Video Game IB/VC/PE
Does anyone have any thoughts on this as to what firms have a group for video games? Is it just handled within the tech groups?
It's going to be a huge industry in the future, and I want to know more about it. Would also love to be pointed towards resources on both news/social media that talk about activity and trends in the space.
Yes, I'm a gamer working in finance, and I would love to do something like this for the long term.
See Raine/LionTree
Liontree SF specifically I believe does a lot in this space.
One of the directors at liontree also owns a gaming only VC fund, consequently I believe liontree does a good bit of deals in the space
One of the directors at liontree also owns a gaming only VC fund, consequently I believe liontree does a good bit of deals in the space
REGAL
;)
Nope the G in REGAL is specific to casinos and the likes, not video games. Most places who bank video game guys will bucket that coverage into TMT.
It was supposed to be a joke (hence the ;) ) but it was poorly executed. I'll take the L on this one.
I thought from your headline that there was a video game to be a IB/PE/VC/HF person like Madden NFL Football but for finance jobs lol :)
BMB is back babyyyy... Welcome
Lol thanks :)
Cheat codes all begin with ALT
LOL :)
Love love love the space, especially outside of the majors. There is a huge push to acquire smaller/independent devs, a lot of whom are doing really cool things.
It's often ignored but mobile gaming is the space to be. You'd be surprised how much dough these pay to win mobile games generate. Plus the audience is much much MUCH larger than console / PC.
Obviously from the economics angle of it mobile is the place to be, but to most people who considers themselves "gamers" that would be a pretty soul-sucking experience all things considered lmao. Terrible game after terrible game, all focused on extracting money from middle aged women and young kids with dubious ethics, etc.
That said @OP if you're looking to get into gaming IB/VC/PE you should be forewarned that you will be touching the mobile side of things a lot more, and probably not dealing all that much with what you'd consider good or interesting games.
Check this out
https://investgame.net/news/sell-side-advisors/
Thanks for this, some good information on here.
Bookmarking because I love the space as well. Heard that Lazard LA just added a Digital gaming MD, although it’s a primarily A&D focused office. Gaming is going to continue to skyrocket and really bleed into all of the different entertainment/tech industries. Dream career: Digital Gaming/ Media IB > Gaming GE/VC > B School maybe > Game developer Corp dev
Lol your dream career is lasting 2 years in IB and VC / GE and then forking it all up for business school for Corp. dev? Kinda a strange dream path. Why wouldn’t it be crushing it as a IB or senior PE pro or going straight to Corp. dev? There’s nothing sexy about just doing 2 years as a PE associate
Some corp dev jobs prefer a PE background.
Will say pre-IPO corp dev at companies that are either unicorn or unique tech is quite underrated (200-300K comp but super interesting work and the potential of a 7 figure payday if you get in early enough for equity).
Video game is quite a unique vertical from a banking/investing coverage perspective so I thought I could provide some additional colors. The broad video game vertical mainly includes a large number of game studios plus a few large platform players. For this post, I will just focus on gaming studios (PC/Console/Mobile) which is at the core of the vertical.
The industry itself has already made more money than movie and music combined but is still considered niche from mainstream investors and bankers (at least before the pandemic). The key fundamental shift is the massive and growing engagement hours from all demographics in gaming now vs other media/entertainment channels. These years it has slowly become one of the most active sectors for investment and M&A. Many new startups trying to create the next Fortnite, Candy Crush or Among Us attract billions of dollars while established and new companies found great exits through M&A (and to a much less extent through IPO/SPAC). All factors above combined make it a great vertical for young bankers/investors to focus on if you are passionate about the industry.
Video game M&A tends to be private, smaller than large-cap TMT (a few billion+ deals per year) but very active in the $100-$1bn EV range. From a business perspective, you will focus a lot on BD/positioning given young bankers usually know the product and trend better. From a technical perspective, it tends to be heavily P&L and operating model (metrics, cohort, etc.) focused vs. balance sheet/cashflow/debt /merger math.
Bulge brackets and well-known EBs historically have not focused on this vertical so you won't be able to focus on this vertical (deal flow is not stable even though every bank has a global head of gaming these days). The top boutqiue banks in this space are Aream (exclusively gaming-focused bank in London and SF), LionTree (dedicate gaming team in SF), and Raine (NYC, SF, Shanghai).
A number of gaming-only VCs also got created last few years (almost zero gaming only VC 5 years ago). The top ones are Makers, Galaxy interactive, Griffin (related to LionTree), London Venture Partners, BitKraft, and a few others. A few tier 1 VCs like Index, A16Z, and Lightspeed also have dedicated gaming teams. All major growth equity or private equity firms claim they have huge interests in this vertical now but only a few have actual experiences - KKR, Blackstone, Insight, to name a few.
You just gonna forget about the distinction between studios and publishers?
Mind enlightening us on the distinction he’s missing instead of just charging him with the omission? would be helpful to the rest of reading, trying to understand the industry nuances better
You got a point. Probably I should use the word content provider vs studio to be more precise but in reality it doesn't matter that much from a banking/investing perspective. Most bankable companies these days have development capabilities and own IP (either developer or developer/publisher hybrid, most likely latter). Pure publishers are rare and less interesting. Pure work-for-hire studios are good targets for cashflow hungry PE but not really growth assets (and with a very different business model).
Does anyone have an insight around what comp is like for the larger gaming-focused VCs (e.g. Makers) at the associate level? Is it fair to assume that they pay similar to street with other VC firms?
Most of the responses here have been about the platform/content side, I'm curious if anyone has seen any institutional money/effort going to e-sports and the leagues there.
Curious about this too. Saw this article from a16z's newsletter last night about this. Pretty interesting: https://future.a16z.com/esports-business-models/
A Wells Fargo MD who does a lot of work with e-sports and gaming leagues recently just got poached by like Jefferies or Oppenheimer, I remember
Silver Lake have done some stuff in e-sports (mainly as part of broader platforms)
They were also in the Unity deal
JPM handles within M&C
Evercore has 1 MD (also deputy COO) who does video game deals. Cool guy, really involved in the video game space as a whole and has published a few board games, I believe. Funnily enough, he started as an energy banker in Houston.
I have some gaming investments in my PA. However, as someone else said the good investments make some of the worst games with predatory business models from a gamer point of view. Good games have a long history of being unprofitable.
What names would you recommend buying into atm?
Bull or bear on EA?
Bear on EA but bull on Activision
Sorry this isn't in the IB/VC/PE categories you mentioned, but Ik there's a HF called Saiga Capital that invests in video game stocks. They came up in some recent articles too.
GS TMT SF has pretty much worked on every major M&A deal in this industry, all the big publishers are their clients
A16Z literally just today announced a $600m fund in this area and they have a few good calling cards w Roblox, Unity, etc. Worth checking out.
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