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Drake Star releases its predictions for 2023 in gaming

Look ahead to a year of consolidation and diversification
Drake Star releases its predictions for 2023 in gaming

Drake Star has released its prediction for the state of gaming in the coming year, and is forecasting that, while 2023 will be a year of heavy consolidation, diversification, and investments in the industry, this will be at a smaller scale than in 2022.

Several companies are listed as buyers to watch, including some of the biggest players in the industry, such as Tencent and NetEase, as well as several who have made strategic moves in 2022 and are expected to continue that trend, such as Netflix and Embracer Group.

Saudi Arabia is expected to be the source of several major acquisitions and financing deals through Savvy Gaming Group, in part due to the $35 billion earmarked for gaming deals by the sovereign wealth fund PIF.

Console and PC gaming will see the bulk of consolidation, while effective user acquisition will continue to be a problem for mobile game makers as developers worldwide continue to adjust to the post-IDFA market. However, the report notes that Drake Star expects “a very active mobile M&A market in 2023,” as the buyers to watch have all grown concerned with their place in the mobile gaming market in recent years.

Microsoft, for example, has repeatedly claimed that its ongoing attempts to acquire Activision Blizzard is due to the strength of the company’s mobile gaming branch.

A focus on smaller companies

Drake Star forecasts a strong focus on smaller studios this year. While 2022 was dominated by several major acquisitions, 2023 is likely to see buyers and investors spread their nets wide in the hopes of attracting a variety of smaller developers rather than fewer large ones.

Notably, some of the industry’s greatest acquisitions in 2022 came under heavy scrutiny from both competitors and regulators due to the possible effects they could have on competition, which may have convinced buyers to focus on building revenue through multiple smaller streams, as opposed to focusing on larger studios. This could be a particular boon to the mobile sector due to the lower development cost and high market penetration, perhaps making them attractive prospects for buyers looking to maximise profit while minimising potential controversy.

We listed several of the companies mentioned in this article among the top 50 mobile game makers of 2022.