Although the COVID-19 pandemic brought scores of new gamers into the ecosystem, amid stay-at-home orders and an outlet for escapism, tailwinds to mainstream adoption and international growth were well underway.
Today, gaming is perceived as a social activity, esports trophies are handmade by luxury jewelers, and top-performing games can generate billions of dollars in opening-week sales.
VC funding is evenly distributed between early- and late-stage capital and game content has proven to be the impetus for most late-stage funding.
Emergent technologies, such as Web3 infrastructure and generative AI, by extension, account for most early-stage deals. Capital also continues to flow into startups helping content and intellectual property owners monetize gamers.
The creator economy and the value of user-generated content continue to expand, and other categories, like generative AI and low-code tools, have the potential to accelerate game development—a notoriously costly endeavor. The Metaverse, Web3, virtual reality & augmented reality, and cloud gaming all represent largely untapped potential for the industry.
Gaming startups, though, are not immune to global and macroeconomic headwinds. Supply chain issues have interrupted console development and title releases, antitrust scrutiny is increasing, and the breakneck pace of game development has brought heightened awareness to challenging working conditions.
While demand has proven to be highly resilient over the last decade-and-a-half, which included a global financial crisis and a pandemic, a looming recession risk has the potential to weigh down consumption.
Our first-ever gaming report examines trends in VC investment flow, highlights emerging opportunities, and discusses prominent risks for investors to consider.
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Q4 2022 Gaming Report. PitchBook clients can read the premium report
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