Offering high-margin business models and recurring revenue streams, gaming is fast becoming a focus for investors in Ireland, writes Christopher Brown
Gaming is an industry traditionally overlooked by investors in Ireland, but there are indications that the tide is turning.
Irish gaming company Keywords Studios made headlines in October 2024 when it accepted a $2.8 billion acquisition bid of from a consortium of investors.
Albeit at the larger end of the scale, this deal is one of many in the Irish gaming space and follows a wider trend emerging in the international investment landscape.
As of the third quarter of 2024, the buyout value of private equity (PE) gaming increased 63.46 percent year-on-year, from $5.2 billion in 2023 to $8.5 billion in 2024 (as you can see on this Pitchbook graph).
This trend, both globally and in Ireland, begs the question: Why gaming, and why now?
Growth potential and revenue streams
Gaming companies are attractive to investors for several reasons, the most compelling being the strong return on investment achievable under private ownership. Gaming companies typically have low overheads, high margins and obtain exit valuations such as those yielded by software-as-a-service companies.
Like software businesses, gaming is also scalable at low cost, and developers can capitalise product expenditure on the balance sheet as an asset.
Games have in-built data and insights, which can be leveraged for both research and development and advertising. While its ease of deployment gives gaming global reach, the sector is also relatively resistant to economic cycles.
Games also have the potential to generate recurring revenue in the form of microtransactions.
The term ‘gaming-as-a-service’ (GaaS) has been used to describe game content provided on a recurring revenue model, offering a potentially lucrative investment opportunity.
The global online microtransaction market size has been valued at $522.50 billion in 2025, and is predicted to reach about $691.30 billion by 2029.
The product mix in gaming has also adapted over time and extends well beyond the release of a new gaming title.
In-game transactions, limited edition content, subscriptions (including season passes), skins (which allow players to customise the appearance of characters or items), brand collaborations, live services, advertising and downloadable content (DLCs) can all deliver recurring revenue.
Gamers have demonstrated their willingness to pay for new and innovative gaming experiences, and while the younger generation of gamers continues to grow, older gamers also offer stronger purchasing power.
Consolidation opportunities
The gaming industry is ripe for consolidation. Investors see opportunities to merge smaller companies in a fragmented industry to create larger, more competitive entities.
Further, as PE-backed gaming corporations continue to hold fast in the face of current financial headwinds, their larger publicly traded counterparts are struggling and expected to offload some of their underperforming titles, creating acquisition opportunities at depressed valuations.
We expect 2025 to be a strong year for large-cap and mid-market gaming deals as investors seek out bolt-ons as part of buy-and-build strategies.
The independent gaming scene has been applauded for its use of cutting-edge innovation and ability to tell compelling stories through gameplay.
Typically bootstrapped, these companies have proven that larger investment in game development does not necessarily equal greater returns.
Investors recognise that there are opportunities to acquire developers at a lower valuation, securing a great return on investment.
In short, there are clear signals that gaming deals are likely are likely to rise in Ireland in the years ahead. Overall, the industry feels buoyant and optimistic.
Christopher Brown is Partner and Head of Strategy at KPMG
LOADING...