Private equity investment in video games falls as investors shift focus

Global private equity and venture capital deal volume in video games fell for a fourth consecutive year in 2025, driven by a shift in investor focus toward AI and weaker consumer demand.

The number of private equity M&A and rounds of funding in video games totaled 208 in 2025, down 45% year over year, according to S&P Global Market Intelligence data. The number of deals in the sector has been falling since 2021, when it reached 778.

The number of overall transactions in the sector, including private capital deals, were also down last year to 313 from 630 in 2024 and the recent peak of 1,200 in 2022.

"The largest venture rounds in the world are all going to mega-sized AI rounds," said Brian Slough, a counsel focused on M&A and private capital markets at law firm Morgan Lewis & Bockius LLP. "With all that capital being focused on AI, there is just less in the pot to go to other places, video game industry included."

Private equity investment value surged to $55.92 billion in 2025, skewed by the $55.19 billion acquisition of video game developer Electronic Arts Inc., known for its blockbuster sports franchises such as FIFA (now EA Sports FC). The company is being acquired by an investor consortium including Silver Lake Technology Management LLC, A Fin Management LLC and Saudi Arabia's sovereign wealth fund, Public Investment Fund.

EA's acquisition was the second-largest video game deal on record, according to a report from S&P Global Market Intelligence Kagan. Investment bankers noted that more mature gaming companies like EA can offer steady revenue growth, profitability and predictability — qualities that private equity firms cherish.

Excluding the EA deal, private equity investment value in the sector totaled $842 million in 2025, lower than the yearly totals in at least five years.

The analysis covers companies that develop or publish video games as well as companies that provide services related to video game development and support.

– Download a spreadsheet with data in this story. – Read about the decline in video game industry head count. – Explore more private equity coverage.

Venture capital investment in the sector waned as consumers spent less time and money on video games after the pandemic, said Michael Metzger, managing partner focused on fintech and digital media for investment banking firm Drake Star Partners Ltd.

Revenues of video game content companies stagnated after reaching a peak in 2021 as consumers gravitated back to pre-pandemic spending, according to a report from Kagan.

Private equity has also become more selective and discerning on deals, exploring investment opportunities that prioritize capital efficiency.

"The [video game company] models weren't necessarily sustainable as they had previously existed. It's hard to sustain a model where every title has a budget of $300 million plus to develop," Slough said.

"There seems to be a major shift across verticals looking for fundamentals and efficiency."

Largest transactions

Six of the 10 largest video game transactions in 2025 were in Turkey.

In the largest transaction after the EA deal, developer Good Job Games Bilisim Yazilim ve Pazarlama AS secured $60 million in a series A round in July 2025. Menlo Ventures Management LP, Deer Management Co. LLC and Anthos Management LP participated in the round.

Five months earlier, Good Job Games had also received $23 million in a seed round from Menlo Ventures and Arcadia Gaming Advisors LLP.

The third-largest transaction was Bonfire Studios Inc.'s $56 million series B round in January. Andreessen Horowitz LLC led the round, while Altos Ventures Management Inc. and The Founders Fund LLC participated.

The US and Canada recorded the bulk of private equity investment in 2025, at $55.44 billion, driven by EA deal. However, total investment value in the region stood at $254.8 million in 2025 when excluding the outsized deal.

Europe came second with $322 million, led by the six Turkish rounds of funding, while Asia-Pacific had $101.9 million.