Gaming Saw Over 90% Increase in VC Funding in Q1
Gaming Saw Over 90% Increase in VC Funding in Q1
Konvoy's Q1 2024 report reveals a nearly two-year high in gaming investments. Discover the latest trends, major deals, market shifts, and relevance to web3 gaming.
Eliza Crichton-Stuart author picture}
Eliza Crichton-Stuart
Head of Operations
Konvoy Gaming Industry Report Q1 2024 - title page
In the first quarter of 2024, the gaming industry witnessed a remarkable resurgence in investment activity, with private investments soaring to a near two-year high of $2.197 billion, according to the latest data from Konvoy. This impressive growth was largely driven by a blockbuster $1.5 billion deal between Epic Games and Disney.
Venture capital investments also hit a one-year high, totaling $594 million, marking a 94% increase from the previous quarter. This surge in financial activity, alongside notable deals and emerging trends, highlights the dynamic and evolving landscape of the global gaming industry.
In this article, we will break down Konvoy's Q1 2024 report, covering the latest trends, major deals, market shifts, and relevance to web3 gaming. We will also provide a detailed comparison between Konvoy's and Drake Star Partners' Q1 reports - looking at which blockchain gaming companies raised funding in Q1 of 2024.
Konvoy Gaming Industry Report Q1 2024 - title page
Market Overview
In the first quarter of 2024, private investments in gaming companies surged to a nearly two-year peak, totaling $2.197 billion. A significant portion of this sum, $1.5 billion, stemmed from a notable deal between Epic Games and Disney.
Konvoy Gaming Industry Report Q1 2024 - overview
Venture capital (VC) investments hit a one-year pinnacle, amounting to $594 million, marking a notable 94% surge from the preceding quarter in deal volume. A total of 124 deals were sealed, reflecting a substantial 28% uptick compared to the previous quarter, representing the highest count in the past year since Q1’23.
Gaming See Over 90% Increase in VC Funding in Q1
In the first quarter of 2024, 80% of the overall financing volume was attributed to just 23% of the deals, surpassing the figures from 2022 (19%), 2021 (12%), and 2020 (13%). This trend suggests a more robust investment market scenario.
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Regarding capital distribution at early stages, from pre-seed to Series A, there's even more positive news: 80% of allocated funds were dispersed among 31% of companies. This achievement marks the most favorable performance since 2020.
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Josh Chapman, managing partner at Konvoy, commented: “The investment climate around gaming has now turned a corner. We believe the worst of this correction cycle is behind us and 2024 and 2025 will showcase a healthy VC investment pace, a few selective M&A events, notable IPOs next year, and continued secular growth for the industry."
Public Markets + M&A
During the first quarter of 2024, the ESPO (MVIS Global Video Gaming & eSports index) experienced a growth of 12.8%, while the S&P 500 exhibited a slightly lower increase of 10.8% over the same period.
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Public gaming companies boast $35.3 billion in cash reserves, not including the substantial $267.2 billion held by technology giants with gaming divisions such as Tencent, Sony, and Microsoft.
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The number of mergers and acquisitions (M&A) deals in Q1’24 stayed consistent with the previous quarter, with 40 transactions recorded. Interestingly, Drake Star Partners' latest report revealed that there were 47 M&A transactions totaling $2.4 billion in disclosed funding during Q1 2024. While this transaction volume falls below 2022’s peak, it represents a 15% increase from the average deals closed per quarter in 2023.
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Largest VC Deals
According to Drake Star Partners' latest Q1 2024 report, blockchain gaming companies notably accounted for 40% of the quarter’s private placements, reflecting an upswing possibly mirroring the recent rally of cryptocurrency markets. Some notable mentions include (but are not limited to):
Studio 369's blockchain game Metalcore, XPLA, Xterio's web3 IP Overworld ($10 Million), BlockGames, Helika's web3 analytics platform ($8 Million), Delabs, Elixir, Mythic Protocol, Pudgy Penguins, Immutable's NFT game Illuvium ($12 Million), Vermilion Studio's new crypto game Forgotten Playlands ($7 Million), Metacene's web3 MMORPG ($10 Million) and more.
Blockchain Gaming Makes Up 40% Of The Q1 Private Placements
Please see the two sub-sections below for a more detailed comparison between Konvoy's and Drake Star Partners' Q1 reports - looking at which blockchain gaming companies raised funding in Q1 of 2024.
