EQT, Canada’s largest pension fund CPP Investments and Singapore’s state investor Temasek have completed the acquisition of Irish video game company Keywords Studios, as PE managers and allocators pour capital into the gaming industry.
The deal dovetails with private equity’s growing investment in the video gaming industry, a space traditionally dominated by venture capital. In 2024, gaming PE deals have already hit the highest total value they’ve seen in over a decade, coming in at $8.5 billion across 26 deals and surpassing 2023’s total, according to PitchBook’s Q3 2024 Gaming report.
The transaction, which was completed on Monday, is only the latest sign of this renewed interest from PE managers and allocators. In February, for example, Carlyle Group sold gaming developer Jagex—best known for its RuneScape video game titles—to CVC Capital Partners and Haveli Investments
At the same time, new products have emerged to capitalize on limited partners’ interest in the gaming world. Earlier this year, Andreessen Horowitz reserved $600 million for gaming in a broader $7.2 billion fundraise, and VC fund Griffin Gaming Partners launched its third flagship fund.
Stockholm-based EQT, seeing significant growth opportunities for Keywords Studios, first announced the agreement to take the Dublin-based group private at a $2.8 billion valuation in July. Keywords offers services including game development and quality assurance game testing.
The deal included equity investments from co-investors CPP Investments and Rosa Investments, which manages Temasek’s roughly $294.7 billion portfolio. Together, EQT’s fund will own the majority of Keywords and the two allocators will hold 24.5% of the company.
On Monday, CPP Investments, which committed the capital through its $97.8 billion PE strategy, announced it invested approximately $515 million for its stake in the business.
Despite the renewed interest and following the trend seen in broader private market funds, gaming investment exit activity has remained slow over the past two years. Many GPs have been holding onto their investments as they wait for a more opportune time to sell.
So far this year, PE and VC exits of gaming investments are worth a cumulative $2.6 billion, pacing well below 2023’s $5.9 billion and 2022’s $8.9 billion in total exit value.
Featured image by Flavia Morlachetti/Getty Images
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