Gaming M&A deal count down 60% YoY per Drake Star report
In Q3 2023, gaming companies announced 33 M&A transactions worth roughly $5 billion according to Drake Star’s latest report. While announced deal value is up compared to recent quarters, the quarter had the lowest number of transactions since Q1 2021. Compared to the same quarter of last year, the number of announced deals fell 60%.
“The low number of M&A transactions reflects the uncertainty in the market and depressed public gaming company valuation,” Michael Metzger, Partner at Drake Star, told GamesBeat. He noted that smaller and mid-sized companies often see a lag between initiating and closing a deal, which could account for the dip in annouced deals.
“On the positive, Q2 2023 and Q3 2023 saw a significant increase in deal value compared to Q4 2022 and Q1 2023,” Metzger said.
Meanwhile, private placements are following a similar pattern, though the decline in the number of deals was more moderate. There were 182 private placements in Q3 2023 — down 20% from Q3 2022. Across these deals, disclosed funding totaled roughly $1 billion.
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Continuing recent trends, the vast majority of funding rounds — about 85% — were placed with early stage start ups. However, these start ups brought just less than half of funding placements. These early companies are closing smaller deals on average, which accounts for this difference.
This has been the case across tech and not specific to gaming. “Well-funded VC funds are seeking for experienced founders and disruptive early-stage investment opportunities that might yield excellent
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