Investment in and around the games industry dropped by 79% in 2023

While in America it dropped 86%… But with profits and share prices on the increase, is the scene now set for a bounceback?

Investment in and around the games industry dropped by 79% in 2023

If you’ve had the feeling that the shine has rather diminished around gaming investments through 2023 then new broad-sweeping data from Crunchbasewould appear to confirm your worst fears.

Seed funding and growth-stage investment in companies in and around the games sector are at a multi-year low. Showy, heavyweight investment prior to (and thus boosting) IPO offerings are a thing of the past and action and investment remain “muted”.

A simple at-a-glance graph showing the amount of cash invested and the number of funding rounds are both in decline, dropping a sizey 79% from 2022 to 2023.

And these global trends are even more pronounced when the microscope falls upon the United States as a single market. In America investment cash being poured into games previously in 2022 turned into a trickle in 2023 - down 86%.

It all adds up to a curious dichotomy with the large-scale industry itself performing well with hit games such as Zelda: Tears of the Kingdom and Jedi: Survivor and Spider Man 2 all making the numbers and the share prices of giants such as Take 2, Electronic Arts, Nintendo and Sony all ending the year higher than they began.

Now you see it…

And yet the confidence in latent growth (and the willingness to supply the cash in order to secure it) appears to have evaporated, meaning that while the giants continue to make money, smaller companies - many of which are on mobile - are feeling the squeeze. The Web3 and NFT sectors appear to be particularly affected with what little investment there has been directed to more traditional, less speculative projects.

The result has been a grim year with Crunchbase reporting no late-stage venture rounds of $100 million or more. Likewise no significant IPO filings or public market debuts. All of which are in sharp contrast to the Covid-fuelled highs of 2022.

But there is of course a brightside. There’s clearly now plenty of profits sitting waiting for the right project to best use them and - as these things run in cycles - the scene is set for a bounceback and return to form in 2024. There’s certainly plenty of companies, projects and talent looking for work that will all be hoping that this proves to be the case.

Editor -

Daniel Griffiths is a veteran journalist who has worked on some of the biggest entertainment media brands in the world. He's interviewed countless big names, and covered countless new releases in the fields of videogames, music, movies, tech, gadgets, home improvement, self build, interiors and garden design. Yup, he said garden design… He’s the ex-Editor of PSM2, PSM3, GamesMaster and Future Music, ex-Deputy Editor of The Official PlayStation Magazine and ex-Group Editor-in-Chief of Electronic Musician, Guitarist, Guitar World, Rhythm, Computer Music and more. He hates talking about himself.