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2022 has seen 976 deals, with Microsoft’s acquisition of Activision Blizzard topping the charts

Drake Star analyses the gaming markets in its Global Gaming Industry Report
2022 has seen 976 deals, with Microsoft’s acquisition of Activision Blizzard topping the charts
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Drake Star has released its Q3 2022 Global Gaming Industry Report, delving into the state of the gaming sector over the first nine months of the year, and breaking down the biggest deals of the period.

The collective disclosed value for all of the deals in the year to date is $123 billion, split between 976 deals for an average value of $126 million. Of these deals 22 have been closed, for a total valuation of $8 billion.

The majority of these deals were at the beginning of the year, although Drake Star believes further deals could be announced throughout the remainder of 2022.

“2022 has been a mixed year for gaming,” said Drake Star partner Michael Metzger. “We saw some of the largest M&A (Mergers and Acquisitions) deals ever at the start of the year and then experienced a notable slow-down in Q2 2022 due to global macroeconomic challenges. With an increase in M&A and Financings volume in Q3, we anticipate healthy deal
activity and possibly even some mega deals for the rest of the year and beyond.”

Microsoft’s acquisition of Activision Blizzard is cited as a particularly valuable one. At $68.7 billion, this deal is the most expensive video game acquisition of all time, and more than 50 percent of the total deal value for the period. Other highlighted deals include Unity’s merger with ironSource, NetEase’s acquisition of Quantic Dream, and Sony’s acquisition of its first mobile studio, Savage Game Studios.

Embracer group lived up to its name over this period as the most active consolidator in the industry, with two deals in the top fifteen of the quarter, valued at a combined $1.065 billion.

Private financings reached $10 billion through 685 deals, including fifteen funding rounds earning over $100 million each. The most active venture capitalists included Bitkraft, a16z, and Galaxy Interactive.

Despite the so-called crypto winter, blockchain and gaming companies earned a collective $3.4 billion in investment, with Animoca Brands, Shima Capital, and FTX showing particular interest in such companies.

A busy quarter

Although the volume of deals slowed down somewhat in Q2 with 70 announced deals, Q3 saw a sharp upswing with 81 new deals. Unity’s acquisition of ironSource was the largest deal of the quarter at $4.4 billion, however the majority of deals didn’t disclose their values. Embracer Group made eight acquisitions during this quarter, the most of any company.

Private financing also saw a sharp upswing quarter-on-quarter, with 216 deals compared to 169 in Q2. These deals include Tencent and Sony’s $260 million investment in developer FromSoftware and $185 million raised by Animoca Brands across two funding rounds.

Tencent’s recent acquisition of a 49.9 percent stake in Ubisoft parent company Guillemot Bros is also identified as a standout investment.

Investors showed strong interest in blockchain games in Q3, despite the turbulent crypto market. More than half of the total raised and 40 percent of the quarters total deals.

In July, Drake Star forecast that the total deal value for 2022 would exceed $150 billion.