New report says the games industry is "showing signs of a recovery"

gamesindustry.biz:

The games industry is "showing signs of a recovery" from "record-breaking layoffs, closures, and business turmoil."

That's according to DDM's Games Investment Review, which reports "a sizeable uptick" in investments, recovering ground lost in 2023.

Whilst mergers and acquisitions (M&A) remain "low" – even taking out last year's anomalous $68.7bn generated by Microsoft's acquisition of Activision – and not a single quarter in 2023 surpassed $1.3 billion, both Q1 and Q2 in 2024 have "each reached over $2.2bn."

DDM suggests the half-yearly uptick suggests in just the first half of 2024, investments totalled $8.1bn – almost doubling the $4.5bn investment volume seen for the whole of 2023.

However, though Q2 was "great for games investments," the report authors say M&As reached $845m across 40 transactions, which is "a drastic decline QoQ" (-59% in value and -5% in volume over Q1’s $2.1bn across 43 transactions).

IPOs also "suffered" as no company had a public debut in Q2 2024, breaking a near five-year streak of at least one company going public per quarter since Q3 2019.

"When you look at our dataset, which covers 16 years of games investments, M&As, and IPOs, I can’t help but be excited for the near future," said Mitchell Reavis, manager of the DDM Games Investment Review.

"The last year has been a really shaky time for the games industry, and with the resurgence in games investments, it appears the shakeout is coming to an end.

"While M&A and IPOs have declined marginally quarter-over-quarter, values are down simply from the lack of disclosed deals," Reavis added.

"The unfavourable conditions have allowed companies to be more strategic by not disclosing the purchase price of a company. As studio financials become more stable, we expect more values to be disclosed boosting the major exits that are currently in the works like EQT Group’s £2.2bn acquisition of Keywords Studios and Animoca Brands’ potential IPO in 2025."