M&A in the Games Industry 2020

Agnitio Capital’s year in review

Agnitio Capital
9 min readDec 22, 2020

When sitting down to write a blog about the very successful twelve months the games industry has had, it would be a savage act of callousness to not first acknowledge what has been going on outside the industry. It is hard to talk about what a terrible year 2020 was without sounding glib. The all encompassing impact of COVID is impossible to account for. Attempting to here would only trivialize the terrible human cost felt by the countless millions affected by it.

The list of lesser miseries 2020 had to offer would have defined any other year. The Australian bushfires, the floods in Indonesia, the famine in Yemen, a catastrophic explosion in Beirut, the murder of George Floyd and the subsequent protests which rage to this day. Trump’s incessant political vandalism.

The best thing about 2020 is its imminent end. Here’s to 2021 being a safer, healthier, year for everyone.

This has been a big year for the games industry driven by rapid consolidation, continued diversification of platforms/business models and splashy next-gen debuts for Sony and Microsoft.

Check out those games, games, games…

I won’t summarise all of the amazing releases this year because 2020 truly belonged to one title. Fall Guys: Ultimate Knockout bounced, tumbled and merrily flumped onto the landscape mid-year. It may not have been match-fit from a server stability standpoint at launch, but it was certainly fully realised as gaming’s new go to example for what success looks like. For those of you working in publishing, get ready for a sea of pitches that begin with, “it’s like Fall Guys, but with…”. Honourable mentions go to The Last of Us II, Half Life Alyx, Flight Simulator and the deliriously fresh, Among Us.

Games M&A in 2020

If the games M&A market was characterised by anything in 2020, it was frenzied activity. There was a towering stack of deals executed this year, with the rules on valuation mechanics, earnout structures, business models, platforms and ticket sizes all being thrown into flux.

To help illustrate what has been going on in the games M&A space, I have created a very simple table of the biggest deals this year. This is by no means a comprehensive list – this is a selection of all of the largest deals of the year (i.e. anything in the nine figure range). Some of this data was pulled from this excellent report. Some of it was added from various press releases. In all cases, earnouts are included so your mileage may vary depending on when you are reading this.

Mamma mia – here we go again…

As you can see, this year was all about those Swedes. Of the transactions listed above, the overwhelming majority of them went to publicly traded Swedish companies. Throughout most of the year it was looking like 2020 was going to belong to Embracer Group, which had been particularly dominant (announcing thirteen deals in a single day in November, including A Thinking Ape, which Agnitio advised on – more on that later). Then, right as everyone was getting ready to swap pro-forma spreadsheets for port and mince pies, EG7 pulled an early December blast from out of nowhere, snaffling up $375 million worth of transactions, first with Piranha Games, then soon after with Daybreak Games.

Stillfront and MTG both had strong showings with the former throwing down $400 million for Storm8 in Q1, followed closely by a nearly $200 million deal for Candywriter (another Agnitio client) in Q2 and following with the nearly $150 million Nanobit deal. Then literally hours before the last working week of the year drew to a close, Stillfront dropped news of two more deals in the shape of the Berlin-based PC MMORPG developer, Sandbox Interactive, for $130 million upfront plus earnouts. Announced alongside this was the word game developer Super Free Games, for $150 million upfront plus earnouts. Quite the finish! MTG had a suspiciously quiet year until in mid-Dec it paid $275 million for Hutch with a further $100 million in earnouts (this fact proudly brought to you with a powerful restraint for tedious motoring metaphors).

If you strip out the ten figure deals from this list (Zenimax, Leyou and Peak), more than 50% of the total deal value on this list came from publicly traded Swedish companies. With Thunderful in the process of flexing its muscle and MTG likely to be much more aggressive given it’s relatively quiet year, 2021 could easily eclipse 2020’s performance with regard to Sweden’s dominance in the M&A space.

Taking Xbox Game Pass to the zeniMAX!

There were a couple of big deals this year, but Microsoft’s shock purchase of Zenimax Media for $7.5 billion was an earthquake amid the hype for net-gen. As much as Sony’s PS5 has undoubtedly created the most buzz around the next generation of consoles, the Zenimax deal bodes well for the long-term future of Microsoft’s Xbox business. Microsoft has assured fans that future entries in marquee franchises such as The Elder Scrolls and Fallout will remain multi-platform, but has also stated they will be ‘first or better’ on Xbox. It’s safe to assume that at the very least, this deal will ensure that Bethesda’s current and future output will end up on Xbox Game Pass, giving the service even more guts as a system seller.

The future of Playstation Now is as yet unclear and until it offers the same day one access to first-party and top tier titles that Xbox Game Pass does, it will continue to cede ground to its closest competitor. Still, the absence of any Sony led deals in the table above is probably more telling of the catch-up that Microsoft has to do. The strength of Sony’s existing first-party line-up is formidable going into the PS5 era, including the purchase of Insomniac Games late last year. Maybe Blueprint will join the family in 2021.

Everything else

Outside of the publicly traded club, scaled private companies had a bit of a party in 2020. Scopely entered the fray, first with FoxNext and then Genera Games (on which Agnitio Capital was the advisor). Both deals cement Scopely’s footing in growing genres and add considerable weight to its balance sheet.

With a further $340 million of funding closed towards the end of the year on a $3.3 billion valuation, there are bound to be more such acquisitions in 2021. Given the kind of late stage investors that participated in the last round, including CPP, Wellington and Blackrock, don’t be surprised if Scopely files its own S1 some time next year, following Huuuge! and Roblox into the public markets.

More West Coast noise came from AppLovin, who grabbed the once peerless Machine Zone for $500 million dollars. There was a time when that company could easily have commanded a much higher price so I’m curious to see how AppLovin manages the turnaround on such a pricey leap into the M&A scene.

Agnitio Capital’s break out year

If you haven’t already twigged, everything up to this point was just a distended pre-amble in order to justify some brazen self-promotion. I mean who really cares about Zenimax anyway, a company that sounds like it was named after a sleeping pill? I’ve gone too far, but if you are still reading this, it is too late to turn back. Agnitio Capital was proudly the sell-side advisor on the following deals.


When Agnitio Capital agreed to represent Candywriter, the company was just six people. Agnitio Capital spent more than two years advising founders Kevin and Nadir, during which time, Bitlife grew quickly while the team grew steadily. By the time Stillfront signed on the dotted line, the team was 13 strong. Agnitio also assisted the guys in finding an accountant that possessed significant games industry expertise to ensure they observed IFRS accounting standards. We also introduced them to a leading UA agency throughout that time, which completely took over all user acquisition efforts. In many ways, we functioned a bit more like an active VC or non-exec in the period prior to the sale process. Candywriter is a great example of a team that Agnitio decided to back early, seeing a long-term opportunity to help them achieve a life-changing exit.

Deca Games

Deca is another group that Agnitio worked with over the long term. Ken Go built a business that turns the almost toxic level of abundance in the product marketplace into a leverage point, taking on legacy titles that have often been neglected and rejuvenating them as going concerns. It’s clear that Deca will be a strategic multiplier on a number of Embracer’s portfolio companies as it continues to bring more exciting studios into the family. In fact that is exactly what happened with A Thinking Ape.

Genera Games

In a category like puzzle, where there is no shortage of entrants but few products that can truly match a Playrix or Tactile title for quality, Tuscany Villa was a singular opportunity. Agnitio Capital evaluated that game as the highest fidelity product in that category we had yet seen, vindicated by fast scaling metrics. The market agreed and following an agreement for Agnitio to represent Genera, the right buyer came along quickly giving Scopely its second coup of the year.

A Thinking Ape

All of Agnitio’s deals are special but for founder, MD and Canadian native Shum, closing the firm’s first Canadian deal was particularly memorable. A Thinking Ape grabbed Embracer’s attention, in no small part due to a record 2020 in terms of revenue and profitability. With a strong portfolio and bright prospects for future titles, it’s hard to imagine 2021 being any different.

And another thing…

Agnitio Capital participated in Hutch’s initial seed round of funding in February 2013 as part of the angel syndicate, right at the start of their journey when the company was valued in the single digit millions of dollars. Given the growth that has occurred since then, the total deal value they achieved ($275 million upfront with $100 million in earnouts) and the fact that they sold to our good friends over at MTG, Agnitio Capital is one very happy former shareholder. The team’s best days are definitely yet to come.

What we are bullish on…

I spend a huge amount of time talking to games developers every week. Over the last year, while managing the disruption of COVID and adjusting to new work-from-home set-ups, it seems to have put a lot of the developers in my network into a reflective mood. The M&A space is shifting in step with consumer appetites and the ways developers are moving to accommodate them.

One clear incoming trend is platform and business model diversification. There is no escaping the gravitational pull of mobile f2P in the M&A world, but it’s also true that it feels like we could be entereing into a new golden age of premium and subscription games on other platforms. The choice of channels (Xbox Game Pass, Switch eShop, Epic Game Store etc.) joining the established ranks of Steam, Xbox Live and PSN is changing the opportunity landscape for developers. Their titles need not simply burn bright and then fizzle out — they can live again and again across the landscape through successive ports.

I also think that 2021 will see the rise of Poland when it comes to active publicly traded companies in the M&A space. The headline is of course CD Projekt Red but the rise in Ten Square Games’s share price and the imminent arrival of Huuuge! games on the Polish Stock Exchange is sure to shake up the European market when it comes to competing for deals.

Lastly, before the yearly food and cheer binge commences, it’s clear that the consolidation wave that swept through 2020 is not going anywhere. With or without COVID as an extraneous variable, games are going to continue to be a high-growth, high-activity space throughout 2021 and very likely beyond.

We’ll see you back here for another yearly recap one year from now. In the meantime, expect to see more from Agnitio Capital, both here on Medium in the form of pithy market insight, and out there in the wild, in the form of transformational M&A deals.

We wish you all a wonderful festive season!



Agnitio Capital

We are a games focused investment bank established 17 years ago.