Jul 19, 2022 - Technology

Investment in game companies soared in first half of 2022

Group shot of young human video game characters waving

Characters from Subway Surfers, whose studio was purchased by Tencent. Image: Sybo

Despite some signs of possible industry slowdown, money is still pouring into video game companies big and small.

Driving the news: Some 651 gaming M&A or investment deals were announced or closed in the first half of the year, totaling more than $107 billion, according to a new report from Drakestar Partners.

  • Those totals include Microsoft’s $69 billion bid for Activision, Take-Two’s purchase of Zynga and myriad others, among them an industry-leading 47 M&A deals in mobile.
  • The second quarter of 2022, saw a little comedown, with 60 announced deals compared to 74 from the same quarter in 2021 (but up from 47 in Q2 2020).
  • Those April-June deals included Embracer’s acquisition of Tomb Raider and that franchise’s development studio, as well as Tencent buying Subway Surfers maker Sybo.

Between the lines: Even in a sector in which investment is spread to all kinds of games and platforms, continued enthusiasm for blockchain stands out.

  • More than half of the investment in early-stage companies — over $2.2 billion — went to blockchain and NFT startups, according to the report.
  • Drakestar also notes the second quarter saw the start of four nine-figure funds devoted to investing in blockchain gaming.
  • This happened despite the recent collapse of the hottest blockchain game around, Axie Infinity, and no other prominent success stories in that space of late.

Some notable numbers from the report:

  • 7 — number of deals from the busiest acquirer, Tencent
  • 58 — number of deals from the busiest investor, Animoca Brands
  • $2 billion — the amount of money raised by Epic Games in the first half of the year. Drakestar says those six months saw “a record-breaking $7B+” invested in private game companies.

The bottom line: There’s a lot going into blockchain, but it’s far from all going there — and not all going into Microsoft’s big deal either.

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