s acquisition of Scopely, the publisher behind Monopoly Go, the consortium led by Goldman Sachs acquiring Kahoot for $1.7 billion, and Tencent securing a majority stake in Techland for $1.6 billion.

Simultaneously, private games companies showcased resilience, securing over $3.5 billion across 750+ funding rounds, a modest increase from the $3.4 billion in 2020. Among these, mobile gaming claimed the lion’s share with 168 funding rounds, closely followed by blockchain (159) and platforms/tools (143).

The investment landscape also saw significant participation from venture capitalists, with Bitkraft, Andreessen Horowitz, Play Ventures, and Griffin Gaming emerging as the most active contributors to early to late-stage deals. Meanwhile, seed-stage ventures saw notable involvement from Goodwater Capital, 1Up Ventures, Sfermion, and Shima Capital.

Q4 alone witnessed a surge in M&A activity, with 43 deals announced, marking an increase from the 33 reported in Q3. Concurrently, private financing rounds secured over $600 million across 162 deals, with 85% of these financings directed toward seed and early-stage companies, reflecting a cautious approach to mid to late-stage investments.

As industry observers look toward 2024, Drake Star anticipates a return to pre-pandemic levels of deal activity, foreseeing a steady rise in M&A transactions. Major players expected to dominate this space include Tencent, Sony, Savvy Games Group, Keywords, and Take-Two. Furthermore, the report predicts an upswing in seed and early-stage funding rounds, particularly in the realms of AI, tools, AR, and VR. The second half of the year may witness a resurgence in companies seeking to go public, underscoring the industry’s enduring dynamism and adaptability.