Deals are often made in the video game market, mainly with key acquisitions or partnerships that allow new franchises to shine, or older ones to flourish.. That said, this new article from VentureBeat indicates that some of these deals haven’t been happening in the gaming industry as often.
The site’s numbers indicate that total deal value, including investments, mergers and acquisitions and new IPOs, fell 82% from 2014’s statistics, and that games investments as a whole also fell 35% from the previous year. Mergers and acquisitions dropped 74%, and the IPO market is also in lowly figures.
Previous numbers from the last quarter indicate that these deals dropped 90%, with the total market for game exits reaching a 93% drop without take-privates, according to the article.
More specifically, in dollar sense, the drop in deal value could see a huge loss for this year, going down as far as $4.3 billion in total, compared to $24 billion in the previous year. The market hasn’t seen that low a number since 2007.
In terms of investment, over $700 million was put into games for the first three quarters, mainly across mobile and technology sectors, followed by console and PC.
Meanwhile, Chinese MMO game developer Perfect World and mobile games company CMGE, both of whom were delisted from the market after mergers, continued to clean up with $1.2 billion in games deals. However, this is still a drop over last year, which including acquisitions of Mojang (of Minecraft fame) by Microsoft, Twitch by Amazon and Oculus VR by Facebook.
That said, there’s still time in the remainder of the year for big deals to be made with partners, and there’s hardly any sort of deathknell on the video game industry, which continues to thrive in PC, console and the mobile front. In fact, the Chinese tech and gaming giant NetEase announced a $2.5 million investment in the startup developer, Reforged Studios. But the drop in “big deals” is noticeable, although we’re certain we haven’t seen the last of them.
