Game acquisitions will "more than double" this year

Online and mobile companies urged to invest or make strategic exits

Mergers, acquisitions and investments in the video game business in 2011 are on track to double those of 2010, according to investment bank Digi-Capital.

Although only tracking the first nine months of the year sofar, the latest update to the Global Games Investment Review suggests again that the majority of activity will come from China, Japan, and South Korea as well as the US.

"As we expected at the start of the year, games investment and M&A have accelerated again," commented Tim Merel, managing director of Digi-Capital.

"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 EA/PopCap, but there have been many other investments, mergers and acquisitions across sectors with increasing deal sizes.

"In terms of where the action is, social, mobile, social-mobile, browser based MMO and cloud gaming are leading the charge." He added: "Companies have been generally less forthcoming on how much they are paying for M&A targets this year, which may indicate that not just the headline games deals continue to have strong valuations. While the macro-environment remains challenging, the fundamental growth in online/mobile games continues to drive games investment and M&A forward."

The increase in investment and M&A continues a trend, with fundraising in 2010 53 per cent higher than 2009 levels and M&A activity 60 per cent higher.

Merel suggested that now is the time for mobile and online companies to either invest or sell in a booming market.

"We still believe that now is a great time for the strongest independent online/mobile games companies to either invest for growth, or take advantage of the market to look for strategic exits."

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