Number of gaming mergers and acquisitions and financing agreements increased by 39% in 2024
Gaming M&A and financing deals experienced a substantial 39% growth in 2024, reaching a disclosed deal value of $27.3 billion across more than 967 transactions. This positive trend comes as a beacon of hope during a period where industry revenues showed signs of stagnation, leading to the layoff of more than 15,000 employees, with statistics pointing out that one in every 11 developers faced job cuts in 2024.
Michael Metzger, a partner at Drake Star Partners, highlighted that public markets saw a glimmer of recovery, with the Drake Star Gaming Index showcasing a 10.4% growth for the year. This positive trajectory was driven by the growth in major components such as acquisitions, private financings, and stock market valuations, all of which saw an uptick during the year.
M&A activity in 2024 witnessed a 21% increase in deal volume compared to 2023, with 198 announced deals amounting to $10.5 billion in disclosed value. Particularly noteworthy were high-profile M&A deals orchestrated by private equity firms, including EQT’s $2.8 billion acquisition of Keywords and CVC’s $1.1 billion purchase of Jagex.
The financing sector also saw significant activity, with private placements reflecting the health of smaller startups within the gaming industry. A total of $4.8 billion was raised through 711 private placement deals, highlighting a 30% increase in total disclosed value despite an 8% decline in deal count from the previous year.
Investors secured over $1.8 billion in new funds, with notable new funds launched by various firms, signaling a positive outlook for continued investment in the game industry. The public market side saw notable deals, such as Shift Up’s successful IPO in South Korea and GameStop’s $3 billion fundraising initiative.
Looking ahead, the industry remains optimistic as new funds are raised, signaling a potential rebound from previous low points. The most recent quarter of 2024 saw a slight decrease in private placements and M&A deals compared to previous quarters, indicating some fluctuation in activity within the market.
Overall, the resilience and growth seen in gaming M&A and financing deals in 2024 underscore a positive direction for the industry, with signs pointing to continued investment and expansion opportunities in the coming years. Investors are showing confidence in the sector, paving the way for further growth and innovation in the gaming landscape.