Gaming mergers and acquisitions are booming thanks to the industry’s growth

At the GamesBeat Summit, one of the topics discussed was the recent boom in mergers and acquisitions in the games industry. Whether it’s the Microsoft-Activision acquisition or Take-Two’s acquisition of Zynga, these deals are having a huge impact on the gaming world.

One of the panels at the Summit, M&A: Explaining how the Gaming World will change, delved into this topic. The panel was moderated by Alina Soltys of Quantum Tech Partners and consisted of Frankie Zhu, investment banker at LionTree, and Chris Petrovic, CBO of FunPlus.

How the rise of gaming is changing things

At the beginning of the panel, Zhu pointed out that the gaming pinnacle has changed the landscape over the past year. “Player engagement and the number of players in the ecosystem has increased steadily. This has been a boon for many IP owners as they realize the power of gaming as a medium to monetize their IP.”

Petrovic also noted that companies are making these investments with growth in mind. “These public companies, like Microsoft and Take-Two, while they might have their individual different reasons for acquiring, ultimately wanted access to more scale, access to more intellectual property, access to more audiences, and maybe a diversified audience across across platforms. The market rewards that.”

Will we see more M&A?

The panel also talked about the future, including whether we will see more mergers and acquisitions in the future. Zhu said, “I think right now is an all-time high in terms of gaming innovation, which is rapidly expanding the market. You look at the proliferation of smartphones: Basically every smartphone owner is now a gamer, whether they call themselves a gamer or not. They also have cloud gaming that breaks down the barriers to traditional gaming. Traditionally, to try or play any of these products, you had to own very expensive hardware. Those barriers are being broken down and more of the world is being opened up to this space.”

Petrovic also pointed out that the gambling industry is likely to change with the rise of Web3. “[The creators of Web3] are creating an environment that a lot of us don’t understand because the types of products they make and the target audience that consumes those products aren’t your traditional “gamers” and the Western markets that we’re used to… I think what the gaming industry will try to see if this web3 platform is a real opportunity, if it starts to attract more traditional audiences to which we are used to market games and to which we are used, in addition to the already existing ones … And then whether it actually offers solutions to problems consumers have regarding gaming opportunities.”