Digital Development Management (DDM) released its regular report on games industry investments, mergers, and acquisitions today, with the second quarter showing across-the-board declines from a first quarter that was already the worst in more than four years.
Investments were down 34% to $676 million, even though the number of deals tracked was only down 14% to 127. Blockchain gaming investments were particularly hard hit.
“As if the prolonged crypto winter wasn’t softening blockchain investments enough, the SEC clamping down on blockchain regulation caused investments to plummet even further to $243 million across 45 investments,” DDM said in its report.
That total is 38% lower than what blockchain gaming investments managed in the first quarter.
The total value of mergers and acquisitions tracked by DDM in the quarter was $108 million, down 81% quarter-over-quarter. The number of M&A deals dropped 76% to 31.
IPOs fell even more. With just 1 relevant IPO in the quarter (Polish VR developer VRFabric), the total market cap of IPOs in the second quarter was down 98% to a little over $11 million. (The first quarter had four IPOs to work with).
This is the weakest first half of gaming investment DDM has tracked since 2016, but there’s hope for a turnaround.
The third quarter is guaranteed to see a bump thanks to the $4.9 billion acquisition of Scopely by Savvy Games Group (now known as Steer), and the full year may still wind up being a record if Microsoft’s pending $69 billion acquisition of Activision Blizzard is able to close.