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Gaming deals cooled down significantly in Q1 2023 - report by Investgame.

According to a recent report by Investgame, the gaming industry witnessed a total of 193 deals in 2023, amounting to $2.1 billion in combined value. The average deal value across private investments, mergers and acquisitions, and private offerings stood at $10.8 million. Private investments accounted for the highest total deal value ($1 billion) and the largest number of deals (141), with an average deal value of $7.1 million.

While the deal value remains substantial, these figures indicate a noticeable slowdown compared to previous years. Private investments declined by 71% from $3.3 billion in Q1 2022, and public offerings reached $700 million in Q1 2022, surpassing the total for Q1 2023 by 20%. Moreover, mergers and acquisitions experienced a staggering 94% year-on-year decrease ($11.4 billion in Q1 2022). This return to normalcy follows a period of unprecedented growth.

During the pandemic, all three deal categories witnessed significant increases. Public investments grew by 276% between Q1 2020 and 2021, while M&A activity increased by 495% over the same period. Public offerings experienced the most substantial surge, rising by an astonishing 2952%.

Could a rebound be on the horizon? The report highlights reasons for optimism regarding future investments. Although there was a substantial year-on-year decline in private investments, the quarter-on-quarter statistics present a different story. The number of deals rose from 114 to 141, with deal value only slightly decreasing from $1.1 billion to $1 billion. This suggests a halting of the negative trend.

While mergers and acquisitions reached their lowest point since 2019, Q2 has already surpassed the total with two significant deals: Savvy Games Group's $4.9 billion acquisition of Scopely and Sega's $0.8 billion acquisition of Rovio. The combined value of these deals alone amounts to $5.7 billion, marking an enormous 850% increase from Q1. Additionally, if Microsoft's acquisition of Activision Blizzard is finalized later this year, it will exceed the total combined deal value for the entire year of 2022.

Despite optimism in private investments and M&A, public offerings continue to struggle with no signs of significant improvement. However, Investgame predicts notable offerings from major strategic players in the gaming industry in the coming year.

In a previous analysis conducted by Investgame in February, the report examined the impact of the pandemic on the gaming industry.

Source: Lewis Rees, Staff Writer at Pocket Gamer

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