According to Konvoy, state-owned gaming companies have $45 billion in cash reserves

During “Paris Games Week” on October 31, 2017, gamers play the video game “Star Wars Battlefront II”.


Publicly traded gaming companies are sitting on a $45 billion pile of cash and cash equivalents – and that could lead to greater consolidation in the $188 billion video game market, says a new report from venture capital firm Konvoy, exclusively was shared with CNBC.

People like Activision Blizzard, Electronic ArtsSingapore seaJapan Nintendo And Bandai NamcoSouth Korea Nexonand China NetEaseThe company currently has $45.1 billion in cash and cash equivalents, according to Konvoy, which cited these companies’ most recent public reports.

State-owned gaming companies currently have $45.1 billion in cash and cash equivalents, according to a report by venture capital firm Konvoy.


That would give them more than enough financial clout to explore potential acquisition targets that could help them expand their intellectual property and products.

In particular, gaming companies are looking to keep players engaged longer with live service games that add more content over time, as well as paid subscription packages that offer a certain number of free games and access to cloud gaming or the ability to play games to play over, offer the cloud instead of downloading it to their machines.

Publicly traded gaming companies had a pretty rosy year overall in 2023.

The VanEck Video Gaming and eSports ETFAccording to Konvoy, which tracks the MVIS Global Video Gaming & eSports Index, it is up 20% year to date. The blue chip S&P 500 In contrast, the index is up almost 12% year-to-date.

The performance of public gaming ETFs since the beginning of 2023.


The Global X Video Games & Esports ETFwhich aims to track a modified market capitalization-weighted global index of video gaming and esports companies, has not performed well, down 0.4% since the start of 2023.

Big Tech has its eye on video games

According to Konvoy, large technology companies also have enough money to consider further gaming deals.

The VC firm said this is among the world’s largest technology companies Amazon, MicrosoftGoogle, Apple, Meta, NetflixChina’s Tencentand Japan Sonyhave a total of $229.4 billion in cash on their balance sheets to deploy on potential deals.

Collapse of the VC deal

According to Konvoy’s report, venture capital investment in video game companies plunged 64% year-over-year in the third quarter of 2023.

Total venture funding in the video game industry fell 9% sequentially to $454 million in the third quarter of 2023.


This is a sign that the industry’s boom times in 2020 and 2021 have waned, despite the boost to the industry from Microsoft’s groundbreaking deal.

Gaming startups raised a total of $454 million globally in the three months ended September, down 9% from the previous quarter and down more than 64% from the same three-month period last year.

Watch CNBC's full interview with Activision Blizzard CEO Bobby Kotick

Still, Konvoy’s Chapman expects things will look brighter for gaming VCs and startups next year as the dire conditions for venture capital investment begin to improve – although funding for gaming companies has become a “sustainable new Normality has returned, which will continue at the current pace for the next few years.

“As the global venture market recovers, we expect gambling, which was somewhat spared from the initial impact of the economic downturn, to follow suit,” Chapman told CNBC. “We expect gaming VC funding to see a slight increase over the next few quarters as the industry grows at a similar rate to pre-pandemic.”

“Currently, VC deal volume and funding is comparable to pre-pandemic levels, and while we may not see the exponential growth of 2021, we are pleased to see a robust venture funding market in the gaming space for continued value creation in the Industry.” “

Harder times

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