Serious Business of Games - July 2024
Elliot Hollander
Business Development | Revenue Operations | Growth | Leadership | Gaming | Player Experience
Welcome to the 2nd edition of the Serious Business of Games. In this series of articles, I will weed through the industry news of the last weeks and share the overarching trends that I identify across the market.
In this edition, I'll be covering the continued consolidation in the market, which is seen across game platforms, and I’ll highlight a few eye-catching acquisition and funding rounds.
Consolidation in the market continues
As is well-known and much documented, during the COVID-19 pandemic, the gaming industry saw an unprecedented boom in what was already an upward revenue trend. An industry recognized for its ability to engage audiences had become the holy grail of growth in entertainment.
Content streaming platforms like Netflix don't regard other streaming platforms as the main obstacle to growth, as much as they regard gaming as an engine of growth. With the boom in revenue and engagement in gaming came the influx of huge masses of cash . However, as the world emerged from the pandemic and Apple and Google turned the Privacy-screws tighter and tighter, the frenetic growth of the industry started to slow.
In this new landscape, growth is no longer generated through astute Marketing and user acquisition. It is too costly and reserved for the select few that can allocate tens of millions of dollars to launch a new game (Supercell, Zynga for example).
These circumstances lead gaming companies and venture capitalists to look for other ways to provide value to shareholders and generate growth: M&A.
The consolidation of gaming companies has become a defining trend in the last 2 years. Major players in the industry, flush with capital, are increasingly turning to mergers and acquisitions to maintain their competitive edge and expand their market presence. The motivations behind these acquisitions are multifaceted, ranging from the desire to acquire popular intellectual property and talented development teams, to the strategic aim of diversifying portfolios and reducing market risks. And growth of course!
The gaming industry's consolidation wave continues to reshape its landscape as companies across all segments—mobile, console, PC, subscription-based, and Web3 gaming—actively pursue acquisitions and investments. Gaming M&A activity in Q1 2024 outpaced all quarters of 2023, according to a report from Drake Star Ventures . This trend has continued into Q2 and a few recent acquisitions and investment rounds are highlighted below that exemplify how the new (AI, web3) and the old (f2p) merge together, with the hope of heralding a new golden age in gaming.
领英推荐
Some recent examples of M&A and investment
Pixelberry Studios , known for its interactive story game Choices: Stories You Play, was recently acquired by Series Entertainment , the developer building games based on generative AI. Series Entertainment hopes to build on a game that has generated more than half a billion (USD) in revenues. By applying their unique generative AI-based technology, the company expects to create more content (Stories) and deliver more value to the player.
In another significant move, Tripledot Studios acquired ZephyrMobile , the developer behind the popular casual game "Get Color." This acquisition , in my opinion, underscores the strategic and basic importance of quality game development. Looking at the uniqueness and style of Zephyr’s games, the quality of design and attention to aesthetic detail shines through. It’s also an interesting move by Tripledot as it solidifies their commitment to the casual game genre. It seems free-to-play on mobile is viewed by Tripledot as an avenue of growth after all.
In this podcast , Tripledot co-founder Akin Babayigit shares his views on the business of making great games, which I'm sure is what he recognized in Zephyr.
In July, Infinite Reality , “an innovation company powering the next generation of digital media and ecommerce through AI and immersive technologies” closed a $350 million financing round at a $5.1 Billion valuation . This is one of the first really big investment in the metaverse space for a long time, and comes after the company itself spent more than $800 million in acquisitions in 2024 alone.
The company also acquired Infinite Reality Enterprise (Formerly Landvault) , a metaverse development platform, for $450 million, positioning itself as a new kid on the metaverse block. What this means in terms of broader web3-adoption, no one knows. What it does seem to signify is a renewed confidence in web3 from the investor market. Will the consumer market follow?
A new hope
These examples of M&A and investment illustrate that the gaming industry's consolidation is not confined to a single segment but spans the entire spectrum of gaming platforms. Mobile and free-to-play games remain attractive targets due to their broad user base and potential for high returns. Console and PC games continue to be pivotal, with companies seeking to secure popular intellectual property and seasoned development teams. And Web3 gaming and metaverse projects seem to be picking up at a renewed pace, offering the industry the hope of a new frontier.
About the Author
Currently serving as the Director of Growth and Business Development at 5CA , the Player Experience outsourcing company working with AAA global game studios, Elliot collaborates with studio management, product teams and player experience teams, drawing on 15+ years' in the gaming industry. His previous roles include Head of Business Development and Partnerships at Huawei and Director of Strategic Partnerships at Plarium , the studio behind worldwide hit game ‘RAID: Shadow Legends’, where he managed key strategic relationships with major industry stakeholders such as 苹果 , 谷歌 , and 微软 .
I Help Tech companies transform their vision into paying products. Proven success with $100M+ Industry Leaders, Align your product with customers and investors in 90 days
1 个月???? ??? ?? ?? ???????? ??? ????? ???? ?????? ???: ?????? ????? ??? ??????? ?????? ??????, ?????? ?????? ??????,?????? ????? ????????. https://chat.whatsapp.com/BubG8iFDe2bHHWkNYiboeU