The volume of deals in the global games industry rose by 8% quarter-on-quarter to 117 in Q1 2025. Content and technology spearheaded the rise, with investors taking a deeper interest in AI. 19 deals were linked to AI technology, with entrepreneurs focusing on simplifying user acquisition/retention, and launching casual AI-driven titles. Metica , for example, raised $9m in January 2025 for its consumer engagement solution that uses AI to optimise player experiences and monetisation in real time; while Wolf Games raised $4m for its AI-powered daily murder mystery title Public Eye. As AI tools become more sophisticated, start-ups will continue to emerge in the space, with some being acquired for their expertise and others funded for their innovation.

Overall investment value more than tripled quarter-on-quarter to $9.6bn in Q1 2025. This was primarily attributable to Scopely’s acquisition of Niantic for $3.5bn (read more here). The deal will bring Niantic’s game development team, several titles (including Pokémon Go, Monster Hunter Now, and Pikmin Bloom) and two companion apps under the ownership of Scopely, part of the Saudi-owned Savvy Games Group. Niantic’s technology business, including its mapping technology and two augmented reality (AR) titles, will remain independent as Niantic Spatial. The acquisition fulfils Savvy’s need for a ‘genre-leading’ title, and Niantic’s need for dedicated gaming expertise and ongoing financial support.

Infinite Reality, a technology company focused on creating immersive experiences for brands, raised $3bn this quarter from a private investor. It also acquired two companies, Napster – a fully licensed independent music service – and Obsess – a virtual shopping platform. Both strengthen its presence as a leader in the Metaverse/extended reality space. Though general interest in the Metaverse has slowed down after the initial boom in 2022, brands continue to utilise the concept to engage audiences through immersive and interactive experiences.

Uncertain economic conditions following USA tariffs may deter investment in 2025 

While investment activity in early 2025 showed positive signs, the industry is expected to suffer from the unstable economic environment brought on by Trump’s tariffs on foreign goods imported to the US. Digital goods are exempt, and so games hardware and physical content are set to experience the greatest impact, as most gaming devices are either assembled or manufactured in China. More broadly, amid financial concerns, consumers may be less willing to spend on non-essential, luxury goods such as games, and this could slow market growth. The knock-on effect could make companies more risk-averse, creating an environment where early/growth-stage investments are less viable, and driving value and volume down throughout the year. However, as part of an accelerated shift to digital content in the games space, we may see a renewed interest in the cloud gaming sector, with major publishers looking to onboard technology and expertise, and startups harnessing the technology to give consumers a cost-effective alternative to physical devices.

Investment in Turkey’s mobile content rises quarter-on-quarter 

Central and Eastern Europe saw games investment volume rise by 67% in Q1 2025, and of the ten investments, seven were headquartered in Turkey. The country has become a hub for mobile game development, with all Q1 2025 the investments targeting the sector. Turkey has produced key casual and hyper-casual mobile games in recent years, such as Royal Match by Dream Games, which has grossed over $2bn in lifetime revenue since its 2021 launch (according to AppMagic). While the mobile space is experiencing slower growth, developers based in Turkey can expand profit margins thanks to low development costs. The country has a wealth of local investors and funds but has increasingly attracted global venture capitalists, such as Laton Ventures, that fund larger projects.