The game industry is known for moving great amounts of money in deals all over the world every year. This industry is dynamic and constantly evolving since video games are something that needs to offer innovations, is constantly updating and upgrading, and has many competitors in the market.
Thanks to the numerous competitors and entrepreneurs out there, the video game industry, just as any other industry is able to hold great transactions and .-like any other business- has to deal with a crisis, bankruptcy, possible mergers and some acquisitions.
Just last year, Digi-Capital (an adviser in the field of technology mergers and acquisitions), estimated that the video game industry made deals for over 30 billion dollars. Also, more than 90% of these deals based on mergers and acquisitions.
Even though numbers may be shocking, we are facing times when businesses move fast, and everyone is trying to serve a significant share of the market. To prove that, the same tech adviser pointed out that 2016 was the year when most money was invested in mergers and acquisitions in the video game field. The last record was held by the year 2014 when mergers and acquisitions represented only 77% of the total business transactions.
But, how is this all filed actually working? Who is buying whom and how much money is being invested in each deal?
In this article, we will share some relevant information regarding the financial transactions in the gaming field.
Who is staying and who is leaving the game?
Regardless the numerous impasses the global economy is facing, the game industry seems to keep on growing every year. The reason to this is that some big gaming companies have been able to stay on top of the game (such as Electronic Arts – EA games, or Activision Blizzard- ATVI). Plus, every year new companies appear, small to medium size ones are also growing and those which work only with online games are becoming more profitable every year.
By now, we are seeing who is going to remain part of this industry and who is going to disappear or be absorbed by a bigger player. Predictions are in a way obvious.
Online gaming companies are going to keep on popping up and growing. Some of them will be acquired by bigger bidders and some other will merge in order to keep their priorities intact and fight for their interests.
Besides, there is a new kid in town that has been helping this industry grow are the mobile gaming companies. These guys are multiplying fast and are stepping on each other’s toes to stay on top of the game. This leads to mobile users having numerous options that could overwhelm them. However, this is an area of the gaming industry that also moves fast. As a result, many of this little companies are also merging and buying each other’s stocks and rights. Ultimately, consolidations are becoming quite common here.
To sum it up, digital and mobile gaming companies are predicted to keep on growing with stable numbers in the years to come. On the other hand, those businesses which are keeping things simple and traditional, are most likely doomed to disappear.
Which countries are keeping the bigger share?
This is a one million dollar question because we would think that video game companies in the United States are keeping the bigger share. In the end, there are many active users there, and some of the most important video game companies were created there.
Nevertheless (and this can be shocking to many), the countries that are presenting an exponential growth in the gaming industry are mainly Russia and China.
Russia has become a leader in the mobile gaming area, producing incredibly high revenues during the past years. On its side, China counts with more than 110 million people playing mobile games. As these numbers keep on growing so does the digital gaming industry in Asia.
What happens to game consoles?
This is also an important question here since gaming consoles seem to become obsolete in the presence of digital gaming. Almost ten years ago, we could only conceive the idea of playing a high-quality game by buying an expensive artifact and keeping it in our homes.
However, this paradigm has changed rapidly in the past 10 years and gamers don’t need to go out and run to the game store to buy the new console or the trendy game. Nowadays, digital and mobile gaming has taken the biggest share of the industry, offering updates, interactivity and innovative features without players needing to get out of their couch.
As a consequence, some of our favorite and well-known gaming companies are facing high chances of going bankrupt. This may be the case of Nintendo and Sony, who every year struggle with new strategies to remain part of the game.
Related: Is It Possible To Avoid Business Bankruptcy? by Suzzanne Uhland
* Featured Image courtesy of JESHOOTS.com at Pexels.com