Global gaming revenue breaks $82B, M&As doubled in 2011

Digi-Capital review finds gaming will grow but social games can't rest on Facebook much longer

Social gaming has proven itself to be a strong revenue driver for companies that can bring in those freemium players. One investment firm, Digi-Capital, published its in-depth review of the global gaming space, Thursday that shows just how profitable and vast the global gaming space is.

Digi-Capital found that online and mobile games are poised to grow into an $82 billion market with a revenue share of 50% as the historically popular console gaming flattens out. 

Social and mobile gaming has done something that few thought was possible, turned some of the least likely demographics into serious and paying gamers -- the over 40 crowd, and this is proving to be a great growth market for gaming companies and an enticing market for advertisers that want to reach that market.

Last year, gaming investment and M&A more than doubled just as private placements grew by 96% to $2 billion.

Also, the number of transactions increased by 67% to 152 -- showing just what a boom gaming companies are experiencing right now.

In fact,  the average fundraising round increased by 17% to $13 million just as two big players in the gaming space (Zynga and Nexon) put in their IPOs. 

All of this attention and response to growth in gaming resulted in an 88% boost to M&A volume, brining it to 113 transactions -- with a value bump of 160% over the previous year (equating to $3.4 billion). And you can bet that protective buyers and sellers in the gaming weld like to hear that the average M&A deal size grew 38% to $30.4 million. Ca-ching!

While global gaming can be broken down in to multiple segments, it is important to note that the biggest players making money are still US console and media companies such as EA, Popcap, Disney and Playdom, but US gambling and Japanese mobile companies are gearing up for some serious action.

The biggest segments in global gaming for 2011:

And since so much attention has been placed into the social and mobile markets: Here is a look at the big players that have gotten serious investments in 2011.

Even with the US showing increased interest in gaming, the Chinese, Japanese, and South Korean gaming companies continue to be powerhouses in the gaming world and, according to the DIgi-Capital review, are still interested in buying up US companies in order to acquire talent and consolidate the market.

The report also anticipates that Asia and Europe will take 87% of the revenues for online and mobile games, with China leading at 36%, followed by Europe at 20%, then South Korea at 12%, and Japan at 10%.

Also the development of independent platforms will be crucial for gaming companies to survive over time -- working on the Facebook system just won't be enough to be a powerhouse for much longer. And the churning out of low cost games and reports of flopped releases will start catching up to companies as the industry matures.