Investment Rating - The report indicates a very positive outlook for the gaming and tech market in 2025, anticipating significant M&A activity and strategic consolidations [55]. Core Insights - The gaming M&A and financings in 2024 reached a robust $27.3 billion in disclosed deal value across over 960 transactions, marking a 39% increase compared to 2023 [3][4]. - M&A activity in 2024 saw a 21% increase in deal volume over 2023, with 198 announced deals valued at $10.5 billion [4]. - The PC/Console segment was the most active in M&A with 53 deals, followed by Mobile with 38 deals [4]. - A total of $4.8 billion was raised across 711 private placement deals, reflecting a 30% increase in total disclosed value [4]. - The Drake Star Gaming Index rose 10.4% for the year, driven by strong performances from companies like Sea / Garena and Konami [4]. - Major transactions included Tencent's $1.2 billion acquisition of Easybrain and Modern Times Group's $820 million purchase of Plarium [4][29]. Summary by Sections M&A Activity - In 2024, M&A activity included high-profile deals such as EQT's $2.8 billion acquisition of Keywords and CVC's $1.1 billion purchase of Jagex [4]. - The report highlights that private equity firms are expected to remain very active, with potential candidates for delisting including Ubisoft [55]. Financing - Major financings included Epic's $1.5 billion round led by Disney, along with significant raises for Infinity Reality ($350 million) and Build A Rocket Boy ($110 million) [4]. - Over $1.8 billion was raised by funds in 2024, indicating renewed investor interest [55]. Market Trends - Key growth segments anticipated include AI, tech platforms, and blockchain, driven by the recovery of the crypto market and new regulatory endorsements [55]. - The report predicts that major releases in 2025, such as the Nintendo Switch 2 and Grand Theft Auto 6, will significantly boost player engagement and revenues [55].

12.8% 17.7% 17.1% 10.6% 6.4% 10.5% 9.9% 5.0% 4.0% 8.1% 20.9% 16.2% 19.4% 16.1% 4.1% -8% -4% 0% 4% 8% 12% 16% 20% Consensus EPS Growth (FY25/FY24) EPS y/y Prepandemic 7y Median BigTech = Meta, Apple, Nvidia, Microsoft, Amazon, Alphabet. CONDx = Discretionary w/o Amazon. Data as of 1/6/2025. Source: LSEG Data & Analytics, Bloomberg, Barclays Research Equity Research Equity Strategy 10 January 2025 U.S. Equity Strategy Food for Thought: Which Sectors Are Expected to Drive EPS Growth in '25? With 4Q24 earnings ...

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