Drake Star has published the Q3 2022 edition of its Global Gaming Industry Report providing key insights into the gaming deal activities for the first nine months of the year.
So far, the year had a record $123B+ in total deal value for almost 1000 announced and/or closed deals. The report also analyzes the key trends in the third quarter of the year.
“2022 has been a mixed year for gaming,” said Michael Metzger, Partner at Drake Star. “We saw some of the largest M&A deals ever at the start of the year and then experienced a notable slow-down in Q2’22 due to global macroeconomic challenges.
With an increase in M&A and Financings volume in Q3, we anticipate healthy deal activity and possibly even some mega deals for the rest of the year and beyond.”
Key stats for the first 9 months of the year:
$102B in announced and/or closed M&A activity across mobile, PC / console, and esports, including the largest-ever gaming acquisition of Activision by Microsoft. Embracer remained the most active consolidator in the industry. PC / console and mobile went head-to-head with 68 and 64 transactions, respectively.
$9.6B has been raised through 685 financing rounds for private companies, including 15 large $100M+ raises. The most active VCs included Bitkraft, a16z, Galaxy Interactive, and Griffin Gaming.
More than $3.4B was raised by blockchain / NFT gaming companies with almost half of the total amount raised by early-stage companies.
The Q3 report analyzes the first nine months of 2022 in terms of deal activity and volume across market segments (M&A, private placements, public markets), M&A activity by volume and multiples, public market performance and valuations, and discusses the most active gaming buyers and venture capital (VC) investors.
The report further focuses on the market activities for Q3 2022 by breaking out the most significant deals across M&A, private financings, and public market updates. As the broader markets witnessed a slowdown, gaming was also impacted but M&A and financing activities remained largely stable.
Q3 saw a significant increase in M&A volume to 81 announced deals, up from 70 deals in Q2’22. Unity’s announced $4.4B acquisition of ironSource was the largest deal in the quarter.
While the majority of the deal values were undisclosed, many of the top buyers were active including Embracer with 8 deals (Middle-Earth Enterprises, Tripwire, etc.), NetEase (Quantic Dream), Sony (Savage Games, Repeat.gg), Zynga (Storemaven), and Scopely (Stumble Guys).
Private financings also increased in Q3 to 216 deals, up from 169 financings last quarter. A total of $2.3B was raised, including large financings for FromSoftware ($260M from Tencent and Sony), Loot Mogul ($200M), Limit Break ($200M), and Animoca ($185M).
While the Crypto market continued to be under pressure, investors continued to show strong interest in blockchain gaming companies. Half of the total amount raised and 40% of all financing rounds for private gaming companies were investments in blockchain gaming.
In public markets, Faze Clan ($750M valuation) went public through a SPAC, while Valofe ($3.5B valuation) and Asia Innovations Group ($2.5B valuation) announced new SPAC deals. Technicolor Creative Studios spun off to focus on VFX and games, now listed on the Paris stock exchange at $1B valuation.