As reported by VentureBeat, the first quarter’s $39 billion value of 280 announced transactions was higher than $33 billion reported for all the 664 deals of 2020, according to InvestGame.
According to InvestGame, the Q1 game industry doubled the growth compared to the first two quarters of last year. So far in 2021, 249 deals have closed with a total value of $25 billion. Another 31 deals have been announced but not yet closed, leading to the $39 billion figure.
Ed Fries, from 1Up Ventures, said to VentureBeat that he has been in touch with 80 venture capitalists, who were pouring money into new game studios and game-related tech startups. About $2.6 billion was invested in game companies in the first quarter, up from $1.4 billion in the first half of 2020.
Meanwhile, Microsoft’s purchase of Bethesda for $7.5 billion, is also happening at a faster pace. The $14.3 billion worth of deals in the first quarter are up 5.9 times in deal value from a year ago. While Microsoft closed its big deal, Electronic Arts also sped up its pace with the acquisitions of Codemasters for $1.2 billion and Glu Mobile for $2.1 billion.
Besides, public offerings of game companies, either through quick special purpose acquisition companies or initial public offerings or direct listings, have also exploded. InvestGame said the $8.3 billion worth of offerings over 36 deals in Q1 were up 29 times from a year earlier in deal value.
VentureBeat said that even as the pandemic didn't subside in some parts of the world, games remained strong while other industries stayed weak. And that made investors take notice, as they fled those industries and poured their money into game investments and public offerings.
There is no doubt that a broad economic slowdown could trigger a meltdown. But as growth in other markets has slowed, games have become a hot new industry, leading to a slew of financing deals so far this year. Embracer Group raised $890 million. Roblox raised $520 million and went public at a $41.9 billion valuation. Late-stage investors poured $100 million each into Rec Room and Manticore Games.
Others that went public or announced they would included Playtika, Nexters, Playstudios, Huuuge Games, TinyBuild, AppLovin, and Krafton. In the whole, there were 21 public offerings in Q1 in games, compared to seven in Q1 2020.
Another $900 million in capital was raised by nine gaming-focused VC funds in the last nine months, with BITKRAFT continuing to lead the chart and participating in 10 deals with a total deal value of $160.5 million.
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