Gaming M&A is immersed in 2024, but raising funds doubled | Quantum Tech Partners

The game mergers and acquisitions decreased by 3% to $ 11.5 billion in 2024, but the raising of funds has doubled, according to a report by Quantum Tech Partners, a M&A consultative company.

And as for 2025, the winds are shifted as a favorable direction, said Alina Saltis, a partner of Quantum Tech Partners, in an interview with Gamesbeat.

Gaming M&A was flat and carried most of some big deals, such as the purchase of EQT from Keyword Studios for $ 2.8 billion and the acquisition of Superplay from Playtika for up to $ 1.95 billion. The amounts for 2024 and 2023 turn into several flat years after bursting during a pandemic era with a zero rate interest that stimulated transactions.

M&A and fundraising are positive indicators of the growth of the industry, as they mean that capital is flowing into the industry and veterans they pay off. But it’s not always “good news.”

This is a case in which the financial winds of the industry did not blow in the same direction as the trends in employment. The activity of the fundraising transaction increased, for example, but the cuts in 2024 exceeded 15,000. A total of approximately 34,000 jobs were lost in the last 2.5 years, and this month alone is Hiring a start of the speed of cutsAmir sattwat said, champion of the resources for the work of the game, this week. In short, while 2024 was a terrible year for job loss and closing the studio, it was a better year than before for investment.

“We expect fine growth in 2025 and there are several factors there. I think the factors are that the balances beyond the board are so much healthier. There is also a lot of money from focusing on the right projects, reducing teams and handling things that probably didn’t make sense in the first place, “Saltis said.

Cash companies have scale and revenue and are likely to look. Quantum Tech Partners is one of many companies that report financial results for 2024 in games, and data are not always arranged, as different companies are the number of transactions in different ways. Others who have published the report of 2024 are Drake star partners., Convoy ventures and Hiro CapitalS

“We had a significant pickup in conversations from buyers who are looking for high quality assets that have revenue and profit. So it goes back to the basics with regard to quality companies attract quality attention and how to understand how to build a quality company. “

A better prospect of finance

The strategic reasons for transactions are improving and this is a trend that can contribute to the inertia of the industry, Saltis said. Growth has become a motivator, although some are made for reasons such as paying for key people.

“For 2025, we see an improvement in M&A and fundraising activities,” Saltis said. “Large drivers include Switch 2, which comes out and Grand Theft Auto VI launches at some point this year. This will attract brighter attention. ”

In 2024, there were 996 fundraising deals. The average increase in the deal was $ 27 million, about double last year. In 2024, the average value of quarterly funding was $ 4.3 billion, better than $ 2 billion in 2023 and $ 4 billion in 2022. Over the past five years, over $ 93 billion has been raised in the last five years. The biggest investment in 2024 was Disney’s $ 1.5 billion in Epic Games.

“As for investments, investments are growing as a whole, but that doesn’t feel like that. If you talk to anyone in the industry, everyone is struggling to raise funds. VC are much more slow when moving. Publishers are much more slow to deploy. They deploy smaller sizes of inspection, but the data shows that we are double in the overall raising of funds from early to growth to late stage, “Saltis said.

She added: “What you see is the average increase in a deal is also doubled. And so we went from a place where most of the deals were about $ 12 million last year, now they are $ 27 million, and quarterly activity is constantly double in 2024. Due to 2023. If you think about it, it’s not what it’s not what it’s not what it’s not what it’s not what you think You hear every day in conversations, at least with early -stage companies. “

One explanation for this: In 2023, about 25% of all funding went to start -up games at an early stage. There was a pickup truck this year, but only 15% went to the deals at an early stage. So the largest pickup is in late-stage deals, Saltis said.

In 2024, much of M&A’s activity was led by Embracer’s unraveling, where it sells departments to pay off its debt. For example, the Embracer Group has sold Tencent’s Easy MINICLIP Brain Department for $ 1.2 billion – about 10% of the deal in 2024.

About $ 1.76 billion was raised by Web3 companies in 2024 within 325 deals. The value of the transaction increased by 52%and the number of transactions increased 17%. The biggest increases were $ 350 million for endless reality, $ 140 million for Zentry, $ 80 million for a personal planet, $ 50 million for Spfweb3meta and $ 43 million for Azra Games.

“The endless reality had a massive circle and in January (raised $ 3 billion),” Saltis said. “They use this capital to buy to build a large metal platform.”

Public evaluations

Quantum Tech Partners also calculates a global game index based on the evaluations of some of the public game companies.

Companies have been traded in health three times revenue and 13.2 times EBITDA (profit before interest, taxes, depreciation and depreciation), a measure of profitability. Companies have over $ 60 billion in cash.

“The public peers group is healthy. It’s in a healthy place. This is a year of the year. This is a wide group of companies that include Western and Eastern developers, as well as some of the engine companies. And so, he is tracking well, “Saltis said. “I think the important piece here is the money on the balance. About $ 20 billion out of those $ 60 billion are from Tencent alone. “

Quantum Tech Partners does not include revenue in games or cash in companies such as Apple, Google and Microsoft. The bottom of the market was around October 2022, although things were still under the crazy peaks during the pandemic in 2021 and 2020.

“This should lead to more activity. I think the revenue many times are healthy. Ebitda is certainly healthy at 13.2 times. And the devil is indeed in the details of every individual business and the history of growth. But from a general point of view of the lens, it is in a healthy place. “

Success of indie

Although many more games are being published now, there are some Indians who stand out as winners.

The success for small budget games that hit Big Fan bases included Animal Well (a developer who sells over a million copies), chained together (one Dev, 5.6 million copies), Dark and Darker (25 Devs, three million copies), Balatro (one Dev, five million copies), the Lords mansion (one Dev, 2.7 million copies) and Palworld (10 Devs, 100 million copies).

“To be Inda means that your budget is smaller and today we need to have smaller budget games that are being built and out and just pleased the audience. How you delight an audience. Well, you do not need to have photorealistic radiation and open worlds that are bigger than our land to get attention. “

Emerging opportunities in games

Eastern content like Black Myth: Wukong sells well, as well as games of games that gamers played in the 1990s. Another bright place was Roblox, which has 89 million active players, as well as Fortnite, who had 110 million active users a month. Roblox had $ 864 million in LTM developer exchange fees, and Fortnite paid $ 352 million in developers. The combined total Roblox and Fortnite was paid $ 1.2 billion to developers in 2024.

“As we look at where the industry is growing, there are still many blue oceans, and alternative platforms are largely these capabilities, such as Roblox, UEFN and HTML5 games,” Saltis said.

And Telegram, which has 950 million crypto-minded players, came out of nothing as a massive force in the Web3 game. The games increased by 1% of the Telegram audience in 2023 to 20% in 2024. Discord is also about 90% gamers and this is another 200 million players, she said.

Distribution is still important in games, and play companies are struggling to reach players through alternative app stores, given the grip of Apple and Android stores. This means that 30% of Game Dev’s revenue goes to pay for large platforms. This is a great impact and game companies have not escaped it, despite antitrust lawsuits from epic games and governments around the world.

Geopolitically, one of the big changes that Saltis sees is the growth of the publication of decisions and financing decisions taken in both South Korea and Japan. Sony, for cases, transferred many financial solutions back to Japan. These types of companies tend to continue to invest in difficult or good times. China could see continuing struggles given the nature of its market, and tariff wars would not help.

“One of the things that were surprising to us is the goodness of using AI in the game, where you usually see that games are at the forefront in technology,” Saltis said. “Ai feels as if moving so fast all around the game and there is a lot of resistance. I understand why from certain perspectives. “