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The State of Gaming in Q2 2025
- At GDC in March, discussions in the gaming industry were focused on topics beyond gaming, such as acquisitions and expansions.
- The global gaming market is expected to reach $186 billion by 2026, with 3.4 billion gamers worldwide.
- Private investments in gaming startups hit a five-year low in Q1 2025, but VC funding rebounded with $373M raised across 77 deals.
- Strategic M&A activity is picking up, driven by mobile gaming studios and notable deals like Scopely's acquisition of Niantic.
- AI + Gaming startups attracted $1.8 billion in funding during 2020-2024, indicating a growing interest in AI technology.
- Mobile gaming revenue is rising, with a focus on hybrid monetization models, live services, and privacy-aware engagement strategies.
- The erosion of Apple's App Store monopoly is expected to benefit developers by reducing the 'Apple tax' and unlocking more revenue.
- North America leads in IAP revenue growth, but other regions like Europe, Latin America, and the Middle East show promising growth prospects.
- Gaming founders are advised to embrace direct monetization, hybrid revenue models, focus on retention, expand globally, and innovate distribution strategies.
- VCs are placing bets on alternative distribution models, live-service infrastructure, emerging market studios, AI-enhanced development tools, and strategic acquisition targets.
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