Why is the UK Gaming Market Attracting Such a High Amount of Investment?

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The UK gaming industry is flourishing, and it’s attracting interest from major brands around the world. In 2021, there were 14 takeovers of British companies in the industry, and this generated more than £1.9 billion in revenue. This was a whopping increase on the previous year, where mergers and acquisitions “only” made up £1.2 billion in income.

It looks like these lucrative partnerships and purchases will continue in 2022, as companies try to set themselves up to benefit from the emergence of the Metaverse.

Huge Deals in 2021 Could Lead to More in 2022

2021 witnessed a few of the biggest acquisitions in gaming history, with ByteDance’s purchase of Moonton topping the pile at $4 billion (£2.94 billion). Other major deals included Electronic Arts’ swallowing up of Glu Mobile and Playdemic for $2.4 billion (£1.76 billion) and $1.4 billion (£1.03 billion) respectively, and Tencent’s acquisition of Sumo Group for $1.27 billion (£935 million).

The latter two deals were cases of foreign companies swooping in for UK brands, something that looks set to continue this year. There were also a few smaller agreements for UK names, with USA-based Devolver Digital picking up Firefly Studios and Nerial for a combined total of more than $45 million (£33 million).

There have already been a couple of record-breaking acquisitions in the gaming industry in 2022 as the behemoths at the top of the tree aim to consolidate their power. Microsoft purchased Activision Blizzard for $68.7 billion (£50.6 billion) and Take-Two Interactive gobbled up Zynga for $12.7 billion (£9.5 billion).

The biggest giants in the business are targeting major players in sectors that are expected to thrive within the Metaverse when it comes to fruition. It’s anticipated that iGaming will play a huge part, which is why there has recently been a £3 billion bidding war for Playtech, one of the biggest names in the sector.

Playtech’s influence on iGaming is highlighted by the fact that its games feature on some of the best online casino sites. These pages rely on their attractive offers to bring players in, but they also know that the availability of games like Age of the Gods or Green Lantern from Playtech is a major draw.

Getting Prepared for the Metaverse

With Mark Zuckerberg’s recent announcement of the Metaverse, it’s a scramble for game companies to get into pole position to flourish within it. The UK is one of the world’s hotspots for up-and-coming game companies that are known to innovate, and this is why international brands want to swallow them up.

The virtual reality world that the Meta CEO has introduced is not expected to be ubiquitous until 2030, so there will be a lot of deals over the decade in the lead-up to this. Something that makes UK companies so attractive to major corporations is the fact that they are being encouraged to innovate thanks to government grants. The top dogs in Parliament have pledged £50 million of investment for creative industries to drive economic growth in the years ahead.

UK ministers have identified the gaming industry as one of the key areas for economic progression and know that savvy companies will need to get inventive to survive in the emerging VR market. £8 million of this fund will go directly to start-up developers in the country, giving these people a springboard to gain recognition in a notoriously cutthroat industry. This will come in the form of increased support and the nurturing of talented individuals.

The UK has a prospering and sustainable gaming industry from a grassroots level to big businesses at the top. It’s no wonder that international companies are seeking to invest and acquire some of the biggest names emerging from the country. This looks set to continue in 2022 and beyond, as gaming conglomerates gear up for the Metaverse.