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.
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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.
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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).
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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.
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Nine of the 15 biggest contracts in the third quarter were for mobile.
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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.
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Some of the most avid video game buyers have a habit of ruining studios. Others have proven to be good parents.
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Everyone says the deals will lead to big plans, of course.
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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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