Article contributed by Callum Turcan, M&A Writer and Valuation Specialist at Corum Group
M&A activity in the Gaming sector was healthy during the first nine months of 2024 and is on pace to exceed total transaction volumes seen in 2023. Demand was strong from strategic and financial buyers sitting on trillions they must deploy. These acquirers are eager to grow their exposure to the sector as gaming remains an attractive entertainment option for households.
By 2026, the global video games market is expected to rise to over $321 billion, with social and causal gaming representing the majority of that, followed by PC games, console games and integrated video advertising. Six trends powering M&A activity in the Gaming sector in 2024 include esports, AI, indie games, AR/VR, advertising and market consolidation.
Starting with our first trend, esports. Competitive video game tournaments are becoming increasingly popular entertainment options for consumers. Showcasing this trend, DeltiasGaming.com, an esports and online gaming content provider, was acquired by Absolute Sports in August 2024 to deepen its presence in the US esports and gaming media publishing space.
Pivoting to our second trend, AI. This technology provides actionable analytics to gamers that improves their performance. Highlighting this trend, iTero Gaming, a developer of an AI-powered coaching solution for competitive gamers, was purchased in July 2024 by GIANTX [Giant-X] to create a training ecosystem that supports gamer development.
Moving on to our third trend, indie games. Companies that are developing attractive new titles are in high demand. Illustrating this trend, Ghostpunch Games, an independent game development studio for console, PC and online games, was bought by PTW America in August 2024 to offer its clients AI-based QA automation solutions.
Shifting to our fourth trend, AR/VR. Enterprises are leveraging this technology to create more immersive gaming experiences. In September 2024, Meta Platforms launched its Meta Quest 3S headset which can enable AR/VR gaming entertainment options for users. The headset has capabilities similar to the Meta Quest 3 at a lower price point.
Our fifth trend is advertising. Expanding into the gaming space offers advertisers a whole new way to reach audiences. In the US alone, the in-game advertising market is expected to reach $42.6 billion in 2024. There are an estimated 186.7 million digital gamers in the US, and companies are keen to get their message across to those users.
Finally, our sixth trend is market consolidation. Large firms are scooping up smaller firms to strengthen their market position and add new content to their portfolios. Showcasing this trend, Fantasma Games, a developer of online slot casino games, received a buyout offer in September 2024 from EveryMatrix, which has its own in-house game development studio, to strengthen its games division.
Companies that map to any of these six trends are seeing robust buyer demand. The Gaming sector is consolidating, and CEOs and founders should consider calibrating the market today. In the face of the proliferation of AI, Gaming firms are racing to adopt this technology into their solutions to improve corporate performance and make more engaging entertainment content.
