Gaming Gains

Welcome to KPMG Strategy’s gaming insight mini-series, providing insight on the gaming industry in Ireland and beyond. Each article will focus on different aspects of the gaming ecosystem, offering new perspectives for investors and executives alike. In part one, we examine the drivers behind the current wave of investment in the gaming industry.

Gaming is an industry traditionally overlooked by investors in Ireland, yet there are indicators that the tides are now changing. Irish gaming company Keywords Studios made headlines in October 2024 when they announced they accepted an acquisition bid of $2.8bn from a consortium of investors led by EQT.

Albeit at the larger end, this is one of many such deals in the Irish gaming space and follows a larger trend emerging in the wider international investment landscape. As of Q3 2024, the buyout value of PE gaming increased 63.46% YoY, from $5.2 billion in 2023 to $8.5 billion in 2024 (see Pitchbook graph here).

This increasing activity both globally and in Ireland begs the question: Why gaming, and why now?

Christopher Brown

Partner, Head of Strategy

KPMG in Ireland

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Table of recent global gaming investment, illustrative

*Target*	*Investor*	*Estimated deal size*
Pokémon Go	Scopely	$3.5bn
Keywords Studios (Irish)	EQT; CPP Investments; Temase	$2.8bn
Epic Games	Disney	$1.5bn
Easybrain	Miniclip	$1.2bn
Jagex	CVC Capital Partners; Haveli Investments	$1.1bn
Gearbox	Take-Two Interactive	$460m
Hutch Games	MTG	$375m

High growth potential and diverse revenue streams

Gaming companies are attractive to investors for a multitude of reasons, the most compelling being the strong ROI potential that can be achieved under private ownership. Gaming companies typically have low overheads, high margins and obtain exit valuations like those yielded by SaaS companies.

Like software businesses, gaming is also scalable at low cost, and developers can capitalise their product expenditure on the balance sheet as an asset. Games have data and insights in-built as well, which can be leveraged both for R&D and in the form of advertising. And while its ease of deployment means gaming has a global reach, it is also relatively resistant to economic cycles.

There is also the potential for Games to generate recurring revenue in the form of microtransactions. The term ‘gaming as a service’, or ‘GaaS’ has been used to describe providing game content on a continuing revenue model and the opportunity is large. In 2025, the global online microtransaction market size is valued at $522.50bn and is predicted to reach around $691.30bn by 2029, expanding at a CAGR of 7.25%.

The gaming product mix has also adapted over time and spans well beyond the title release. In-game transactions, limited edition content, subscriptions (including season passes), skins (which allow players to customise the appearance of characters or items), brand collaborations, live services, advertising, and downloadable content (DLCs) all deliver recurring revenue.

Gamers have demonstrated they are willing to pay for new and innovative gaming experiences, and as the younger generation of gamers has grown, older gamers have stronger purchasing power.

Consolidation opportunities

The gaming industry is ripe for consolidation. Investors see opportunities to merge smaller companies in a fragmented industry to create larger competitive entities.

Furthermore, as PE backed gaming corporations have held fast in the face of current financing headwinds, larger publicly traded ones have struggled and are expected to offload some of their underperforming titles, creating opportunities to acquire at depressed valuations.

We expect 2025 to be a strong year for large cap and mid-market gaming deals as investors seek out bolt-ons as part of a buy and build strategy.

The indie gaming scene has been applauded for its cutting-edge innovation and ability to tell compelling stories through gameplay. Typically bootstrapped, these companies have proven that larger investment in game development does not necessarily equal greater returns. Investors recognise that there are opportunities to acquire developers at a lower valuation and receive great return on investment.

The Irish market - in particular - has many such opportunities:

Table of several Irish Indie gaming companies (non-exhaustive)

*Company*	*Business overview*
W4 Games	Founded by veterans of the Godot Engine, an open-source game development platform. Their mission is to strengthen the Godot ecosystem by providing commercial products and services, such as W4 Build, W4 Cloud, and W4 Consoles. These services help developers create and distribute games more efficiently.
Outlier Games	Independent video game development studio based in Dublin, Ireland, and Belfast, Northern Ireland. They focus on innovative strategy and multiplayer titles, including "This Means Warp," a cooperative spaceship management game.
Jamango	Browser-native gaming platform that allows users to create and play user-generated games instantly. It combines building mechanics similar to Minecraft with the social aspects of Roblox.
Vela Games	Founded in 2017 by an ex-Riot Games employee, developer of Evercore Heroes, an online multiplayer competitive PvE (Player vs Environment) game.

In summary

In short, there are clear signals that gaming deal activity is likely to increase in Ireland over the coming years and overall, the industry feels buoyant and optimistic.

If, like us, you work or are interested in the Irish gaming space, reach out to our team of commercial and operational due diligence and EBITDA growth specialists.