Greenfield foreign direct investment (FDI) in the video game industry accelerated to its highest ever level in 2022, as companies searched for international talent and growth opportunities after higher spending on gaming during the pandemic.

Between January and November 2022, more than 140 global FDI projects worth an estimated $3.6bn were announced in the video games, applications and digital content sub-sector, according to the latest figures from foreign investment monitor fDi Markets. This is almost double the 88 FDI projects announced in the sector during the whole of 2021.


Piers Harding-Rolls, research director for games at Ampere Analysis, told fDi that several factors, including higher spending on games and valuations of gaming companies, set the stage for many firms to expand their global footprints.

“These conditions have driven companies to look outside of their local markets to access talent and to gain footholds in markets which will become increasingly important in the future,” he said, noting southeast Asia as an example. 

One example of this was Japan’s Sega establishing a new subsidiary in Singapore in October 2022, which will “conduct local market research and marketing” in southeast Asia. The global increase of video games FDI in 2022 came as more (96) gaming companies announced cross-border projects than ever before.

These included League of Legends creator Riot Games, Swedish smartphone game developer G5 Entertainment, and Cyprus-based game holding company Room 8 Group, which all announced at least 5 FDI projects each.

The Silicon Valley-based game development tools maker Unity Technology was the most active investor, announcing last March that it planned to hire more than 1000 new staff across its 47 global locations. In November 2022, Unity also formally completed its merger with advertising tech company IronSource, in a $4.4bn all-stock deal.

While Unity’s expansion followed the company raising $1.3bn in an initial public offering in 2020, and a substantial increase in its revenues, it has had to reverse course on some of its expansion plans. In January 2023, Unity said it would lay off more than 200 jobs — a further cut from the 225 layoffs announced last June.


Mr Harding-Rolls said he expects video games FDI to fall in 2023, compared with 2022, given the backdrop of job losses and de-risking happening across the tech sector.

“Talent in local markets is likely to be more available because of major companies shedding jobs and companies will be acting more cautiously,” he added, noting that a more unpredictable macroeconomic environment will make companies take more defensive moves.

Growing levels of video games FDI mirror the dynamics of a market in rapid expansion. Global spending on games grew by 34% to $192.7bn between 2019 and 2021, while it fell back to $184.4bn in 2022, according to data provider Newzoo

Guilherme Fernandes, Newzoo’s market consultant, told fDi that most of the fall in 2022 game spending was on mobile games, due in part to changes in privacy regulations in major markets like the US and Europe, but that they expect to see a recovery in spending in the coming years. Newzoo forecasts global spending in 2025 to reach $211.2bn, an increase of 14.5% on 2022 estimates.

Big tech companies have increasingly made bets in gaming as it has become an increasingly popular form of entertainment. Mr Fernandes notes that gaming has always been a goal for big tech as they see it as “a very engaging way to interact with their audience”. Facebook’s parent company Meta is planning to open a new engineering hub with 2500 new jobs in Toronto, Canada, which will focus on extended reality and metaverse technologies.

In January 2022, Microsoft said it would acquire Activision Blizzard, the studio behind well-known titles like Call of Duty and World of Warcraft. However, the $69bn deal is facing a US lawsuit which claims it will “create a monopoly in the video game industry”.