It's rough out there, folks.
It feels like almost every day, there's another announcement on X about studio closures and layoffs. PlayStation is killing discs. Xbox is hitting the reset button. Nintendo... well, they've always done their own thing.
But these are the ways we've learned, as players and fans, to evaluate the industry. What are the major platform holders doing? What are the studios that release on those platforms doing? Judged solely on this framework – fairly in many ways, as this is the framework that has defined the past three decades of video games – the outlook is dire.
But the industry is no longer dominated by PlayStation, Xbox, and Nintendo. If we look further, towards the ways in which the video game industry is changing and evolving, we see an ecosystem less dire. We begin to see winners where we're not looking. We see capital markets investing heavily into mobile. We see user-generated content exploding. We see players playing more, and for longer, than ever before.
Leveraging recent publications from Aream & Co and Drake Star Partners, I want to showcase the players who are winning where we're not looking.
We can't (and shouldn't) ignore the winners.
Scan past the gloom of the index, and the leaderboards shine – by platform, region, users, and many more. Records are being broken all around us.
Sweden's developer ecosystem posted +60% YoY Steam revenue growth, powered by Embark Studios' Arc Raiders ($339m lifetime) and Battlefield 6 ($457m). On mobile, Türkiye's Grand Games scaled to 50M downloads across 200+ countries and topped the US iOS charts before raising a $70m Series B, while Astrocade's AI game-creation platform went from nothing to 5M monthly active users and 140M+ monthly plays in under two years. User-generated content is exploding on Roblox, where an indie studio logged 6 billion visits in a single quarter. Even hardware had a breakout: Nintendo's Switch 2 catalog drove +90% YoY console revenue growth almost single-handedly.
Look closer and you'll realize just how diverse this set of winners is – veteran studio, first-time developer, mobile scaler, UGC, hardware refresh. Success is no longer gated by hardware – it shows up through multiple different avenues. At what other point in games history have so many creators won across so many different avenues? None.
Engagement is healthy and growing.
Amidst all of the anxiety about layoffs and closures, one thing remains true: we are still here, and still playing.
Steam sustained 13% year-over-year revenue growth in Q2, with peak concurrent users approaching all-time highs even during a seasonally soft quarter — a five-year CAGR of 13% for free-to-play titles and 16% for paid games. Roblox, Fortnite, and Steam all held steady or grew in concurrent user counts, and Twitch and Kick combined viewership stabilized after a period of decline, buoyed by strong new franchise releases.
Engagement, not sentiment, is the leading indicator for an entertainment medium. This signifies a market change, rather than a market decline, and change happens all the time across all entertainment mediums. Video games are certainly no stranger to needing to adapt – it's crashed once before. It's a technology-first medium, and technology will evolve in ways that are hard for us to anticipate. Look at how movies needed to adapt to COVID. The doom of the softened theatrical release is slowing – major directors (Christopher Nolan with The Odyssey) and franchises (Dune, Avengers) are pulling us back to theaters because we never stopped watching.
The numbers and metrics are clear: players are still playing. As long as that holds true, the games industry will continue to meet us – sometimes in mysterious ways.
Capital markets are making a roaring comeback.
After several quarters of cautious investment following the COVID-era rush, capital is coming back into gaming from every direction.
Aream & Co. counted 54 M&A transactions worth $2.3bn in Q2 2026, the highest deal count since 2022, while private investment separately surged to $3.1bn across 108 rounds – roughly 6x last year's pace. Drake Star's independent count puts private placements at $2.5bn across 96 deals, calling it the strongest quarter for disclosed financing in the past twelve months. On top of both, more than ten new gaming-focused funds, worth over $2bn combined and spanning everything from AI tooling to game studios, launched in the quarter, including Shamrock's $813m Content Strategy Fund and fresh vehicles from Nexon and Kensei Capital. Buyers, investors, and allocators are all showing up at once, and they're hungry. Three forces appear to be driving it.
First, valuations reset low enough to flip from risky to cheap, making acquisitions look like a bargain. Mobile-first stocks trade at just 4.5-4.7x EV/EBITDA, and even large-cap PC/console names sit at 9-9.4x, down from mid-teen highs.
Second, much of the M&A is actually cleanup from COVID's 2021 free-money boom: management buyouts like Fenris Creations (formerly CCP Games) from Pearl Abyss, and founder stake sales like Wemade's, are studios unwinding overextension at more sober prices.
Third, private equity has capital that needs deploying. Sponsor-backed gaming deals have topped $84.7bn cumulative, with TPG, Blackstone, and Haveli among the active buyers over the past year, and credit is loosening enough to make leveraged deals pencil again.
The COVID hangover is clearing. Buyers are pulling the trigger at realistic valuations. Investors are cutting checks. This is what recovery looks like.
An Industry Adapting
As I said in the intro, we are in the midst of an industry change. The rules are changing. The needs are changing. The desires of younger demographics are changing.
My goal isn't to say that this change exists without heartache. There are still job losses and closures, and these are difficult and unfortunate to experience as fans. But to view them in isolation, as the sole marker of how we define industry health, would be to ignore how our industry is evolving.
The question should not be how can we reinstitute the old ways. It should be how do we evolve along with it?
