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Mergers and Acquisitions in the European Gaming Industry: Recent Development and Future Prospects

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The gaming industry has always been a captivating and dynamic sphere, presenting new titles, innovations, and technologies each year. This constant evolution keeps gamers, developers, and investors alert and engaged. However, the past year has been an especially eventful time for gaming studio consolidations. It is safe to assert that we have witnessed a whirlwind of consolidation unlike any other in the past.

The two largest deals in gaming history were disclosed in January 2022. Microsoft made a stunning announcement of its plan to procure Activision Blizzard for a whopping $68.7 billion. Concurrently, Take-Two Interactive declared its intent to acquire Zynga for $12.7 billion. These acquisitions have irrefutably proven to be game-changing moves in the gambling sector. 

The acquisition of Activision Blizzard by Microsoft is a significant manoeuvre that will result in a gaming powerhouse. Activision Blizzard has created some of the industry’s most outstanding game titles, such as Call of Duty, World of Warcraft, and Candy Crush Saga. In contrast, Microsoft is the proprietor of Xbox. Together, the two companies can combine their strengths to generate an unparalleled gaming ecosystem.

Moreover, Microsoft will acquire access to Activision Blizzard’s vast array of games, which will undoubtedly fortify its already impressive Game Pass subscription service.

Merger and Acquisition Activities 

Here are a few staggering merger and acquisition activities,

  • Embracer Group acquired Gearbox Entertainment, the developer of Borderlands, for a staggering $1.37 billion. Additionally, it also procured Aspyr, a porting specialist, for $450 million, and Easybrain, a mobile developer, for $765 million.
  • The European Commission has given its approval to Microsoft’s acquisition of ZeniMax Media, the parent company of well-known game studios such as Doom and Fallout’s Bethesda Softworks. This acquisition has taken Microsoft’s number of 1st party game studios to a whopping 23, cementing its position in the industry.
  • EA’s acquisition offer of $1.2 billion for Codemasters has been approved by its shareholders, signalling the deal’s finalization.
  • EA has also purchased Glu Mobile, a mobile game developer, for a considerable enterprise value of $2.1 billion, expanding its mobile gaming portfolio.

Primary Factors Driving the European Gaming Studio Consolidation

Despite the pandemic-fuelled boom in the gaming industry, game development remains a precarious undertaking. User preferences can be unpredictable, development costs have skyrocketed, competition is cutthroat, and creative ideas that seem promising at the outset may become commonplace by the game’s completion.

Even the most successful independent game developers or new online casino websites can face challenges while navigating the industry’s difficult terrain. Two such examples are Gearbox Entertainment Co. and Insomniac Games, which were previously stable but have since been sold in the past two years. Such developments underscore the need for strategic adaptability in a constantly evolving market.

Now, let’s take at the reasons behind this trend. 

  • Investment Companies and Banks Spending Money

The present investment landscape are marked by a surge of funds from banks and investment firms, which has created an overheated investment environment. As we look ahead to 2023, there seems to be no indication that this trend will abate anytime soon.

  • Bigger Gaming Companies Making Bigger Impacts

In its Q2 2021 earnings report, Microsoft revealed a 51% YoY surge in gaming revenue. The pandemic has caused a spike in consumer spending on video games, resulting in higher revenues for several major gaming companies such as Tencent, Sony, Nintendo EA, L&L Europe Ltd Casinos and Activision Blizzard. This trend is projected to persist as people continue to spend more time at home and explore new sources of entertainment.

  • Studio Acquisitions Secure Content

Acquiring studios is an effective approach to obtaining content for subscription services. The ownership of original content has consistently proven to be a wise and enduring business strategy, and both Microsoft and EA have wholeheartedly embraced this notion. By acquiring studios, they can secure a steady flow of exclusive content for their respective platforms, ensuring long-term success.

Effects of Merger and Acquisitions

Like every other thing, the effects of everything are multiple and complex. Let’s take a look at a few. 

  • Bigger Gaming Studios Have Resources and Money for Accelerating Growth

When a smaller studio is acquired by a larger one, it often leads to more rapid and frequent game updates than the smaller studio could have achieved independently. It is due to the greater resources and support provided by the acquiring company, including access to a larger team of developers, better technology, and more substantial funding. As a result, the acquired studio can focus on creating high-quality content while benefiting from the infrastructure and expertise of its parent company.

  • Going Corporate Can Imply Less Creative Freedom

The process of consolidation seems to be mutually beneficial. Acquired companies can ensure their sustainability, while larger studios acquire additional content to satisfy an eager fan base. However, there are also drawbacks to this approach. A market controlled by a small number of dominant companies may lead to limited options, creative stagnation, and increased subscription fees in the long run. It is essential to strike a balance between consolidation and competition to maintain a healthy and thriving gaming industry.

At a creative level, the uniqueness of smaller studios can be quickly eradicated when they are acquired by a larger industry conglomerate. It is precisely this originality that often serves as the most compelling selling point for their devoted fan base. When smaller studios are assimilated into a larger corporate structure, their creative identity may become diluted, and they may lose the qualities that made them exceptional in the first place. As a result, companies must strike a balance between the advantages of consolidation and the importance of preserving the distinctive qualities that made the acquired studio successful.

  • Independent Gaming Organizations Are Grappling to Stay Afloat

In the not-so-distant past, the gaming industry featured a substantial number of independent studios that could produce successful titles with fewer resources and greater creative freedom. However, when these studios encountered financial challenges and budgetary constraints, a wave of acquisitions led by large corporations became inevitable. The industry’s increasing emphasis on blockbuster titles and high-budget projects has made it increasingly challenging for smaller studios to compete. As a result, only a few powerful players are now dominating the gaming industry.

Author

Bart Crebolder

Bart is the lead content manager for Online Casino Groups.Thanks to his background as a journalist in the iGaming industry is he always first with news about online casinos. Bart is working for almost 10 years in the iGaming industry so you can take his fair casino reviews for granted!

Bitcoin

Bitcoin Miner celebrates two years of hugely successful collaboration with ZBD

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Bitcoin Miner, the world’s number one Bitcoin game, is celebrating two years of its collaboration with ZBD, a leading fintech company powering digital economies for gamers and developers. Since the partnership began, Bitcoin Miner has gone from a forgotten title with no players to becoming one of the largest play-and-earn games ever, with over 2 million lifetime users.

ZBD’s Lightning-powered payments technology enables developers to inject instant rewards into their games to boost retention and community engagement. Fumb Games, the studio behind Bitcoin Miner, partnered with ZBD in March 2022 to help revive its flagship title, enabling it to reward players with fragments of Bitcoin for playing the game as normal. From the outset, the integration of ZBD’s tech had a marked impact, leading to a 12x boost in 30-day retention. Two years on, Bitcoin Miner is achieving 40,000 daily active users, making it the biggest Bitcoin game by user count.

Besides the retention benefit of rewards, which leads to player retention that exceeds 6 months, the success of Bitcoin Miner has also been fueled by community-based features such as regular live events. The majority of Bitcoin Miner players are US-based millennial males who enjoy engaging with gaming communities, with weekly events leading to a 20% increase in revenue. As well as its own community of engaged players, Bitcoin Miner benefits from the ZBD app user base of more than a million gamers.

Paul West, Founder of Fumb Games, said “Bitcoin Miner has proven that US players love games that are fun, snackable and rewarding. The  game is not only sustainable, but has soared to new heights since the partnership with ZBD. It’s no surprise that I’m very excited for the future of bitcoin and player-friendly rewarded games.”

Ben Cousens, Chief Strategy Officer at ZBD, said “The two-year collaboration with Paul and Fumb Games on Bitcoin Miner has been a quintessential success story for what we’re building at ZBD. It proves the value in offering rewards for gamers and the success of ZBD’s rewards and payments tech at making it possible at speed and scale. We will no doubt see further impressive numbers for Bitcoin Miner that cement its status as world’s number one Bitcoin game, and we also look forward to extending the potential benefits of Bitcoin rewards to more developers.”

In November 2023, Fumb Games also integrated ZBD’s technology in its idle tycoon RPG SpaceY. ZBD works with more than 100 game developers worldwide, including major brands such as Square Enix, and is also used by innovative adtech companies like Slice and AdInMo.

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Gaming

UK Gaming Charity SpecialEffect to Receive Special Award at 20th BAFTA Games Awards

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BAFTA has announced that UK gaming charity SpecialEffect, will receive the prestigious Special Award at the 20th BAFTA Games Awards. The award, which recognises outstanding contributions to games, film and television, is one of the highest accolades bestowed by BAFTA. Dr Mick Donegan MBE, founder and CEO of SpecialEffect, will pick up the Special Award at the annual BAFTA Games Awards ceremony on Thursday 11 April.

In 2007, Mick Donegan founded SpecialEffect to help people with even the most severe physical challenges to access video games. The organisation uses specialised technology to enhance access to video games and creative self-expression for people with a wide range of Disabilities.

SpecialEffect’s success began as a result of the collaboration between Mick, a specialist in assistive technology and his son Bill, a keen gamer with a background in product design. Since its creation, the charity has grown to thirty employees, raising all their own funds, and has provided specialist one-to-one assessments and support to severely disabled people throughout the UK and beyond.

Dr Mick Donegan MBE, SpecialEffect founder and CEO, said: “With a background in special education, I realised how much people with severe physical disabilities were missing out by not being able to play. I started SpecialEffect not only to help individuals to play video games but also to collaborate with the games industry to make their games more accessible ‘at source’. Since then, we have been privileged to be invited to share our ideas with more and more developers all over the world. Now, 17 years since SpecialEffect began, it’s an absolute honour for SpecialEffect’s work to be recognised by BAFTA.”

Emma Baehr, BAFTA executive director of awards and content, said: “SpecialEffect’s work is essential to the games world and is hugely deserving of a BAFTA Special Award. Their innovative and supportive approach to making games accessible drives progress within the industry, collaborating with developers and studios on new technologies to make games within reach to more people. We look forward to honouring their contribution to games at the ceremony on Thursday 11 April.”

Throughout the years, SpecialEffect has been involved in collaborating with Xbox, Sony and Logitech, to help design accessible controllers and a switch kit, enabling thousands more severely disabled players to access their games using a wide range of control devices. They have also worked with games studios and developers to help make their games more accessible. The organisation also developed EyeMine, a freely downloadable gaze-controlled interface to enable players to enjoy Minecraft through gaze-control alone.

Later this year will see the rollout of their EyeGaze Games (currently available on PC only) onto Android and iOS, games designed to be fully accessible for people with physical disabilities, whether they use gaze control, joysticks, switches or gamepads.

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Gaming

The Rocket League Championship Series Major 2 Heads Back to Copper Box Arena in London This June

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The Rocket League Championship Series (RLCS) returns to Copper Box Arena in London, UK for the second Major of 2024 from June 20-23.

Copper Box Arena hosted a sold out RLCS Spring Major in 2022 and saw Team Vitality defeat Team BDS in the final. The venue will again play host to the world’s best Rocket League players as they compete for the second trophy of 2024, a chance to win the lion’s share of a $255,000 in total prize pool winnings and earn additional RLCS points to secure a spot in the Rocket League World Championship in September.

The RLCS Major 2 will be broadcast on Twitch and YouTube from June 20-21, and welcome a live audience in the Copper Box Arena for the weekend competition on June 22-23. Tickets go on general sale beginning at 10:00 AM GMT on Friday, March 29, and the direct link to purchase tickets can be found on the Rocket League esports social accounts. There are three presale windows for O2 Priority customers, Live Nation users and Ticketmaster users.

BLAST and Rocket League esports have teamed up with Live Nation, one of the world’s largest live entertainment companies to help support and promote the RLCS Major 2 coming to London in June 2024.

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