Game Business Investment Facing A Chilly Fall, But A Much Warmer 2024

Game Business Investment Facing A Chilly Fall, But A Much Warmer 2024

Uncertainty over the big Microsoft MSFT -Activision ATVI deal, increasingly assertive regulators, the disruptions of AI hype, and a weak economy with fast-rising interest rates and several big bank failures all bode poorly for the near-term investment climate for the formerly superheated videogame sector, said speakers at today's LA Games Conference in Los Angeles. "(Mergers & acquisitions), deal multiples have really come down a lot," said Vivienne Zhao, Lazard Freres director of interactive media & technologies. After a huge spike in dealmaking early in the pandemic, the market has cooled considerably, though Zhao said that's mostly about the market returning to pre-COVID activity levels. "The perspective on near-term M&A is very mixed," Zhao said. 'The key takeaway, with M&A, is that it will be a little more difficult executing. Valuations are challenged, interest rates are rising, general political and international economic uncertainty. That said, companies are looking for growth. We are going to see a lot of activity" later in the year and into 2024. Already this spring, Zhao and others pointed to two big deals for mobile game companies, Scopely (by Saudi-backed Savvy Games Group for $4. 9 billion) and Rovio (by Sega for $775 million). Upcoming deals are