The coronavirus cost on various industries has been immense, leaving many to look for strategic ways to recover. However, some sectors, like the gaming industry, have benefitted from the pandemic, as highlighted by the value of acquisitions in the industry.
Data presented by Buy Shares indicates that the gaming industry acquisition value has hit $19.24 billion for 37 deals on a year-to-date basis. The top ten acquisition value stood at $17.68 billion or 91.89% of all the 37 deals. In total, 2020 has recorded 131 sales, but the data is for deals whose value has been disclosed publicly.
ZeniMax acquisition by Microsoft was the biggest deal with a value of $7.5 billion. Playdots acquisition by Take-Two ranked as the tenth highest deal among publicly known transactions with a cost of $192 million.
The highlighted acquisitions are impressive, considering that the coronavirus pandemic threw the mergers and acquisition industry into uncertainty. Overall, the number of deals dropped significantly, with some deals being delayed. However, the gaming sector is among the pandemic beneficiaries, with most buyers aiming to cash in on already established game developers and publishers.
Although the gaming acquisitions appear not to have been slowed by the pandemic, some of the deals might have been negotiated before the health crisis set in.
Of importance is that no sector is entirely immune to the global decline in mergers and acquisitions due to the pandemic. However, due to increased consumer demand in games, developers of varying size and maturity became increasingly attractive targets to acquirers and investors. Most investors were still on the lookout for the best opportunities to deploy their cash reserves.
What the future holds for gaming acquisitions
Incredibly, a significant number of deals were finalized considering that the pandemic slowed down negotiation activity due to limitations of in-person meetings. Additionally, registering companies as part of approval slowed down as governments focused most of their energy on containing the pandemic. There were fears that these limitations could negatively impact the due diligence on some deals.
Overall, the gaming M&A activity took a significant hit due to the cancellation and postponement of business and consumer events and industry trade shows such as GDC and E3. Such events are critical as the introduction is made with the unlimited press hype. Despite the unprecedented global uncertainty, there are grounds for optimism for those seeking to make deals in the games sector-based on increasing consumer demand.