Digital investment bank Digi-Capital’s latest report has revealed that M&A activity in the video game sector has generated $5 billion over the course of this year to date, smashing analysts' predictions for the level of activity in the marketplace.
The ‘Q3 2013 Update of the Global Games Investment Review,’ found that the average deal size increased by 12 per cent to $45.8 million over Q3 this year when compared to the same period last year, and the value of games M&A activity rose by one per cent to $3.3 billion.
The ‘Q3 2013 Update of the Global Games Investment Review,’ found that the average deal size increased by 12 per cent to $45.8 million over Q3 this year when compared to the same period last year, and the value of games M&A activity rose by one per cent to $3.3 billion.
Digi-Capital founder, Tim Merel, said: “When we anticipated a record for games [mergers and acquisitions] in 2013 two weeks ago in our Q3 2013 Global Games Investment review, we were not expecting that record within two weeks.” The fact that the vast majority of the M&A activity in the digital games sector came from the mobile games space, in particular the East Asian markets of Japan, South Korea and China, was not surprising - this was the same trend as was recorded last year.
The vast majority of activity came as a result of the purchasing deals and strong investments made by mobile developers, which made up 47 per cent of all games M&A value and 29 per cent of games M&A volume. They also made up 72 per cent of mobile app revenues over the course of this year, up from just 40 per cent in 2010, as well as 40 per cent of mobile app downloads via the iPad and iPhone. The report found that mobile games account for almost half – 43 per cent – of mobile app usage across iOS/Android tablets and smartphones, as well as for 67 per cent of all tablet usage.
The vast majority of activity came as a result of the purchasing deals and strong investments made by mobile developers, which made up 47 per cent of all games M&A value and 29 per cent of games M&A volume. They also made up 72 per cent of mobile app revenues over the course of this year, up from just 40 per cent in 2010, as well as 40 per cent of mobile app downloads via the iPad and iPhone. The report found that mobile games account for almost half – 43 per cent – of mobile app usage across iOS/Android tablets and smartphones, as well as for 67 per cent of all tablet usage.
The report confirmed that the mobile apps and games market was one of the fastest growing in the world, adding that companies should be considering the market for investment as a result of its position as a serious contender for being the largest technology market in the world today. Indeed, the "opportunity cost of not investing is potentially more significant than the investment itself. As well as being a major opportunity, mobile disruption could pose a significant risk for those who don’t learn how to play," argued the report.
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