Nirmal Narayanan

RIYADH: The global video gaming industry, valued at $380 billion, is poised for a wave of mergers and acquisitions in the coming years, fueled by investors and multinational tech companies eyeing growth opportunities, industry experts revealed. 

Addressing a panel discussion at the Next World Forum in Riyadh on Aug. 30, the experts highlighted that the video gaming industry is currently experiencing a golden era, with people of all ages engaging in gaming. 

Kyu Lee, president of South Korean game developer Com2us, said: “Lots of different types of acquisitions are going to happen. Microsoft-Activision is a great example, but there will be much more. If you look at it from an international point of view, there could be much more. I think this is just the beginning.”  

During the panel discussion, Jean Hilgers, founder of BITKRAFT Ventures, an esports investment platform, noted that several multinational tech giants who never thought about the gaming industry are now slowly entering the sector.  

“The buyer space is as large as it was ever before. The pool of buyers has expanded significantly, as major public companies like Netflix and Facebook on the tech side have suddenly become acquirers of gaming companies,” said Hilgers.  

According to research analyst Global Data, the gaming industry had witnessed at least 68 mergers and acquisitions in 2022, the most noted being Microsoft acquiring Activision Blizzard for a staggering $68.7 billion.  

Another noted deal last year was the acquisition of American social video game developer Zynga, known for games like Farmville, by Take-Two Interactive for $12.7 billion.  

However, Hilgers cautioned that “cultural alignment” could be a critical challenge for gaming companies being acquired by larger firms. 

“I think the aspect that might be neglected sometimes is cultural alignment with the acquirer. Cultural alignment is ever more important in the games industry as we manage creativity,” said Hilgers.  

He emphasized the importance of aligning cultures, particularly in a creative industry like gaming. 

According to Hilgers, once it attains a significant spot in the market, a gaming company has multiple ways to grow.  

As gaming companies mature and achieve significant market positions, they face the choice of joining major corporations for further growth or considering an initial public offering, Hilgers explained. 

David Higley, managing director of Lizard, highlighted the rising popularity of esports among children, indicating the sector’s strong future growth. 

“It is like a golden era for content creators. There is more capital, there is more attention and bigger audiences than we have ever seen,” said Higley.  

Discussing the future trajectory of the gaming industry, Hilger noted that video games are the primary choice of entertainment for people worldwide.  

“Video games are the greatest form of entertainment on this planet. And I have little reason to believe that my perception will be changing. We have an industry right now which is as open and democratic,” added Hilger.  

Omar Batterjee, program director of the Next World Forum, highlighted the massive expansion of the global video gaming industry in his opening remarks. He emphasized how gaming has not only grown immensely in recent years but has also permeated various aspects of human life. 

“We are speaking about a phenomenon (gaming) that has transcended its boundaries, a universe that is no longer confined to our screens but has imprinted its influence on multiple facets of our world,” said Batterjee.  

He further conveyed the forum’s purpose, calling it “our collective voice, unified commitment, and the echoing heartbeat of the surging gaming and esports movement.”  

Batterjee encouraged participants to gather not only to play but also to dream, innovate, and collaborate.