Data & Research

Mobile companies dominate game investment, taking 31% of cash so far in 2012

M&A activity also on the rise

Mobile companies dominate game investment, taking 31% of cash so far in 2012
Investment bank Digi-Capital has released its regular review on the world of game funding and investment for the first six months of 2012.

It notes that thanks to the likes of Zynga, 2012 is looking like a bumper year in terms of mergers and acquisitions.

The whole of 2011 saw 113 deals, generating $3.4 billion, while 2012 has already had 51 deals, generating $3 billion.

This is an average of $59 million per deal compared to an average of $30 million in 2011.

Feeding through

Breaking down this activity into sectors, mobile dominates in terms of the volume of deals, but MMO and Social/Casual are more significant in terms of the value of each deal.

This makes sense as M&A activity happens to mature companies, and hence this activity reflects the investment that's been made in MMO and social developers over the past years.

Digi-Capital suggest Zynga's IPO will be seen as the "high water mark for Social Games 1.0 investment".

Driving force

Looking at activity in terms of investment into start up companies rather than M&A, things are rather different in 2012, however.

2011 was a record year with 152 transactions worth $2 billion.

To-date, 2012 has seen 73 transactions, worth $481 million. That's an average of only $7 million per deal compared to $13 million in 2011.

Yet in terms of sector, mobile dominates both in terms of the number of deals and value.

It accounted for 31 percent of investment in terms of transaction value and 49 percent in terms of transaction volume.

"Mobile (mobile-social in particular) might continue to be a driving force for games investment through 2012," reckons Digi-Capital, also pointing to the importance of Chinese, Japanese and South Korean companies in future deals.

The Global Games Investment Review 2012 report in full can be downloaded for $999.

[source: Digi-Capital]
Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.