Video and online games drew substantial investor interest in 2008, as the volume of equity raises in the sector outpaced that of social networking, web apps, mobile and blogging/user-gen sectors.
Peachtree Media Advisors said Monday that last year there were 59 equity raises in the games sector. That volume was followed by social networking (57), web apps/enabling/IT (47), mobile (35) and blogging/user-generated (27).
"Since there are capital raise transactions that do not report deal value throughout the year, capital raise volume is a good indicator of investor interest in certain sectors of online media," the report read.
Including equity raise and M&A deals, there were 88 videogame-related transactions in 2008. Only social networking topped that volume last year with 102 total transactions.
The total transaction value for videogames, including both equity raise and acquisitions, was $705 million.
Some notable M&A activity in gaming included the $70.1 million ($100K plus assumption of $70 in debt) acquisition of Midway Games by private investor Mark Thomas, Infogrames’ $27.6 million Cryptic Studios buy and Activision’s acquisition of Budcat Creations (no value reported).
There were also various capital raise transactions, including $11 million from Tencent Holdings to online game firm Outspark, Sequoia Capital’s $4.5 million injection into Challenge Online Games and Accel Partner’s $10 million investment in Mochi Media.
The overall consumer sector, which encompasses video and online games, social networking, blogging and consumer publishers captured $6.2 billion in mergers and acquisition transactions, or 37 percent of all reported transaction value in digital media, leading all other sectors.
More game-related investment
The consumer publishers and aggregator category captured the highest total reported transaction value in 2008 with $3.4 billion, topping the videogaming category. But the primary driver behind that category was the $1.8 billion CBS acquisition of GameSpot parent CNET.
Another notable consumer publisher transaction was Constellation Ventures’ $8.3 million investment in the gaming site Crispy Gamer.