Gaming VC activity remains subdued in Q2 2023 | PitchBook

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Venture capital funding for games continued to stagnate in Q2 2023 according to PitchBook’s latest market report. While the total value of deals was up 12% from the first quarter (totaling $1.1 billion), the number of closed deals declined 29% to 110.

Both figures fell dramatically compared to 2022, with deal value down 80% and the number of deals falling 57.5% year-on-year. Notably, VC deal values in gaming peaked in Q2 2022 which partially explains the steep drop-off.

PitchBook noted that deal value was concentrated in more late-stage companies than in past quarters. These more mature companies brought in $611 million or 55.5% the quarter’s funding total. However, early-stage and angel and seed deals accounted for 71.8% of VC games funding in Q2 2023. While undisclosed deal totals are impacting this gap, the data suggests that VC funds are being more selective with their resources amid economic uncertainty.

Moreover, PitchBook notes that VC exits have been few and far between in 2023. In the first half of the year, 19 exits closed for a total deal value of $200 million. While Atari’s $776.2 million acquisition of Angry Birds developer Rovio will boost the annual total, 2023 is on pace to be the slowest year for exits since 2012’s $1.5 billion. Macroeconomic headwinds are likely depressing the market for potential exits.

Over the last year, gaming content and development startups have attracted the most venture capital funding. Development companies include game engines, developer tools