The scale of transactions in games in 2021 is already double the total amount in 2020 dollars, according to a new industry report.
Why is this important: 2021 has seen a dizzying amount of mergers, acquisitions and investments as everyone wants in the industry, and as the big players already inside are spending a lot to get bigger.
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Between the lines: Industry analysts at Drake Star Partners had some 844 deals in the first nine months of this year, totaling $ 71 billion for deals announced and / or closed.
This includes major third quarter deals such as Netmarble’s $ 2 billion acquisition from Tencent’s $ 1 billion casino game developer SpinX purchase from the group Sumo (most recently the developers of the PS5 launch game “Sackboy: A Big Adventure”), and Unity’s purchase from the Parsec cloud streaming platform for $ 320 million.
The most active buyer was the enigmatic consortium of Swedish studios Embracer Group, which bought 18 companies. They are followed by Tencent (14) and Epic (5).
The game studios themselves have raised mind-boggling numbers, with ProbablyMonsters raising $ 200 million in fundraising and the makers of “Splitgate” 1047 Games raising $ 100 million, both in the last quarter.
The big picture: The investment doesn’t stop at one thing, as foreigners buy (Netflix buying its first studio), mid-size publishers try to grow (see studio purchases by Team17 and Focus) and the big players ( Zynga, Roblox, ByteDance) are growing.
Nine of the 15 biggest contracts in the third quarter were for mobile.
And then there is the blockchain, a gaming sub-sector with little coverage but heavily invested. Drake Star estimated that NFT / Blockchain game companies have raised $ 1.8 billion since January.
The bottom line: As a lot of money changes hands, it’s unclear what all of this activity is doing in terms of quality of play and player happiness, which tend to really determine success.
Some of the most avid video game buyers have a habit of ruining studios. Others have proven to be good parents.
Everyone says the deals will lead to big plans, of course.
But the competition remains fierce – and relatively healthy – in an industry in which anyone around the world can craft the next surprise hit, even if no one has bought them for a billion dollars (yet).
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