Latest Report
Q3’s $7.1B Investments/M&As/IPOs Receives a Bump During Industry Shakeout
Q3’s $7.1B Across 166 Transactions is Up 769% in Value from Q2’s $818.4M and 202 Transactions
Looking forward to Q4 2023, 2023 Will Become a Record-Breaking Year Due to Microsoft’s $68.7B Acquisition of Activision Blizzard (closed in October 2023)
After nearly two full years of enduring macroeconomic headwinds of high inflation and recession fears, an ongoing crypto winter, and slower economic growth, the games industry had a nice bounce after a full-year of declined values.
To refresh memories, the pandemic caused the games industry to see a massive increase in revenues while much of the world was locked in their homes and turned to games to stay occupied. This surge in revenue required studios to focus on game upkeep, hire more employees for future ambitious titles, find funding, and/or look for potential exits as revenues/valuations were at all-time highs. Now as the world returns to normalcy, the audience is no longer locked in doors, causing a backpedal in strong financials. This has resulted in mass layoffs and/or studios tightening their expenses and restructuring operations. The decline in financial stability and transactions for gaming has been quite a lengthy one, but Q3, with its increase of 769% over the previous quarter, has shown a glimpse of hope in still a very shaky time.
Looking forward in Q4 2023, Microsoft officially closed its $68.7B acquisition of Activision Blizzard in October 2023. This transaction is so large it will make 2023 a record-breaking year across investments and M&As in combined value that is greater than the sum of the previous ten M&A quarters which totaled $67.3B. It is worth noting that most company valuations remain dampened and revenues are lower. As a result, 2023 is not a true “reversal” of declines seen from previous quarters.
In our report, we also highlight big stories that impact the industry, including:
• After Closing in Q4, Microsoft + Activision Blizzard Makes 2023 Largest Year on Record For Video Game M&As
• 2023 Will Be a Historical Year For Investments/M&As
• Strategic and Financial Investors/Buyers for More Investments & Acquisitions
• Unity Causes Industry Revolt After Price Restructure
• Most Game Studios Embracing AI While Some Wait for Legal Clarity
• SEC Regulations Continue to Batter Blockchain Games Sentiment
• Gaming and Entertainment Companies Continue to Expand IPs Through Other Mediums
• More Strategics Attracted to India Despite Online Gaming Tax Now Live
We’re excited coverage continues from Forbes. Read more in our free summary or full paid reports.
Games Investments by Segment Q3 2023
Source: DDM Games Investment Review
Top 5 Private Investments Q3 2023
Category |
Date |
Company |
Value ($M) |
Stage |
Company Description |
Country |
Mobile |
14 Aug 23 |
Candivore |
100.0 |
Mid/Late |
Mobile games developer |
Israel |
Tech/Other |
18 Jul 23 |
Futureverse |
54.0 |
Early |
AI-driven blockchain metaverse infrastructure provider |
New Zealand |
Tech/Other |
03 Aug 23 |
Inworld AI |
50.0 |
Mid/Late |
AI-based virtual character creation platform provider |
USA |
eSports |
06 Jul 23 |
Veloce Esports |
50.0 |
Mid/Late |
Content creation service provider and esports organization |
UK |
Mobile |
20 Sep 23 |
Proof of Play |
33.3 |
Early |
Blockchain games developer and infrastructure provider |
USA |
Source: DDM Games Investment Review
Top & Median Investments Q3 2023
Segment |
AR/VR |
Console/PC |
eSports |
MCG |
Mobile |
Tech/other |
No. Investments |
4 |
15 |
10 |
10 |
34 |
22 |
Top Deal by Value ($M USD) |
Wicked Saints Studios’ $3.5M Seed investment from Riot Games, Oregon Venture Fund, BRONZE, 1Up Ventures, Precursor Ventures, and others |
Mountaintop Studio’s $20.0M early-stage investment from an unknown investor |
Veloce Esports’ $50.0M mid/late-stage investment from GEM |
Gardens’ $31.3M Series A investment from Lightspeed Venture Partners, KRAFTON, Dreamhaven, Tirta Ventures, Rendered VC, Transcend Fund, FunPlus, and others |
Candivore’s $100.0M mid/late-stage investment from Haveli Investments, Union Tech Ventures, O.G. Venture Partners |
Futureverse’s $48.0M Series A investment from 10T Holdings, Ripple
|
Seed by Volume |
75% |
60% |
60% |
50% |
68% |
50% |
Series A by Volume |
25% |
13% |
0% |
20% |
6% |
14% |
Other by Volume |
25% |
27% |
40% |
30% |
26% |
36% |
Q3 Median Segment Investment ($M USD) |
1.6 |
5.0 |
1.0 |
2.8 |
2.0 |
6.0 |
Q3 Segment Total Value ($M USD) |
7.2 |
75.0 |
83.2 |
58.7 |
270.5 |
253.5 |
Source: DDM Games Investment Review
Games M&A by Segment Q3 2023
Source: DDM Games Investment Review from Disclosed Transactions
Top M&As Q3 2023
Category |
Date |
Company |
Acquirer |
Value ($M) |
Company Description |
Country |
Mobile |
12 Jul 23 |
Scopely |
Public Investment Fund of Saudi Arabia |
4,900.0 |
Mobile games developer/publisher |
USA |
Mobile |
18 Aug 23 |
Rovio |
Sega |
775.4 |
Mobile games developer |
Finland |
Mobile |
29 Sep 23 |
InnPlay Labs |
Playtika |
300.0 |
Mobile games developer |
Israel |
Tech/Other |
28 Aug 23 |
Azerion (assets) |
Playtika |
161.9 |
Monetization/publishing/advertising/ games developer |
The Netherlands |
eSports |
01 Aug 23 |
Heroic Group |
Krow Bidco |
5.5 |
eSports organization |
Norway |
Source: DDM Games Investment Review
Games IPO by Quarter ($M)
Source: DDM Games Investment Review
Top Fund Announcements Q3 2023
Announced Date |
Firm |
Fund Name |
Fund or Company Focus |
Fund Size ($M) |
Funding Stages |
21 Sep 23 |
True Light Capital, Temasek |
True Light Fund I |
Digital transformation, energy, biotech; previous mobile, MMO developer and blockchain/gaming tech investments by parent company Temasek |
3,300.0 |
Early, Mid/Late
|
26 Jul 23 |
Goodwater Capital |
Two funds: Goodwater Capital V, Goodwater Infinity III |
$600M for Early-stage Fund V and $400M for Opportunity Fund II for consumer tech, financial services, healthcare, and entertainment; previous gaming tech investment |
1,000.0 |
Early, Mid/Late |
11 Jul 23 |
Vertex Ventures |
The Vertex Master Fund III (in progress) |
New Digital Economy, Deep Tech, Healthcare, Consumer, Fintech, Healthtech / Agritech; previous mobile and blockchain infrastructure investments |
1,000.0 |
Early |
25 Sep 23 |
Dawn Capital |
Two funds: Dawn V, Dawn Opportunities III |
$620M for Dawn V and $80M for Dawn Opportunities III for B2B software; previous esports investments |
700.0 |
Mid/Late |
18 Sep 23 |
Blockchain Capital |
Two funds: Early-Stage Fund VI, Opportunity Fund I |
Approximately 2/3s for Early-Stage Fund VI and 1/3 for Opportunity Fund I for gaming, consumer, decentralized finance and infrastructure; previous blockchain console/PC, eSports, and gaming tech investments |
580.0 |
Early, Mid/Late |
Source: DDM Games Investment Review
Q3 Vs Q2 2023
Source: DDM Games Investment Review
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