Red-hot gaming market to breach $150 billion in deals, fundraising - report

KRAFTON

31/01/2022 11:00

By Nivedita Balu
    Jan 31 (Reuters) - After kicking off 2022 with two mega
acquisitions, the video gaming sector is racing to a new record
of $150 billion in deals, financing and IPOs this year,
according to investment banking firm Drake Star Partners. 
    In just the first few weeks of 2022, Microsoft Corp  MSFT.O 
pitched nearly $70 billion for Activision Blizzard  ATVI.O  and
Take-Two Interactive  TTWO.O  bid $11 billion for Zynga
 ZNGA.O .
    That has helped the total value of deals this year already
near 2020's record haul of $85 billion from more than 1,159
announced or closed deals. Last year's figure was almost three
times higher than in 2020.  
    The pandemic has ushered in a new era for mobile gaming. It
opened an accessible gateway for new gamers when lockdowns first
struck, while easing curbs pushed even seasoned players to
switch from consoles to phones as they stepped out more.
    The industry is also consolidating in the pursuit of new
revenue streams, blurring the lines between PC and mobile gaming
companies. 
    "We're in the middle of a large number of deals right now
and the state continues to stay very hot," Drake Star's Michael
Metzger said.
    Some companies that have not made any big plays so far -
including Amazon  AMZN.O  and Netflix  NFLX.O  - are expected to
make new bets, Metzger said. In Asia, Tencent  0700.HK , Byte
Dance, Netease  9999.HK , South Korea's Krafton  259960.KS  and
Japan's Sony  6758.T  are on the radar.
    "Metaverse", long part of the gaming lexicon, has now
entered the tech zeitgeist after Facebook changed its name to
Meta Platforms  FB.O  in a nod to its focus on the online realm
where people can connect through augmented or virtual reality. 
    Private placement deal value, volume and financing at or
above unicorn level are set to break records, with investments
from the likes of Tencent and Netease. 
    In IPOs, EPIC Games and Discord are the names to watch,
according to the firm, whose clients include Codemasters and
Echtra Games.
    
    

 (Reporting by Nivedita Balu in Bengaluru; Editing by Devika
Syamnath and Aditya Soni)
 ((Nivedita.Balu@thomsonreuters.com; Twitter: @niveditabalu;))