Houlihan Lokey – Video Games Market Update, Spring 2024

The video game industry returned to growth in 2023, driven by factors such as console supply, new releases, and subscription services. Valuations have moderated, presenting opportunities for investors. The industry is expected to continue evolving, with a projected four billion players by 2026. M&A activity has picked up, with significant acquisitions and new market entrants. Financial sponsors are also expected to invest in the video game space. There is optimism for the industry's long-term outlook despite near-term challenges, with a focus on providing engaging content and innovative business models. Strong demand on both the sellside and buyside is expected to drive greater investment and M&A activity in 2024. Houlihan Lokey is optimistic about the industry's potential for growth and investment opportunities, particularly in the Indie game market.