Gaming deals cooled down significantly in Q1 2023

Q1 2023 saw a total of 193 deals made in the gaming industry for a combined total of $2.1 billion dollars, according to a new report by Investgame.

The average deal value across private investments, mergers and acquisitions, and private offerings was $10.8 million. Private investments represented both the highest combined deal value ($1 billion) and the number of deals (141), representing an average deal value of $7.1 million.

While the deal value remains high, and is indicative of a robust industry, these figures represent a notable cooling off compared to previous years. Private investments fell 71% from $3.3 billion in Q1 2022, while public offerings stood at $700 million in Q1 2022, 20% more than the total for Q1 2023. Perhaps most startlingly, mergers and acquisitions are down 94% year-on-year ($11.4 billion in Q1 2022). This represents a return to normalcy following a period of unprecedented growth.

Deals in all three categories saw sharp increases during the pandemic. Public investments grew 276% between Q1 2020 and 2021. M&A’s grew 495% over the same period. And public offerings saw the largest increase during this time, rising by an incredible 2952%.

Is a rebound ahead?

The latest figures may appear to set the scene for further downturn but the report goes on to cite reasons to be optimistic regarding the state of investments in coming periods.

While there was a significant year-on-year decline in private investments, the quarter-on-quarter statistics are a different matter. The number of deals rose from 114 to 141, while deal value fell only slightly from $1.1 billion to $1 billion. The report notes that a negative trend has been halted.

While mergers and acquisitions hit their lowest point since 2019, Q2 has already seen the $600 million total eclipsed by two deals alone – Savvy Games Group’s $4.9 billion acquisition of Scopely and Sega’s $0.8 billion acquisition of Rovio. The combined total of these deals alone comes to $5.7 billion, a massive 850% increase from Q1. Additionally, should Microsoft close its acquisition of Activision Blizzard later this year, it would exceed the total combined deal value for the entirety of 2022.

Despite optimism in both the private investment and M&A worlds, Investgame notes that public offerings continue to struggle, with no signs of significant improvement. However, it does predict some significant offerings from some of the industry’s big strategic players for the coming year.

In February, Investgame examined the pandemic’s effect on the gaming industry.

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