At Pocket Gamer Connects London this week, a panel of well-known video games business buyers gathered to debate “Investment and M&A Trends for 2026”. GamesIndustry.biz was there, and the normal message of the discuss was to anticipate a barely rosier outlook for merger and acquisition (M&A) exercise in the present months, although the total image stays considerably risk-averse, with funding nonetheless arduous to seek out.
The panel was made up of Alina Soltys (companion and founder, Quantum Tech Companions), Bibbi Wikman (founder, PlayCap), Sikander Chahal (principal, Transcend Fund), Phil Mansell (co-founder, The Video games Angels), and Shum Singh (MD and founder, Agnitio Capital), and beneath is a abstract of the key takeaways.
M&A is coming back in 2026
Alina Soltys advised that the enormous, $55 billion EA deal from final 12 months might kickstart extra M&A exercise in the video games business. “M&A analysts consider huge mega offers trickle all the way down to everyone else,” she mentioned. “That actually occurs, and it creates confidence in the business, and it will get headlines. And hastily you see different individuals wanting into the business, interested by investing into gaming. In order that EA deal, for instance, is optimistic from that perspective.”
A current report from investment financial institution Aream & Co confirmed that there was simply $500 million in video video games M&A exercise in the closing quarter of 2025, an 89% drop year-on-year. However Soltys mentioned that at the starting of 2026 we’re seeing “larger exercise of transactions beginning,” and famous that M&An information tends to be backwards-looking, reflecting what was occurring months beforehand. “If you concentrate on the time it takes to shut a deal, it is many months, typically a 12 months.”
Total, going into 2026, she sees three trends. “Primary, there have been numerous actually nice studios that haven’t simply survived, however under-the-radar thrived, and it is simply uncomfortable to speak about in some circumstances throughout the broader business panorama.
“Quantity two, numerous capital has been retained in these purchaser teams, and they’re now wanting for extra progress.
“And quantity three, the valuation hole has closed. Put up-COVID there was numerous curiosity in misery offers, and at the firms that had been doing effectively, the founders had no cause to promote. And in order that created a giant hole in simply lack of deal stream. That is now in a traditional vary – not loopy like COVID, however in an awesome place. And in order that units us up in a spot the place this 12 months seems to be very promising, throughout a number of various classes and sizes.”
Past content funding
Phil Mansell, who was the CEO of Jagex till March final 12 months, mentioned we’re in a interval of “adjustment”, and buyers are reluctant to fund content. “I believe it is in all probability the case that content-based investments with fairness are nonetheless not notably engaging, aside from in the most distinctive circumstances,” he mentioned. “Lots of people are wanting for the investment, however not that many individuals are receiving it on the content entrance.
“However a few of the adjustment that appears to be occurring is a better number of funding sorts, whether or not it is UA [user acquisition] financing, challenge financing, final mile financing, founders and advisors getting higher at discovering non-dilutive or authorities help via issues, issue financing for VGEC… I believe persons are turning into a bit extra conscious of a wider set of how of getting funding. I believe particularly on the indie video games aspect, that’s going to be more and more vital, as a result of actually in comparison with the COVID highs, there’s much less and much less conventional fairness investing for content companies.”
“In comparison with the COVID highs, there’s much less and much less conventional fairness investing for content companies”
Bibbi Wikman agreed that there is presently little in the method of content funding from fairness buyers, and that firms must search out different sources. “And I believe in a method it is good,” she mentioned, “as a result of I really feel prefer it’s been a practice that you just’re at all times going to get the VC into the firm, freely giving just a little bit an excessive amount of of your organization, and not likely understanding that it additionally takes away numerous your individual management over your product, your launch plan, all the pieces. So I believe It is a very risk-averse business proper now, and it is in all probability going to remain that method. So I’d begin my pitching after I can really present that I’ve an viewers ready for it.”. Preserve the core of what you wish to construct, I believe that is vital.”
Sikander Chahal mentioned that Transcend Fund continues to be doing content offers, however the bar to getting a deal is now a lot larger. “Three, 4 years in the past,” he mentioned, “for those who had been from a named workforce and you had some grand huge imaginative and prescient, you possibly can in all probability get some funding. Now, you actually need to indicate that you just’re demonstrating some type of traction. If you’re attempting to get funding, whether or not it is from a VC or elsewhere, having the ability to present that there are methods you could mitigate a few of that threat by exhibiting some form of exterior validation, that helps rather a lot. The bar has principally gone up.”
Korea is flying
Shum Singh, who chaired the panel, pointed in the direction of the Korean writer NCSoft’s current acquisition of Vietnam-based informal video games maker Lihuhu, which led to a dialogue of investments by Korean game corporations.
Soltys mentioned that numerous the investment and M&A exercise in the previous two years has been from Korean teams that appear to have a long-term imaginative and prescient. “They proceed to take a position via a interval the place lots of people pulled back, pausing and reassessing methods,” she mentioned. It is notable that the Korean writer Krafton mentioned this month that it had 26 video games in the pipeline.
Singh agreed that Korean corporations have been very energetic. “Definitely we see the identical factor, and we’re in discussions with them,” he mentioned, including that the corporations are likely to strategy issues cautiously, beginning with smaller publishing offers. “And if it goes rather well, then perhaps that results in a possible acquisition or extra strategic relationship down the street.”
It is a completely different story with Korea’s shut neighbour, nonetheless. “The Japanese have been noticeably absent,” Singh mentioned.
The COVID content hole
Soltys mentioned that for the previous couple of years, everybody has identified there will likely be a “content hole” – a results of the collapse of funding after COVID-era highs that means fewer new video games coming via. “And we’re right here,” she mentioned. “There’s tons of conversations round: ‘What can we launch at the finish of this 12 months, as a result of we simply do not have something? What can we do in the subsequent 15 months?’
“The timeline is now not 3-4 years for a high quality game, they need one thing in 12-18 months”
“And so the timeline is now not three, 4 years for a high quality game. They wish to have one thing inside the subsequent 12 to 18 months. In order that stuff is selecting up, these conversations are energetic, and individuals do and will spend cash on that. That may are available the type of publishing, it’d are available the type of acquisitions. I believe realistically, we must also take into consideration what is smart for strategics to purchase versus publish. These are two completely different sides of the coin. And so there is perhaps much less acquisitions per se, however extra publishing.”
Buying for back catalogue
Mansell mentioned that in the mid-market, and in Europe specifically, present acquisitions are extra focused. “It is perhaps buying IP – not full groups, not full studios – or buying for back catalogue.”
Soltys added that non-public fairness corporations on the lookout for video games firms “do not view themselves as inventive house owners essentially” – as a substitute, they’re wanting for a recurring income base. “That is why it is good to have that catalogue, as a result of not less than there’s one thing there for them to analyse and run DCFs on.” (DCF stands for discounted money stream, a way utilized by personal fairness for figuring out an organization’s worth.)
“You probably have older video games, determine methods to keep up them, it helps with income and future transactions.”
“However it’s not at all times in your inventive workforce’s mindset to maintain these older titles up and working,” Soltys continued. “And so a phrase of recommendation, simply for everyone in the room, for those who do have these kinds of video games, determine methods to keep up them. Not solely is it good for your income base, but in addition down the street, if there’s curiosity in some form of a transaction, it helps. There’s at all times clearly curiosity in new IP, however preserve that outdated stuff, too.”
Traders are wanting for innovation
When Singh requested the panel requested what new developments they had been excited by, Wikman mentioned she was focused on “discovering good methods of distribution, consumer acquisition, firms which can be constructing communities… How will you break via all the noise?”
“And I’d add, any new method you could deploy AI know-how,” mentioned Chahal, “whether or not it is in your organisation execution, like managing a workforce, or whether or not it is in the product itself. Clearly there’s numerous debate and sensitivity round how you employ AI in your video games, however I believe from an investment perspective, you actually need to show that you just’re on high of these things. And if there is a good cause why you are not utilizing it, then that is effective.”
He gave stay ops for example of a superb space by which to utilise AI. “There’s numerous upside potential there.”
Participant relationships are key
“I believe as game builders, being near your participant is absolutely vital, particularly at a time like this,” mentioned Soltys. She highlighted direct-to-consumer fee techniques as a great way of having the ability to work together with gamers and to focus advertising, in addition to enabling independence. “Being in that management seat helps, and it additionally offers you visibility to what’s working, the place to take a position additional, what new merchandise to work on.”
“It is a very risk-averse business proper now, and it is in all probability going to remain that method.”
Wikman added that it is now extra vital than ever to pay attention to your viewers. “Even for those who’re in a pre-seed stage, you must present that you’ve traction for no matter you are constructing. It is a very risk-averse business proper now, and it is in all probability going to remain that method. So I’d begin my pitching after I can really present that I’ve an viewers ready for it.”
The GTA 6 uplift
We should still be residing via a risk-averse interval by way of investment, however Chahal noticed grounds for optimism, saying that “issues are directionally wanting a lot better than it was final 12 months.”
He famous that the post-COVID spike in rates of interest was a giant cause why investment slowed. “If that begins to development down, you are going to begin to see much more individuals investing,” he mentioned. However most of all, he was optimistic about video video games being raised larger in the normal consciousness. “One thing like GTA 6 making headlines makes individuals speak about video games. And at the finish of the day, we’re all people, and easy psychology comes into it. So extra individuals speaking about video games, that is going to be an awesome factor for the business typically.”