Tag Archive for Take-Two Interactive

Global Games Investment to Double vs. 2010

In its 2011 Global Games Investment Review, Digi-Capital stated, “Even though Q3 2011 has just finished, global games investment so far this year is pushing towards double that of 2010, and global games M&A more than double the level of 2010.”  There have been blockbuster transactions like the $750MM EA acquisition of PopCap, but there have been many other investments, mergers and acquisitions across sectors with increasing deal sizes. With most of the Q3 investment activity focused on the two fastest growing segments, social and mobile, overall, investments were directed into:

-       Social,

-       Mobile,

-       Social-mobile,

-       Browser based MMO and

-       Cloud gaming.

Geographically, there has been significant activity from APAC, especially China, Japan and South Korea, as well as from the US. In general, companies have been generally less forthcoming on the prices of their M&A targets this year, which may indicate that not just the headline game deals continue to have strong valuations.

By 2014, Digi-Capital projects global game sales to hit $87B with mobile and social games accounting for $44B.  Almost half of the revenue for online/mobile games is projected to come from China by that time. Although China has a low ARPU (average revenue per user), the high number of users and relative efficiency of Chinese game companies enable them to achieve operating margins of up to 50% — fuel for their growth and overseas acquisitions.

Select Company Valuations

Company Valuation (as of Oct. 4, 2011 – USD)
Activision $10.2B
Nintendo $7.5B
DeNA (Japan) $5.7B
Gree (Japan) $6.9B
Electronic Arts $4.8B
GameStop $3.3B
Take-Two Interactive $1B