The Gaming Industry`s IPOs Remain Flat, with Only One Deal YTD

After reaching a peak in 2021, the gaming sector’s IPO activity has significantly cooled down, and the negative trend has stretched throughout 2024. If the first few months are any indication, 2024 could become the worst year for gaming IPOs this market has seen in a long time.

According to data presented by Stocklytics.com, the gaming industry’s IPOs remained flat in 2024, with only one deal year-to-date.

YTD IPO Deal Value Drops to Only $7 Million

Over the past ten years, almost 120 gaming companies have gone public, with the total value of IPOs exceeding $173 billion. More than half of those deals were made at the market peak in 2021, but a lot has changed since then. After billions of dollars poured into buying gaming stocks, the dealmaking of all kinds in the videogame sector pulled back sharply, and IPOs are no exception.

Economic instability, dropping company valuations, a chilly stock market, and rising interest rates have made investors more cautious. This has caused a huge IPO slowdown in 2022 and 2023, which unfortunately continued this year. The DDM Game Investment Review survey shows just how big that drop was.

For instance, in 2020, the gaming industry saw 13 IPOs worth around $20.6 billion. A year later, gaming IPOs exploded, resulting in 35 deals worth almost $110 billion. However, 2022 brought a steep drop, with only 12 gaming companies going public in deals worth $1.5 billion. Although last year saw the same number of IPOs, their total value more than halved to $619 million. But that`s nothing compared to a rough start in 2024.

Only one IPO in the gaming sector worth $7 million took place in the first three months of the year, while other companies withdrew their planned initial public offerings due to market conditions.

While some think this negative trend will change by the end of the year, with companies like Discord, Niantic, Moon Active, and Smilegate standing in line to IPO, it is most unlikely that 2024 will bring the levels of IPO activity seen three years ago.

Gaming Stocks are Leveling Up

Although the number of initial public offerings in the gaming sector remains low, with companies postponing their exits due to economic conditions and dropping valuations, the gaming stocks are leveling up in 2024.

Statistics show that five out of the six largest gaming companies by market cap have seen their stock prices increase year-over-year, bringing solid returns to investors.

Nintendo is the best among them. The Japanese gaming giant saw an impressive 32.5% stock return in the past year, helping it to add more than $15 billion to its stock value. Sea (Garena) and Take-Two Interactive stocks also brought double-digit returns to their investors, 21% and 22.5% year-over-year, respectively. Neat Ease and Electronic Arts were far from these figures, bringing 11.2% and 9.2% gains since last May. On the other hand, Roblox is the only gaming stock on this list, marked in red, with a negative one-year stock return of minus 13%.