Q1’s $7.8 billion gaming investments and mergers set record for largest quarter since 2023.

Throughout 2024, the game industry faced challenges, with the prevailing sentiment being “survive until 2025.” However, as the year progressed, market research firm DDM began to notice positive indicators. Fast forward to the first quarter of 2025, and it is evident that the tide has turned for the game industry, particularly in terms of deals, be it investments or mergers and acquisitions.

Q1 of 2025 was not only the second consecutive quarter showing growth but also the most significant quarter since Q4 of 2023. A combined total of $7.8 billion was invested in games across 245 transactions, representing a 29% increase in value and a 1% increase in volume compared to the $6 billion invested in Q4.

Taking a closer look at the breakdown of Q1 2025, investments saw a substantial increase in value, reaching $4.4 billion across 190 investments. This marked a remarkable 370% increase in value compared to Q4, despite a slight decrease in volume. On the other hand, M&A deals in Q1 2025 amounted to $3.3 billion across 55 transactions, showing a decline in value from the previous quarter but a notable increase in volume.

What is particularly noteworthy about Q1 2025 is the surge in new fund announcements, totaling a staggering $21.8 billion across 43 funds. This represents a significant leap in value and volume compared to Q4, with five funds responsible for raising over $14.3 billion. This surge in new fund announcements is a positive sign for the industry’s resilience moving forward.

Mitchell Reavis, DDM’s games investment review director, highlighted the industry’s resilience, stating that despite the challenges faced in recent years, there are genuine signs of recovery. While layoffs and strategic adjustments are expected throughout 2025, the data indicates positive trends in investment and M&A activities.

Turning our attention to specific investments, Q1 2025 saw a total of $4.4 billion invested across 190 deals, with a significant portion going towards game developer investments, totaling $4 billion across 103 investments. Artificial intelligence and blockchain technologies continued to attract investor interest, with investments in these areas skyrocketing in value compared to the previous quarter.

In terms of M&A activity, Q1 2025 saw deals totaling $3.3 billion across 55 transactions. The decline in value compared to the previous quarter was primarily driven by undisclosed M&As, which accounted for a significant portion of the volume. Mobile and console/PC segments led the way in M&A deals by value, with Asia, Europe, and North America emerging as key regions for M&A activity.

Overall, Q1 2025 painted a positive picture for the game industry, with increased investments, mergers, and acquisitions contributing to a sense of recovery and growth. With new funds on the horizon and a strong showing in both investments and M&A activity, the industry seems to be heading in the right direction as it moves beyond the challenges of recent years.