Key Takeaways from Gamescom 2024
Michael Hill recently attended Gamescom 2024, the largest European trade and consumer fair for the digital entertainment industry with over 335k attendees to connect with clients and meeting exciting new businesses and exhibitors.
Update on M&A and financing activity
The gaming market underwent a significant market correction towards the end of 2023 and through the first half of 2024 with many studios doubling down on core franchises, rationalising costs and limiting external investment. As the market recovers there are signs of green shoots with selective M&A and financings and significant budgets allocated to M&A over the next couple of years. Tools and technology unlock new player segments, drive engagement and as such are attracting investment from prominent VCs in the space whereas PE remains cautious of original IP favouring pure-play services businesses.
Key takeaways from Gamescom 2024
1. Focus on core franchises
Investment outside of core franchises remains suppressed with major studios focusing on core franchise DLC, liveops and sequels. Exceptions to rule include Game Science’s new title Black Myth: Wukong which has already sold >10m units and is expected to be one of the biggest IPs of 2024.
2. Transmedia continues to drive value
There continues to be excellent examples of transmedia and intelligent licensing of IP across platforms, genres, and audience types. Established players such as Sega are making key hires to drive transmedia strategies, smaller studies such as Super Evil Megacorp leverage franchises such as Teenage Mutant Ninja Turtles and Rebel Moon and Gearbox’s Borderlands movie hit the theatres earlier in the summer.
3. Players benefit from A.I.
Beyond the more obvious art and sound services use cases, A.I. players can use codeless prompts to instantly create new environments and rules in a collaborative fully customisable environment. Examples include Helsinki-based Bitmagic which recently announced its raise with Korea Investment Partners and Zak Phelps, former senior director of product design on Fortnite.
4. In-browser opportunities
Indie developers are looking beyond the obvious distribution channels such as Steam and Epic and are looking to release either directly in browser or via browser-based platforms such as CrazyGames to connect with their audience, enable multiplayer experiences and access vital backend infrastructure.
5. VC and PE remain selective
VC funding activity at seed to series A stage remains buoyant but mid-to-late-stage financings have come down significantly from the highs of 2021. Building upon a trend from last year, VCs have been increasingly focused on technology, tools and infra as the demand for pure-play developers and publishers has cooled with the market.
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