Investors are pulling money out of studios
Big games cost more to make than ever, but outside investors are putting far less money into the studios that make them. Many studios now say they are focusing on smaller games, and from the outside it is hard to tell choice from necessity.
Where it stands
Private investment in games companies fell from $12.0 billion in 2021 to $2.6 billion in 2025, on InvestGame's count. Matthew Ball's data, published while he was still an outside analyst, puts funding for studios down 85% since 2021. Companies still spend more on making games each year, but that spending grows more slowly than revenue, and a growing share goes to outside contractors. The move to smaller games looks mostly like having less money, not a new creative direction. A rebound in investment in 2026 has gone mostly to technology firms, not to studios.
- Private investment
- Buying whole companies
- Raised on stock markets
Private investment in games companies fell from $12.0 billion in 2021 to $2.6 billion in 2025. Money spent buying whole companies rose from $37.7 billion to $65.8 billion, but the $55 billion sale of Electronic Arts is most of that, so the rise is largely one deal. Private investment here includes technology companies as well as studios.
~Private investment in games companies in 2025, down 45.8% in a year, across 450 deals: our sum of the four quarters on page 8 of Aream & Co.'s Q4 2025 update, which charts InvestGame's data.
~Money spent buying games companies in 2025: our sum of the four quarters on page 8 of Aream & Co.'s Q4 2025 update. The $55 billion sale of Electronic Arts, announced rather than closed, is most of it.
~Money games companies raised on stock markets in 2025, up 12% in a year: our sum of the four quarters on page 8 of Aream & Co.'s Q4 2025 update.
SourceInvestGame's deal data, as reported for each year
| Year | Private investment | Buying whole companies | Raised on stock markets |
|---|---|---|---|
| 2021 | 12 | 37.7 | 24.5 |
| 2025 | ~2.6 | ~65.8 | ~11.2 |
Timeline
2021
The year the money peaked
Investment peaks. InvestGame counts $12.0 billion in private investment (money investors put into companies not traded on the stock market) across 562 deals. Another $37.7 billion went to buying companies, and $24.5 billion was raised by selling shares on stock markets. From 2020 to 2022, private investors put in more than $28 billion across more than 1,460 deals. Late-stage funding across all games companies reached $8.8 billion. Krafton listed on the stock market at $3.75 billion.
InvestGame, Global Gaming Deals Activity Report 2020 to 2022 (February 2023)
2023
Late-stage money for studios dries up
InvestGame's review of 2023: the number and value of deals fell by more than half compared with 2020 to 2022. Studios raised money at lower valuations or shut down after failing to grow into what investors had paid for them. Late-stage funding for game developers and publishers specifically fell from $6.7 billion across 2020 and 2021 to $1.2 billion across the next two years. Seed funding, the first money a startup raises, held up, but the average early funding round shrank from $21 million in 2021 to $13 million.
InvestGame, Global Gaming Deals Activity Report 2023 (13 February 2024)
Spider-Man 2 costs three times its predecessor
Hacked files from Insomniac, the studio behind Marvel's Spider-Man, show that Spider-Man 2 cost about $300 million. That is almost three times the 2018 original and $30 million over budget, and the game needed to sell 7.2 million full-price copies to break even. Miles Morales cost $90 million and sold more than 10 million. An internal slide caps future big-budget games at $350 million.
2024
The rebound is private equity and outsourcing
In 2024, private investment recovers, but the money comes from different places. Private equity firms buy Keywords Studios and Jagex outright. The investment arms of Tencent and Krafton back established studios such as Build A Rocket Boy. Venture funds shift to technology startups, including Inworld AI, Luma AI, and Magic Leap. Companies that make games under contract for others grow as publishers outsource work after layoffs, and Keywords sells for $2.8 billion.
InvestGame, Global Gaming Deals Report 2024 (23 January 2025)
2025
Private investment nearly halves, beside a record buyout
Aream & Co.'s quarterly figures from InvestGame's data add up to $2.6 billion of private investment in 2025 across 450 deals, down 45.8%, beside $65.8 billion spent buying companies, $55 billion of it the announced sale of Electronic Arts. Private investment in the fourth quarter is $0.9 billion, up 29% from a year earlier, mostly in gaming technology and Turkish mobile studios.
Our calculation from Aream & Co.'s figures (13 January 2026)
Ball: content investment at a seven-year low
Matthew Ball's annual State of Video Gaming report: private funding falls another 55% in 2025. Ball counts only startup funding for studios, while InvestGame's 45.8% includes all private investment, so the two numbers differ. In the last quarter, there was under $100 million for the newest startups, just over $200 million for early-stage companies, and about 40 deals in all. At its peak in the third quarter of 2021, early-stage funding was about $1.3 billion. The industry spends more than $40 billion making games for the second year in a row, but that spending, as a share of revenue, falls to a seven-year low even as game sales grow 5% to a record.
PocketGamer.biz, Aaron Astle, on The State of Video Gaming in 2026 (17 February 2026)
Spending on making games flattens, and outsourcing takes the growth
Ball's report, using IDG Intelligence's figures: the industry spends $41.4 billion making games in 2025. That is up $2.3 billion, or 6%, since 2022, after growing $10.9 billion, or 39%, from 2019 to 2022. Outsourcing takes a record 35.5% of that spending, up from 30.6% in 2017. Since 2022, about 65% of the added spending has gone to outsourcing, compared with 33% from 2018 to 2022.
Spending on outside talent rises 63%
Values Value's Talent Signals report: European studios increased spending on outside workers by 63% in 2025, compared with 55% worldwide, and the number of freelancers working with them grew 24%. Nearly 60% of studios say they struggle to find qualified specialists. Among people surveyed, 30% had been laid off in the past year, and it took them about six months to find their next job.
GamesIndustry.biz, Sophie McEvoy, on Values Value's Talent Signals report (11 September 2026)
2026
Down 85% from 2021, below 2019
Ball tells journalist Christopher Dring that investment in studios has fallen 85% since 2021 and is now below 2019 levels. Over the same period, revenue is up 30 to 40%, and the cost of each developer has risen with inflation. Counting only new games, and leaving out the pandemic year, the industry now spends less, as a share of revenue, than at any point on record.
Xbox hires Matthew Ball as chief strategy officer
Xbox names the analyst Matthew Ball, whose report and interview this page draws on, as its chief strategy officer on 20 May 2026. Both date from February 2026, when he was still an outside analyst. From this point his public comments are an Xbox executive's.
Early-stage funding hits a recent low
First quarter: $0.8 billion in private investment across 101 deals. Early-stage funding is at its lowest in recent years, as the economy weakens and investors move money into AI. Spending on buying companies reaches $7.7 billion, led by Savvy's $6 billion purchase of Moonton.
InvestGame, Aream & Co. Q1 2026 Gaming Market Update (8 April 2026)
The biggest quarter in years, mostly not for games
Second quarter: $3.1 billion across 108 deals, about six times a year earlier and the biggest quarter in years. Most of it goes to companies that build technology for the games industry rather than make games, including very large funding rounds for AppsFlyer, General Intuition, Odyssey, and Decart.
InvestGame, Aream & Co. Q2 2026 Gaming Market Update (9 July 2026)
Consequences
012026
More of the money goes to outside developers
The money still being spent is increasingly leaving the studio. Ball says a growing share of game-making budgets now goes to outside development companies, which usually are not the ones coming up with new ideas. His report puts outsourcing at a record 35.5% of what the industry spends making games, with about 65% of the added spending since 2022 going outside. InvestGame saw the same thing in 2024, when contract developers grew as publishers outsourced work after layoffs.
022026
Studios keep a small permanent team and hire the rest
Studios are moving to a two-tier model. A small permanent core of directors, lead architects, and the people who protect a series' creative direction get equity, health coverage, and bonuses. Contractors and freelancers are hired for a short push or one stage of development, then let go when it ends. Tanja Loktionova, the founder of Values Value and author of the report, calls it an industry that has moved past growth at any cost and has not yet found what replaces it.
GamesIndustry.biz, Sophie McEvoy, on Values Value's Talent Signals report (11 September 2026)
032023
Insomniac capped its next games at $350 million
Budget limits come before creative decisions. Insomniac's own slides question whether players can actually see the result of tripling Spider-Man 2's budget, and they cap future big-budget games at $350 million. Miles Morales, which cost less than a third as much, sold more than 10 million copies. A smaller next game is a financial decision before it is a creative one.
Objections
Counterpoint2026
Ball is not sure more money would help
More funding may not be the fix. Ball notes that new ideas are still coming from small projects, pointing to Mewgenics and Block Blast. He says it is not clear whether more venture funding, more studio funding, or reinvesting more revenue would lead to more innovation.
Counterpoint2026
Investors are still spending, but on buying whole companies
Money has not left games. It is buying companies. Aream & Co.'s quarterly figures add up to about $80 billion of deals in 2025, 3.3 times 2024. That includes $65.8 billion spent buying companies, led by the $55 billion sale of Electronic Arts, and $11.2 billion raised on stock markets, up 12%. The money is going to established companies rather than new studios. That is a different problem from investors abandoning games.
Our calculation from Aream & Co.'s figures (13 January 2026)
Counterpoint2026
Investment jumped in one quarter, mostly for tech companies
Private investment reached $3.1 billion in the second quarter of 2026, about six times a year earlier and the most in years, after just $0.8 billion in the first quarter. Most of it went to companies that build technology for games, not to game studios. Whether any of it reaches studios is still an open question.
InvestGame, Aream & Co. Q2 2026 Gaming Market Update (9 July 2026)
What to watch
2026
Whether the second quarter repeats
InvestGame's third-quarter update, due in October. It will show whether the second quarter's $3.1 billion was repeated, and how much went to game developers and publishers rather than technology companies.
2027
Whether the investment share turns in 2027
Ball's next State of Video Gaming report, due early in 2027. Two figures matter: whether spending on making games, as a share of revenue, recovers from its seven-year low, and whether investment in studios climbs back above 2019 levels.
Further reading
- DataThe State of Video Gaming in 2026 (Matthew Ball / Epyllion)matthewball.co
- AnalysisThe state of video games with Matthew Ball, Part Onethegamebusiness.com
- ReportingEuropean studio expenditure on external talent rises 63% in 2025gamesindustry.biz
Where to follow it Matthew Ball / Epyllion annual State of Video Gaming, The Game Business (Christopher Dring), Game Developer's business desk, GameDiscoverCo
- Games companies are still cutting jobs
- Rich markets are losing players, and growth has moved elsewhere
- China's growth is going to Chinese-made games
- Publishers are retreating from live-service games
- Mobile games are struggling to find new players
- AI data centers are taking the memory games hardware needs
- Game prices are stalling as hardware prices climb
- Games media is consolidating and shrinking