Drake Star Partners: Gaming M&A and Investments Hit 651 Deals Worth $107 Billion in H1

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Game companies are still doing a lot of business. According to investment bank Drake Star Partners, more than 651 deals were announced or closed with a disclosed value of $107 billion in the first half of 2022.

That compares to 635 deals in the first half of 2021 with a total value of $60 billion, said Michael Metzger, partner at Drake Star Partners, in an interview with GamesBeat. And the whole of last year saw only $85 billion in transactions.

“The outlook remained healthy, given continued consolidation,” Metzger said. “Overall, buyers are much more focused on profitability than they used to be. Many of them were content (in the past) to focus on growth, even as companies lost momentum. money used to be. But it's now much more quality oriented, with an emphasis on cash flow than it was six or 12 months ago."

Most of this activity ($98.7 billion) took place in the first quarter, with Microsoft's pending acquisition of Activision Blizzard for $68.5 billion accounting for the bulk of the activity . If you look at the Q2 numbers versus Q1, there is a clear slowdown in the number and value of deals.

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But Metzger said the second-quarter results show the game holding up despite a general slump in crypto, the broader economy, the stock market and the tech industry. 2022 has been consistently the hottest year in gaming so far with staggering levels of transactions compared to previous years, Metzger said.

Merger and acquisition activity exceeded $95 billion in M&A deals announced or closed in the mobile, PC, console and esports industries. Six billion-plus deals boosted activity. Besides Activision Blizzard, big deals included Take-Two's purchase of Zynga, Sony's acquisition of Bungie, and Savvy Games Group's acquisition of ESL and FaceIt.

The big question

1H22 M&A transactions.< /figure>

I asked Metzger if we see any weakness in Q2 vs. Q1 thanks to fears around the war in Ukraine , inflation, imminent threat...