Games deals value dropped 81% in 2015

January 31, 2016


The last time games deals looked like last year, the iPhone had just launched – it was 2007.

The total deal value (in dollars) across games investments, mergers and acquisitions (M&As), and IPOs dropped below $5 billion in 2015, down 81 percent on the prior year. Games investment value fell by 30 percent, games M&A deal value dropped 75 percent (excluding Activision-Blizzard/King which was announced but hasn’t closed yet), with the games IPO market at its lowest level for a decade. After more than $25 billion of games deals in 2014, the difference last year was remarkable.

The M&A numbers also include three publicly listed Chinese games companies that were taken private in 2015. Excluding those deals, the total market for games exits (selling companies or going IPO) was down 93 percent from 2014. Ouch.

Digi-Capital Games Deals

Back to the future

Games investments went back to 2010 levels, with the $1.1 billion in 2015 led by mobile games, games tech/other (including eSports), console/PC games, MMO/MOBA games and AR/VR games. As the State of Nevada now treats fantasy sports as gambling, the large DraftKings and FanDuel investments from last year’s numbers are excluded.

Digi-Capital Games Investments 2015

Silence of the games

The take-privates and delistings of the 3 Chinese games companies (in MMO/MOBA and mobile games) accounted for over half of the total $3.7 billion games M&A deal value in 2015. Again excluding them, the remaining $1.6 billion of games M&A was led by console/PC games and mobile games. (Note: the chart below includes the take-privates for completeness)

Digi-Capital Games M+A 2015

We anticipated what might happen at the start of last year, and unfortunately it came to pass. Our recent forecast of games revenue growth slowing to 7% annually between 2016 and 2020 doesn’t provide obvious signs of a games deals resurgence, despite Activision-Blizzard/King giving the 2016 market a $5.9 billion boost when it does close as anticipated in Spring. A genuine catalyst is needed, so maybe the new reality of AR/VR might turn things around.

You can learn more on who is still investing and buying in Digi-Capital’s new Games Report 2016