At GDC (the Video games Developer Convention) this March in San Francisco, there was a bit of an elephant within the room. All the same old cocktail events, dinners and occasions have been going down as regular, however a number of the discussions weren’t about gaming. Excluding Savvy Video games, proprietor of Scopely, shopping for Pokemon Go from Niantic, there have been comparatively few and smaller offers. A16Z Speedrun, the Ycombinator for gaming, introduced it is going to increase past gaming to cowl a a lot wider slice of leisure, shopper tech and AI automation. However gaming is much from lifeless. It’s nonetheless the #1 type of leisure for anybody 12 and above. So what offers?
On this publish, I attempted to collate the most recent reviews on the gaming business from Sensor Tower, Konvoy Ventures and Aream&Co. In the event you’re a founder or VC investor within the gaming area, there’s some useful takeaways on the finish.
Market Snapshot: The Evolving Gaming Panorama
The worldwide gaming market is projected to achieve $186 billion by 2026 (4.7% annual development) with roughly 3.4 billion avid gamers worldwide.
Personal investments in gaming startups hit a 5 12 months low in Q1 2025 with $400M in recorded investments. Rounds are nonetheless occurring, however buyers are being extremely selective.
VC funding is rebounding with $373M raised throughout 77 offers in Q1’25 (+35% QoQ), with whole personal financings reaching ~$700M (+23% vs. This fall’24). Development-stage rounds surged 125% for Collection B–D, whereas North America led with $198M in whole funding. Strategic M&A is choosing up with notable offers together with Scopely’s acquisition of Niantic and MTG buying Plarium.
On the M&A entrance, the quarter’s development was principally attributed to the Pokemon Go deal, however is basically pushed by cell gaming studios.
The amount of medium and enormous offers—these with upfront funds over $100 million—has now exceeded pre-pandemic ranges.
The expansion charges of the business have slowed down from the occasions of the pandemic, however nonetheless gaming is anticipated to proceed to develop and attain $221 billion in income per 12 months by 2030.
AI + Gaming is attracting funding
In line with a new report by Investgame, AI + Gaming startups attracted $1.8 billion in funding throughout 2020-2024 interval.
In the present day, AI is being utilised to generate expansive sport worlds, improve non-player character (NPC) behaviours, and supply real-time analytics for personalised participant experiences.
Whereas most firms stay on the ‘software layer’, just a few startups like Playo.ai (full disclosure: we’re buyers with Remagine Ventures) developed a proprietary gameplay AI basis mannequin that generates limitless, personalised 3D gaming experiences in below a minute. This has the potential to dramatically change the price construction of the business.
Platform Dynamics & Distribution Revolution
The cell gaming market is returning to development, with in-app buy income growing by 4% YoY to $82 billion, time spent by 7.9%, and periods by 12% YoY in 2024 in comparison with 2023. A major development is the rising adoption of Hybridcasual monetization, which blends in-app purchases and advert monetization, alongside an elevated focus by builders on stay companies for present titles to spice up retention and engagement in a privacy-aware setting.
When it comes to genres, Informal video games confirmed the most important absolute IAP income achieve within the West regardless of obtain declines, whereas Technique and RPGs led world shopper spending, and Shooters and Technique dominated world time spent.
Whereas total downloads have plateaued, development is being fuelled by increased spending per payer, and new sport launches proceed to drive substantial recognition and income, significantly inside the Motion & Technique class.
Maybe probably the most vital growth is the erosion of Apple’s App Retailer monopoly. With regulatory strain lastly forcing open the iOS ecosystem, third-party app shops and direct fee choices are actually actuality. This shift is already decreasing the efficient “Apple tax” from 30% to 15-20% for a lot of builders, probably unlocking billions in extra developer income. Studios with direct-to-consumer relationships stand to learn most from this structural change.
Regional Development Hotspots
Regionally, North America skilled probably the most absolute development in IAP income, though Asia noticed a decline.
Regardless of Asia-Pacific internet hosting 53% of gamers, the U.S. and China generate over 50% of business income whereas representing solely 27% of avid gamers. American gamers spend roughly 3.1× extra per capita than their Chinese language counterparts – a spending disparity mirrored in enterprise funding, the place U.S. gaming startups have raised roughly 7.6× greater than Chinese language ones.
Probably the most compelling story for buyers is the acceleration in beforehand underserved markets:
| Area | Cell IAP (2024) | YoY Development |
|---|---|---|
| North America | $28B | +9% |
| Europe | $12B | +14% |
| Latin America | $1.5B | +13% |
| Center East | $1.2B | +18% |
| Asia | $38B | -3% |
Playbook for Gaming Founders
It’s a bit powerful on the market for gaming fundraising (on the content material facet). That is what founders can do to navigate this era:
- Embrace Direct Monetisation: With app retailer monopolies breaking down, put money into direct fee infrastructure and buyer relationships. The businesses who transfer shortly to capitalize on new distribution choices will seize outsized worth.
- Hybrid Income Fashions: Combine IAP with promoting for superior outcomes. Check rewarded video adverts alongside premium choices quite than committing to a single income stream.
- Retention Over Acquisition: With downloads declining, concentrate on extending participant lifetime by means of strong live-service operations.
- Geographic Growth: Goal high-growth areas (Brazil, Turkey, MENA) whereas optimising premium choices for high-LTV gamers in mature markets.
- Distribution Innovation: TikTok noticed 67% enhance in sport advert impressions, whereas Applovin jumped 397%. Grasp platform-specific content material dynamics earlier than rivals.
Comply with the cash: The place VCs Are Inserting Bets
- Various Distribution & Fee Infrastructure: Firms enabling builders to bypass conventional app shops or optimise inside the new multi-store ecosystem are positioned for vital development.
- Reside-Service Infrastructure: Instruments that assist studios handle, monetize, and prolong sport lifetime because the business shifts from acquisition to retention.
- Rising Market Studios: Groups constructing for high-growth areas with cultural relevance and platform data.
- AI-Enhanced Growth: Instruments accelerating content material creation, QA processes, and personalization that ship measurable ROI.
- Strategic Acquisition Targets: Properly-positioned studios with confirmed know-how or IP changing into enticing M&A targets at affordable valuations.
What we’re searching for at Remagine Ventures
Gaming in 2025 exhibits stability alongside vital structural change. The app retailer monopoly breakdown represents maybe the largest alternative for worth creation in a decade. For founders, the message is evident: capitalise on new distribution choices, concentrate on retention, experiment with hybrid monetisation, and suppose globally from day one.
At Remagine Ventures, we stay bullish on gaming’s trajectory and are actively in search of companions who perceive the place the puck is heading. In the event you’re constructing one thing that aligns with our thesis, we’d love to listen to from you.
I am a former basic associate at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google’s first bodily hub for startups.
I am additionally the founding father of Techbikers, a non-profit bringing collectively the startup ecosystem on biking challenges in help of Room to Learn. Since inception in 2012 we have constructed 11 colleges and 50 libraries within the creating world.
