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Gaming M&As down 43% year-on-year while deal value falls 69%

Q1 2022 saw the most spending on M&A in the past five years
Gaming M&As down 43% year-on-year while deal value falls 69%
Date Type Companies Involved Key Datapoint
Feb 29, 2024 report Quantum Tech Partners Deal value down 69%
  • Quantum Tech Partners' latest report reveals everything M&A, funding, and job cuts
  • The report shows M&A deal value to be down 69% year-on-year
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Quantum Tech Partners has released its 2024 Gaming Industry Report diving into everything M&A, funding, and job cuts. Layoffs have become increasingly commonplace over the past year, frequent throughout 2023 and continuing into 2024, affecting everyone from Sony to Gameloft.

Within Quantum’s report, capital market withdrawal is particularly noteworthy, as is the slowing rate of mergers. In fact, 2023’s $11.8 billion spend is the lowest yearly total on deals regarding mergers and acquisitions since 2019. The fall from 2022 is especially steep, down by 89% from $106.4 billion, though this was of course inflated by unprecedented acquisitions that broke prior games industry records.

Namely, those were Take-Two’s $12 billion acquisition of Zynga and Microsoft’s $69 billion acquisition of Activision Blizzard.

But these record breakers don’t take sole responsibility for the 89% spending disparity; Quantum Tech Partners co-founder Alina Soltys told GamesBeat: "Even with the Activision Blizzard deal removed, the M&A deal value is still down about 70%."

While Microsoft’s Activision Blizzard acquisition took until last October to go through, Quantum’s report is based on when deals were struck.

A tough act to follow

Even excluding the mighty Microsoft acquisition, Q1 2022 saw the most spending on M&A in the past five years at almost $25 billion. The first quarter carried 2022 thereafter, with approximately $5 billion in Q2 deals, $7.5 billion in Q3, and less than $1 billion in Q4.

Though it didn’t reach 2022’s peak, 2021 was a more consistent year with approximately $15 billion in three of its quarters, with only Q2 letting it down at around $3 billion.

Again, this emphasises the decline in 2023, with a peak of roughly $7 billion in Q2. Q1 and Q4 both failed to reach $1 billion while Q3 deals came to roughly $4 billion.

Notably, not only was the total value of 2023’s acquisitions down - the number of deals was too. All in all, deal counts have been falling 43% year-on-year on the M&A front, while transaction value is down 69% year-on-year.

The decline in deal numbers began in Q4 2022, down from a peak of approximately 130 deals in Q1 to just over 40 at the end of the year, but this wasn’t enough to impede the year’s overall figures. By comparison, 2023 peaked at almost 60 in Q1 with the rest of the year seeing only around 50 deals per quarter.

The difficulties in 2023 were apparent from Q1 though, with only $1.2 billion in investments and M&A combined.