Konvoy’s mid-year review has found that gaming continues to be a "top growth sector across the tech investing landscape." This is attributed to the sector sitting at an intersection of several key market-leading trends: entertainment, interactive media, and social engagement.
2021 saw a record-breaking year across most sectors, and gaming is well-positioned for another strong year. 221 gaming companies raised $2.6 billion across Angel, Seed, and Series A-D funding rounds in the first quarter of 2022 – over twice the funding raised ($1.2 billion) and 1.54 times the number of deals (143) in Q1 2021. The amount raised is 35 per cent of the total $7.4 billion raised throughout the whole of 2021.
Stable investment in the sector
Q2 saw a decline in both metrics, with $1.2 billion (a decline of approximately 50 per cent) raised across 161 deals (a decline of 27 per cent.) The report states that “this is a pullback from an incredibly active 4Q21 and 1Q22”.
When compared to the same period in 2021, the results are more mixed: while 2Q22 saw a 14 per cent funding decrease from 2Q21 ($1.5 billion), the deal volume is 15 per cent higher (139, according to data by CBInsights).
These indicators suggest that despite the more intense slowdown in other sectors, fundraising for the gaming market is relatively stable.
The $68.7 billion acquisition of Activision Blizzard by Microsoft earlier this year was the biggest in gaming history, making Microsoft the third-largest gaming company by revenue, behind only Sony and Tencent. Bolstered by the strong performance of both its catalog, such as Honor of Kings and Clash Royale, and subsidiaries such as Riot Games,
Tencent experienced nine per cent growth in 2021 to $32.2 billion, and that growth is projected to continue throughout 2022 thanks to the recent opening of the company’s new Western publishing division, Level Infinite, in 4Q22.