Mobile has fundamentally disrupted the games market Investment bank Digi-Capital has published the Q2 2013 Update to its Global Games Investment Review (free Executive Summary at www.digi-capital.com). Commenting on the Review, Digi-Capital Founder Tim Merel said, “Mobile has fundamentally disrupted the games market across sectors globally. Mobile internet is the most disruptive technology today. Mobile internet could create up to $11 Trillion in value globally by 2025 (across all industries, not just games), built on a well developed mobile tech stack. Mobile internet connected devices, mobile broadband subscriptions, mobile data usage and mobile apps growth are driving disruption across all tech related markets. For games, the transition to free-to-play and communal gameplay is changing sector dynamics, delivering up to 10x-20x revenue uplifts for market leaders.
Commenting on the Q1 2013 Update, Digi-Capital Managing Director Tim Merel said, “The top line is that there is a significant connected games investment gap, despite strong underlying growth, exits and returns. It’s something we’re looking at very closely.
As we anticipated, the games investment market showed clear signs of transition in Q1 2013. Connected games revenue continues to grow across mobile and online, with the highest growth in high engagement mobile/tablet games. The games investment market stabilised to levels similar to 2012 after last year’s dramatic decline, with mobile/tablet and enabling tech/gamification dominating. Games M&A was similarly robust compared to 2012’s record, with non-US acquirers accounting for 6 of the top 10 games M&As to date this year.
Commenting on the
Review, Digi-Capital Managing Director Tim Merel said, “The games investment
market is in transition in 2013.
games continue to deliver strong growth and returns. Online/mobile games could
grow total video games market size to $83B and take >55% revenue share at
$48B in 2016F (12.2% CAGR 12F-16F). Games market M&A + IPO returns
delivered > 6x investment value return on investment (ROI) between 2005 and
2012. Games IPOs have followed a 2 year cycle since 2005, with potential in
2013/2014 after no substantial games IPOs in 2012.
Digital investment bank Digi-Capital has just published the Q3 Transaction Update of its Global Games Investment Review 2012.
Commenting on the Update, Digi-Capital Managing Director Tim Merel said “Games M&A for 2012 is at a run rate 40% higher than 2011 (the previous record year), having delivered 105% of the transaction value of all of 2011 by the end of Q3 2012. As we anticipated, 6 of the 10 largest games M&A transactions to Q3 2012 were made by Chinese, Japanese and South Korean acquirers. The broader games investment and M&A trends from H1 2012 have continued through Q3 2012, with new emerging trends which could be borne out during Q4. Our prediction that the Zynga IPO might have been the high water mark for Social Games 1.0 investment has been validated, with the VC market moving sharply away from that sector. For public companies, the Update also details how companies in some sectors and geographies are trading at 12 month highs, while others are not enjoying the same level of appreciation by investors. The combination of accelerating M&A, changing investment and valuations has seen an acceleration in our Strategic Review and transactional work for games companies, including strategic pivots across sectors/geographies, sell and buy side M&A, and fundraising/investment to accelerate growth.
This article first published in GamesBeat, GamesIndustry International and PocketGamer in July 2012.
Digital investment bank Digi-Capital has just published the Q2 Transaction Update of its Global Games Investment Review 2012.
As anticipated when the Review was published earlier in the year, 2012 is proving to be a bumper year for games M&A globally. Although we are only 6 months into 2012, games M&A has already reached 88% of the transaction value of all of 2011 (the previous record year). The first half of the year has also borne out our prediction that the Zynga IPO might be the high water mark for Social Games 1.0 investment. More than ever, now looks like the time for strong independent and larger, more established games companies to consider their strategic options.
(This article first published on GamesIndustry.biz, GamesBeat and Gamasutra)
While recent headlines such as “Game sales crash!” and “Games retail
collapses!” don’t paint a rosy picture, we believe the report of the
death of console games is an exaggeration. Yet an uncertain future faces those
console games companies that choose not to evolve rapidly.
The great games market split: the
Big V revisited
In early 2010 there was strong reaction to our views that some console games publishers were "going down a very risky path...in the long term...they run the risk of becoming like traditional media companues. Cash generative, but declining and cost driven." So we were not surprised by the even stronger reaction last year when we said that "the games market had fundamentally
split into “Value” and “Volume” markets, both by sector and geography. The two
speed market this is creating may have more rapid and profound effects on the
games market than it did on the media market, with meteoric rises for some and slow
going for others.” We called it the “Big V”: