Gaming M&A Market Trends in 2023

The gaming industry's mergers and acquisitions market has undergone significant changes in recent years. Following the pandemic-fueled boom, the sector is now experiencing a period of rationalization, with companies reassessing their growth and investment strategies. According to Shum Singh, founder of Agnitio Capital, the current market is characterized by longer deal times and increased scrutiny from buyers. Despite this, Singh remains optimistic, citing the presence of 'plenty of cash' and interest from strategic buyers, private equity companies, and financial institutions. A panel discussion at the Montreal International Games Summit, featuring experts such as Marc Alloul, Jakob Longer, and David Dropsy, delved into the nuances of the current market. The panelists agreed that while the market has slowed, there is still a strong appetite for investment in the gaming sector. Longer noted that companies are now more cautious, with a focus on strategic acquisitions that align with their business needs and goals. Dropsy highlighted the importance of due diligence and the increasing use of performance-based earn-outs in deal structures. Alloul emphasized the need for founders to understand their motivations for selling and to be 'deal-ready' at all times. The experts also stressed the importance of having a clear understanding of the company's valuation, financials, and growth prospects to navigate the complex and evolving gaming M&A landscape.