- Playtika’s $700 million acquisition of SuperPlay was the largest deal of the quarter
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M&A activity in games has grown for the fourth consecutive quarter in Q3 2024 after reaching $2.5 billion in disclosed deal value.
That’s according to a new Q3 2024 Drake Star global gaming report, which showed that Playtika’s $700 million acquisition of SuperPlay, which could rise to $1.95bn, was the largest deal of the quarter.
Private financing raised $1.1bn across 181 deals, showing a growth in value despite a stable number of deals. Major financings included Infinite Reality ($350m) and Hybe IM ($80m).
Patron raised $100m for its second early-stage gaming fund. Tencent-backed Shift Up saw its stock surge 50% after a $320m IPO and Nazara raised over $100m in equity. Meanwhile, Embracer Group refinanced its credit line ($652m), and Kakao Games raised $198m in bonds exchangeable with Krafton shares owned by the companny.
Over 90% of investments went to seed and early-stage companies, while growth-stage studios continue to face funding challenges.
The report noted that blockchain attracted 32% of all investments, while platform/tools accounted for approximately 23%.
Andreessen Horowitz and Bitkraft were the most active large gaming VCs over the past year, followed by Play Ventures.
Transformative deals on the horizon
Drake Star’s report states that M&A activity in games is expected to strengthen throughout the rest of 2024 and 2025, driven by lowering interest rates and a broader recovery in the public market.
Industry leaders like Tencent and Take-Two are expected to make “large transformative deals” , while mid to small-sized deal growth will likely persist.
As for funding deals, Drake Star predicted that smaller games studios with limited options to funds may opt for early exits by joining larger companies.
Elsewhere in the report, the investment bank said artificial intelligence, mixed reality, and platform tools remain “hot segments” for private financing. As the market recovers, IPO-ready gaming companies may start pursuing listings in 2025, it said.
You can read the full report here.
