Aream & Co., in partnership with InvestGame, has released its report on the state of the gaming investment market in the first quarter of 2025. The data highlights a mixed performance across M&A activity, public market transactions, and private investments, reflecting a cautious but evolving investment environment within the gaming industry.

Aream & Co. Q1'25 Gaming Investment Report: Market Trends

Overall Market Overview

The first quarter of 2025 saw 42 mergers and acquisitions (M&A) transactions in the gaming sector, totaling $6.6 billion. This figure includes high-profile deals such as the divestiture of AppLovin's gaming division and acquisitions made by Niantic. Public companies accounted for 12 of these deals, contributing $5.1 billion to the overall volume.

A key example from this group is the transaction between Tencent and Ubisoft. In contrast, private investment activity declined notably. With only 81 private deals recorded and a total volume of $0.4 billion, the quarter marked the lowest investment levels seen since early 2020, making it the weakest quarter in the last five years in terms of private funding.

Gaming M&A Deals During Q1 2025 Made Over $6 Billion

Mergers and Acquisitions Activity

The M&A market showed early signs of recovery, driven largely by increased deal volume and renewed interest in mobile studios. Transactions with upfront payments exceeding $100 million surpassed pre-pandemic levels, suggesting a return of larger-scale acquisitions. Private equity funds have also increased their presence in the gaming space, taking part in several notable deals over the past year. This suggests a strategic interest in gaming assets, particularly among studios with a mobile focus or strong intellectual property portfolios.

Most Major M&A Deals Over The Past Year Were Focused On Mobile Studios

Public Market Transactions

Public gaming companies remained active in Q1'25, with 12 recorded transactions across different deal types. The most prominent among them included Asmodee’s public spin-off and the previously mentioned Tencent-Ubisoft deal. The number of deals conducted by public companies in the past six months reached the highest level seen in the past three years.

Public gaming company indexes outperformed broader market indexes such as the S&P 500 and NASDAQ. Both global and Chinese gaming companies demonstrated similar upward trends, although the impact of U.S. trade tariffs is expected to affect future performance. Nintendo has already responded to these uncertainties by suspending pre-orders for the Nintendo Switch 2, while Chinese companies remain cautious about operating within the United States.

YTD Indices Performance

Diversified companies like Take-Two, EA, Sony, and NetEase experienced the most significant growth since December 2022. PC and console-focused developers also showed modest positive movement, while mobile developers in Asia and Europe continued to lose value.

Valuation multiples reflect this dynamic. Diversified companies held the highest forward-looking EBITDA multiples at 13.8x, whereas western mobile developers registered the lowest at 4.7x. Despite rising valuations in some segments, many companies reported weaker revenue performance in 2024 compared to the previous year. This indicates that market sentiment may be driven more by long-term growth expectations and profitability potential rather than immediate financial results.

Change in Index Stock Price

Private Investment Landscape

Private investments in Q1'25 declined to their lowest levels in five years, both in deal count and overall value. Early-stage investments were particularly impacted, with metrics falling to their weakest since early 2020. Most of the quarter’s largest funding rounds were limited to seed stages, reflecting investor caution and a preference for lower-risk, early-phase opportunities.

Over the past year, Bitkraft, a16z Games, and GEM Capital have been among the most active early-stage investors. In terms of total investment over the last 12 months, Bitkraft, a16z Games, and Tirta were leading contributors. Despite the broader market downturn, the industry still witnessed the launch of four new venture capital funds between 2024 and 2025, and several existing funds secured additional financing, suggesting continued underlying interest in gaming as a long-term investment category.

The Largest Rounds In Q1’25 Mainly Consisted Of Seed Rounds

Industry Trends and Market Dynamics

Mobile gaming has shown signs of stabilization following a period of decline. However, the number of game downloads remains at a multi-year low. Revenue growth has been led by publishers in Asia, who continue to adapt to shifting market conditions.

On the PC side, platforms such as Steam continue to perform steadily. In Q1'25, Steam reached a new high of 41.2 million concurrent users, reflecting sustained user engagement. Meanwhile, active user numbers on PlayStation Network and Nintendo platforms are increasing. No data has been released regarding Xbox’s user metrics, though sales figures suggest that any audience growth is unlikely to be driven by hardware sales.

Steam Shows Steady Growth In Q1’25 Reaching 41.2 Million Concurrent Users

User-generated content (UGC) and games as platforms continue to show strong engagement, with Roblox and Fortnite remaining central to this trend. However, streaming metrics have changed notably. While more games are featured on streams, viewership has declined steadily from pandemic-era highs. The mobile segment continues to experience a slowdown in new releases. In 2024, the number of new mobile titles reached a seven-year low, with early 2025 data indicating little change.

In contrast, the PC market continues to become more competitive, with a growing number of new titles released on Steam annually. Revenue for both PC and mobile games increasingly comes from older titles. This trend has strengthened over the past five years, particularly in the mobile space, where established games and well-known franchises continue to dominate player spending.

PC and Console vs Mobile Revenue Concentration  

Conclusion

The Q1'25 report from Aream & Co. and InvestGame presents a cautious but informative view of the current state of gaming investment. While the M&A and public markets are showing gradual signs of recovery, private investment remains subdued. Broader market trends, such as the stability of mobile gaming, the rise of UGC, and continued engagement on established platforms, offer insight into the ongoing evolution of the industry. The report underlines the challenges of early-stage investing in this climate while also highlighting long-term areas of strategic growth within the gaming sector, including web3 initiatives, platform-based ecosystems, and diversified game publishing models.

Source: Aream & Co