Current Investor Sentiment in the Video Game Industry

The video game industry has experienced significant investment over the past five years, with numerous studios being established, floated, and acquired. However, the current market is facing challenges, including post-pandemic declines in sales and revenue, rising costs, and economic uncertainty. As a result, investors are becoming more cautious, with some expressing concerns about the sector's ability to weather economic downturns. According to Spike Laurie, partner at Hiro Capital, the investment landscape has been 'wild' in recent years, with many investors pouring money into the sector without proper due diligence. This has led to the formation of poorly structured companies and unrealistic valuations. Nick Gibson, director at Games Investor Consulting, notes that the combination of tough comparisons with the lockdown years, hardware supply issues, and changes to App Tracking Transparency have given investors reason to pause. Despite these challenges, Laurie believes that it is still a great time for investors to invest in the games industry, as acquirers are less active and valuations are more realistic. Patrick O'Donnell, senior equity analyst at Goodbody, agrees that the sector is facing challenges, including uncertainty around consumer spending and regulatory concerns. However, he also notes that the industry has a long-term growth plan and that investors should look beyond short-term concerns. Overall, the current investor sentiment in the video game industry is cautious, but there are still opportunities for growth and investment.