Video game firms have seen an ‘explosion’ of investment – broker

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The Video Game industry received US$60bn of corporate deals in gaming and e-sports in the first half of 2021, according to stockbroker Arden Partners (AIM:ARDN).


It marks a 55% increase in transactions, spread across funding and M&A deals, and coincides with higher levels of user playing time during and following the pandemic.


“The video game industry recorded an unprecedented level of transactions in the first half of this year and is set for a long-term investment explosion,” Arden said in a note.


Lockdowns and the ongoing pandemic have been a catalyst for the significant growth in the gaming market as revenues, user, and growth records were all obliterated.


The industry is set to record exponential growth over the long-term thanks to the rapid acceleration of the Metaverse and Virtual Reality that is peaking investor interest”, Arden added.


Virtual reality (VR) is the fastest-growing market segment, according to the broker, with the UK set to see revenues rise by 31.7% this year and the same level of growth is anticipated over the coming five years.


Arden added that the gaming industry is now worth US$170bn which is significantly more valuable than the music (US$20bn) and film sectors (US$43bn).


“The unprecedented growth recorded in 2020, accelerated by the pandemic, has put the sector on a really strong footing and its growth is only set to continue.


“By 2025, it is predicted the industry will generate more than US$260bn in revenue as more technological breakthroughs occur leading to further investment of capital,” said Alex DeGroote, Research Director at Arden.


“Our report highlights how significant technological developments in Cloud gaming, VR and the Metaverse are in laying the foundations for a new era of personalised gaming,” said Manjot Heer, Analyst at Arden Partners (AIM:ARDN).

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