Don’t miss: Aream & Co.’s Video Game Market Update Q3 2026 is out this Monday, Oct 12.
Photon maker Exit Games buys back Skillz’s 2021 stake for $55m
Germany-based game tech company Exit Games, the developer of the Photon multiplayer engine, has bought back the ~10.5% stake held by Firy (NYSE: FIRY), formerly Skillz, for $55m in cash. The sale closed on Oct 2, 2026. Skillz invested $50m in Jul’21 to use Photon in its mobile tournaments. With the sale, the two companies also ended the Photon licenses Skillz signed that year, and Firy is using the proceeds to redeem the rest of its 10.25% secured notes on Oct 15.
Photon sells networking software that keeps every player in an online match in sync, plus a hosted cloud that carries the traffic, and charges developers by peak concurrent users. It counts more than 1.4 billion monthly players and 1 million developers, with PC and mobile games including the party royale Stumble Guys, which Photon says it prototyped on its own engine before building it with Kitka Games, the PC ghost-hunting horror game Phasmophobia, and the co-op climbing game PEAK.
The business is profitable. In 2023, the latest year with consolidated group accounts, it made net profit of $39.6m (EUR 36.6m) on revenue of $67.5m (EUR 62.5m), down from $97.7m (EUR 92.8m) in 2022. At the price per share Firy received, the whole company would be worth ~13x its 2023 profit. In 2024, the latest year filed, the parent company alone reported net profit of $24.1m (EUR 22.3m) on revenue of $34.1m (EUR 31.5m). Exit Games was founded in 2003, and co-founder Christof Wegmann remains a managing director. Before Skillz, its outside backers included Bertelsmann Digital Media Investments, Neuhaus Partners and smac partners, which invested $4.6m (EUR 3.5m) in 2007.
Gardens raises $35m+ Series B led by Lightspeed for a social role-playing game from the makers of Journey and Sky
US-based social role-playing game developer Gardens Interactive has raised more than $35m in a Series B round led by Lightspeed Venture Partners, with further closes expected before the end of October. This funding round brought Gardens’ total funds raised to $70.8m, according to InvestGame tracking. Bloomberg reported a $190m pre-money valuation. Lightspeed, which co-led the Series A with Krafton (KOSPI: 259960), expanded its stake. The round is the second-largest of 2026 for a PC & Console games studio tracked by InvestGame, behind only the $100m raised by studio holding company GreaterThan Group.
The round includes Index Ventures, Sequoia Capital, Accel and Eric Schmidt‘s Innovation Endeavors, alongside Zenith Capital, the firm of Fallout TV series executive producer James Altman, and founders including Slack co-founder Stewart Butterfield and FunPlus founder Andy Zhong. Stanford University, Sora co-creator Thomas Dimson, and investor Moritz Baier-Lentz also joined the round. Yamauchi No.10, the family office of Nintendo’s founding family (TSE: 7974), invested again. Gardens’ release describes it as the office’s first and only games startup investment in the family’s gaming legacy of over 100 years. V Pappas, a Lightspeed operating partner and former TikTok COO, joins the board, and Krafton’s Mike Hong replaces Maria Park as Krafton’s board representative.
Gardens was founded in May 2021 by brothers Stephen Bell, its CEO, and Chris Bell, its creative director, with Lexie Dostal, and operates as a distributed studio. The team’s credits include the adventure games Journey and What Remains of Edith Finch and the social adventure Sky: Children of the Light. Its debut, a social role-playing game the studio calls a “strandbox”, is in closed pre-alpha, with no title or platforms announced yet, and the funds go to its launch and live operations.
Xsolla World Map is a free, interactive research tool built for game developers planning to go global. It covers 200+ territories with 30+ data points each: from gamer demographics and top genres to local payment methods, tax requirements, content laws, and cultural localization tips. Instead of piecing together market research from multiple sources, developers get everything in one place to make smarter decisions about where and how to launch their game.
Notable Transactions
MERGERS & ACQUISITIONS
Fireshine Games, the UK-based publishing arm of Sweden-based Enad Global 7 (STO: EG7), has acquired Denmark-based indie games developer Fair Games, the studio behind the survival-crafting game Necesse, for $4.0m upfront. The sellers can receive up to $2.0m more tied to content and platform releases, plus an earn-out of 10-20% of net revenue after service costs with no stated cap. Necesse has sold ~2.5 million copies and generated ~$14.4m in gross revenue since its Early Access launch on Steam in Dec’19. In 2025, the year of its full release, Fair Games made gross profit of $3.4m (DKK 22.5m) and net profit of $2.0m (DKK 13.1m), so the upfront price is 1.2x gross profit and 2.0x net profit, rising to 1.8x and 3.0x including the $2.0m tied to releases. The eight-person studio stays in Aarhus under founder Mads Skovgaard and joins a Fireshine survival-crafting line-up that includes Core Keeper and Len’s Island.
Japan-based Sony Group (TSE: 6758) has sold 43 US extended-reality patents to Meta Platforms (NASDAQ: META) for an undisclosed sum, under an agreement covering 419 patents and applications: 180 in the US, 96 in Japan, 81 in China, 27 in Germany and 35 in the UK, France, South Korea, the Netherlands, India and Italy. The agreement took effect on Dec 17, 2025, and the US transfers were recorded in five filings from Jun 30 to Sep 18, 2026. The patents cover XR information processing, head-mounted displays, and XR glasses, filed from 2010 to 2022. PS VR2 has been unavailable at PlayStation Direct in the US since mid-September, and Meta’s Reality Labs lost $4.6B on $431m of revenue in Q2’26. Meta itself, as Facebook, paid $2.0B for Oculus in Mar’14. More recently, Google, part of Alphabet, paid $250m in Jan’25 for part of HTC’s Vive XR team and a license to its XR IP. Saudi Arabia’s Public Investment Fund invested $400m in AR headset maker Magic Leap in Mar’18 and an additional $750m in 2023-24, according to Magic Leap’s UK filings.
Japan-based games publisher Nexon (TSE: 3659) has named Chernin Entertainment, the film and TV drama production arm of Peter Chernin’s The North Road Company, lead producer of film and television adaptations of the extraction shooter ARC Raiders and the F2P arena shooter The Finals, both from its Sweden-based studio Embark Studios, under a partnership agreement on undisclosed terms. Chernin was chosen from a field of competing production companies and studios. ARC Raiders has sold more than 16 million copies since its Oct’25 launch, and The Finals has registered more than 30 million players in three years, according to Nexon.
VENTURE FINANCING
US-based Thrixel, an AI-native 3D creation platform, has raised $3m in inception funding from Sierra Ventures, MFV Partners, Harper Court Ventures and Z5 Capital, with participation from AI researcher Jon Barron and games investor Matt Bilbey, formerly of Electronic Arts. Founded by University of Chicago computer scientist Rana Hanocka, Thrixel generates 3D assets as named, hierarchical parts that AI coding agents can assemble and animate inside standard game engines.
US-based micro studio Job Studios has raised $500k from CGT Capital Group, a Wyoming-based single-family office led by managing partner Christopher Parker, which takes a stake and plans further marketing funding. The studio is developing Close Quarter Combat, a cooperative PvE shooter for PC and Xbox built in Unreal Engine 5, in which squads of five, with AI teammates filling empty slots, take on AI enemies. Its target price is $19.99.
US-based Reactor, the developer platform for real-time generative video and world models, has added NVIDIA (NASDAQ: NVDA) and Sapphire Ventures to its Series A round led by Lightspeed Venture Partners, for an undisclosed sum. Reactor was founded in 2025 by Alberto Taiuti and Bryce Schmidtchen, former technical leads on the Vision Pro at Apple (NASDAQ: AAPL). Taiuti co-founded Luma AI. Reactor emerged in May’26 with $59m across its Seed and Series A, and runs generative video and world models at more than 60 frames per second for media companies, world-model labs and robotics teams.
Türkiye-based mobile games developer Mobge Games has raised an undisclosed sum from Joygrid Ventures at a $10m valuation. The İzmir studio made the Viking platformer Oddmar, which won a 2018 Apple Design Award and was later released on Nintendo Switch, and is now focusing on mobile action games with global growth potential.
Public Market Performance
It was a flat week for the tracked universe: of 64 eligible companies, 32 rose, 31 fell, and 1 was flat, with a median move of +0.03%, over the Friday Oct 2 to Friday Oct 9 window.
Share Price Signals
Enad Global 7 (+12.32%) rose after its publishing arm, Fireshine Games, acquired Fair Games, the studio behind the survival-crafting game Necesse, on Oct 7 for $4m upfront from available cash. The game has generated $14.4m in gross revenue since 2019, and EG7 expects it to contribute positively to group results.
Mattel (+9.30%) extended last week’s rally as pressure to sell mounted. Ariel Investments, which owns 5.4%, urged the board to consider a sale, as reported on Oct 5, and toy maker Zuru was reported on Oct 7 to be exploring a rival bid. Both add to Authentic Brands Group’s reported approach at more than $20 a share.
Unity Software (+7.50%) rose after Google and Unity announced a partnership on an AI gaming platform on Oct 7, connecting Unity’s upcoming AI game-creation tool Spark, due later this year, with Google’s Playground and Play Games services. Raymond James upgraded the stock to Outperform from Market Perform on Oct 8, with a $54 target, citing a stronger-than-expected Grow advertising business led by Vector, and the Google partnership as a response to concerns about Unity’s creator funnel.
PLAYSTUDIOS (-16.97%) fell in its first full week after a 1-for-10 reverse stock split took effect on Oct 1. On Oct 6, it disclosed it would shut down the puzzle game Tetris Block Party in October and book a $3.0-3.5m non-cash impairment, following the earlier closure of its Win Zone product.
Modern Times Group (-15.05%) fell after it postponed the planned IPO of its India-based casual games developer PlaySimple on Oct 9, citing conditions in the Indian capital markets, and said it will revisit the timing in 2027. Handelsbanken had named the listing a potential catalyst for the stock two days earlier.
Paradox Interactive (-9.45%) fell after ABG Sundal Collier cut its rating from Buy to Hold on Oct 5 and lowered its target to SEK 155 from SEK 160. ABG said sales of the transport tycoon game Transport Fever 3 were disappointing relative to its budget and would weigh on profitability through 2028, and that the shares trade at ~16x expected 2027 EBIT versus ~10x for peers. Handelsbanken kept its Buy rating but cut its target to SEK 160 from SEK 168 on Oct 7.
NCSOFT (-7.88% through Thursday Oct 8, the last session of the week in Seoul) fell as the Western and Japanese launch of the MMORPG Aion 2 on Oct 5, following its Korea and Taiwan release in Nov’25, drew a strong but not exceptional audience. NH Investment & Securities put the launch-day peak at 398,000 concurrent players, easing to ~200,000 by Oct 7, and on Oct 8 cut its target to KRW 320,000 from KRW 380,000 while keeping Buy, citing lighter expected monetization than the MMORPG Throne and Liberty.
