The game industry has seen a moderate return to investments, mergers, and acquisitions in the first quarter of 2024, following a slow year in 2023. According to the quarterly DDM Games Investment Review, total investments were pushed higher by Disney’s $1.5 billion investment in Epic Games. Although the industry has faced layoffs and turmoil, there has been a return to cautious growth in deal-making in Western markets, excluding China’s mammoth games business.
The 2023 deal-making market was muted compared to previous years, with big deals like Microsoft’s $68.7 billion acquisition of Activision-Blizzard contributing to inflated totals. However, 2024 is not expected to see deals of such a large scale. The $1.5 billion investment by Disney in Epic Games accounted for two-thirds of the total game company investments in Q1, contributing to a total of $2.2 billion from 178 investments.
Investors are still showing interest in companies developing blockchain-related games and technologies, with nearly $293 million going to 66 deals. Despite a slight decrease in value and volume compared to the previous quarter, interest in blockchain investments has been fueled by the spike in Bitcoin ETFs following regulatory approval in the United States.
Mergers and acquisitions in the first quarter of 2024 totaled over $2 billion across 41 deals. Excluding the Microsoft-Activision deal, M&A values showed a significant increase compared to the previous quarter, with the acquisition of Kahoot! accounting for a large portion of the deal value. eSports was the biggest segment by volume in M&A deals, reflecting a restructure in the industry after a spike in interest prior to the pandemic.
Initial public offerings in the game industry dropped to just one IPO worth $7.2 million in the first quarter of 2024, down 94% in value compared to the previous quarter. This is consistent with pre-pandemic levels, where quarters typically saw one to two IPOs. Poland continued to be a hotbed for gaming and IPOs, with local company ConsoleWay debuting on the NewConnect Exchange.
The report also tracked $13.7 billion in new venture capital funds raised by 28 funds, showing a slight decrease in value but an increase in volume. Silicon Valley’s big names like Andreessen Horowitz’s a16z, which raised $7 billion, and Y Combinator, which raised $2 billion, were among the biggest fund raises. Blockchain-related game funds are gaining traction, with a16z fund comprising a significant portion of the total raised in the category.
