Asian companies have "significant appetite" for Western acquisitions
M&A and IPO activity set to continue in mobile, online, social markets
The trend for successful Asian games companies to invest and acquire in Western businesses is set to continue, according to the latest report from investment bank Digi-Capital.
The first half of the year has seen significant moves from companies such as Perfect World with its $50 million acquisition of Cryptic and Tencent's $400 million buy out of Riot Games. According to the report, investment and acquisitions in massively multiplayer, social and mobile markets has increased in scale this year - a trend set to continue for the rest of 2011.
"We remain very bullish on online and mobile games growth and investment - now is a fantastic time," commented Tim Merel, managing director of Digi-Capital.
We're privy to a groundswell of games IPO activity poised to come to market in the next 12-18 months
Tim Merel, Digi-Capital
"We are seeing significant appetite from Chinese, Japanese and South Korean games companies to acquire and invest in strong Western online and mobile games companies, but as our Chinese operating partner often reminds us, building the right relationships remains critical."
The report also highlights success in Europe, including Bigpoint's recent $350 million investment and social company Wooga securing $24 million.
"Market innovation continues across the piece (particularly in social-mobile games), with US, European and Asian companies developing great businesses built on great games," commented Merel.
Investors should expect more stock market floatations in the coming year, according to Merel, but the traditional console market will remain flat in comparison to the now booming online and mobile markets.
"We're privy to a groundswell of games IPO activity poised to come to market in the next 12-18 months. As people have come to expect, we remain long term bears on the pure console market, despite recent and anticipated hardware launches," noted Merel.
The updated Global Video Games Investment Review 2011 can be seen in viewed here.