A $55B take-private, private investment more than tripling YoY, and consoles posting their steepest drop in two years.
Drawing on Aream & Co.’s financial advisory experience and InvestGame’s data intelligence, the Video Game Market Update Q3 2026 breaks down where deals closed, capital concentrated, and platform growth persisted in the global gaming market.
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Tencent leads $46m round in Flow Games as Türkiye out-raises Asia-Pacific and North America in mobile game funding
Türkiye-based mobile games developer Flow Games has raised $46m in a round led by Tencent (SEHK: 700), which provided about three-quarters of the amount, with Makers Fund, Arcadia Gaming Partners, and Ludus Ventures also participating. It is the studio’s second round after a $2.5m Seed led by Ludus Ventures in Jul’25, bringing total funding to ~$49m. Flow will put the new money into Smash Fest!, its team, and new mobile titles.
Flow’s only game so far, the physics-based cannon-and-destruction puzzle game Smash Fest!, reached No. 1 among free games on the US App Store in late June, weeks after its global launch, and has passed 23 million downloads, Flow says. Player spending has reached ~$8.9m, according to AppMagic estimates, with most revenue coming from ads. The format caught on fast: since June, nearly 50 games with “smash” in their names have launched, according to AppMagic.
Flow’s founders come from the studios behind Istanbul’s puzzle boom: CEO Mehmet Emin Taşcı from Good Job Games, CTO Baturay Üstündağ from Peak and Fomo Games, and art director Aygün Kaplan from Bigger Games and Dream Games.
Türkiye has led the world in private funding for mobile game studios since 2025, overtaking the US, the leader in every year since 2020, in InvestGame data. From Jan’25 to mid-Oct’26, Türkiye-based mobile studios raised ~$400m, close to 40% of the global total over the same period and more than all of Asia-Pacific or North America.
The money is following a proven playbook. Peak Games opened Türkiye’s run of games unicorns when Zynga bought it for $1.8B in 2020. Dream Games, founded by Peak veterans, reached a $1.0B valuation in 2021. In 2025, its venture investors sold out in a ~$2.5B deal financed with $1.0B of equity and ~$1.5B of debt, in which CVC Capital Partners took a ~30% stake. In February, Scopely bought a majority stake in Loom Games in a deal valuing the studio at ~$1.0B, and in May, Grand Games’ $70m Series B left it close to unicorn status, according to lead investor Balderton. It is no surprise that Türkiye has become a top hub for mobile game funding.
Flow’s round is the third-largest for a Türkiye-based mobile studio since Jan’25, after Grand Games’ $70m and Good Job Games’ $60m Series A. It is also Tencent’s second bet on an Istanbul studio in three weeks: in late September it led the $25m Series A of puzzle developer Circle Games.
Notable Transactions
MERGERS & ACQUISITIONS
US-based The Walt Disney Company (NYSE: DIS) has placed a $20m opening bid for assets of US-based AI entertainment platform Character.AI, which has filed for Chapter 11 bankruptcy. Through Disney Worldwide Services, it would get a perpetual, non-exclusive license to Character.AI’s model-building code and patents, plus Character.AI’s right to sue the former staff who joined Disney. Character.AI keeps operating during the sale, which is open to higher offers until Nov 20, 2026. Disney paid $7.5m in Sep’26 and owes $12.5m at closing, targeted for late Nov’26 or early Dec’26. Of Character.AI’s ~86 employees, 66 have accepted Disney jobs, including former CEO Karandeep Anand, whom Disney named chief technology officer in the newly created role.
US-based gaming and creation platform Roblox (NYSE: RBLX) has brought the team behind US-based AI audio startup Audioscape in-house on undisclosed terms. Audioscape’s AI audio search and discovery technology, plus its AI Audio Agent for sound design, audio programming, mixing, and testing, will become part of Roblox’s creator tools. Founder Sean Varah will focus on audio and music authoring across the Creator experience, and co-founder and CTO Filipe Herculano will focus on agentic search.
South Korea-based mobile games developer and publisher SKYWALK has acquired the global service rights and joint IP ownership of the social network game Welcome to My Home from South Korea-based games publisher Kakao Games (KOSDAQ: 293490) and its subsidiary MetaBora for an undisclosed sum. The rights include development and business authority over the IP, covering follow-up titles. The game launched in 2016 and has nearly 5 million registered users worldwide, SKYWALK says. SKYWALK plans to reopen the shut-down service in South Korea first, then Japan, Greater China and English-speaking markets.
Japan-based XR content studio MyDearest has acquired 100% of Japan-based game studio moze, which builds games and branded experiences on Roblox (NYSE: RBLX), for an undisclosed sum, effective Oct 16, 2026. MyDearest plans to merge moze into itself and says it will apply moze’s Roblox development and live-operations know-how to its VR, AR, and Steam games. moze’s tower obby Troll Escalator Tower has passed 24 million lifetime visits.
China-based education technology company Skillful Craftsman Education Technology (NASDAQ: EDTK) is acquiring a 70% stake in Singapore-based casual game developer and publisher URAY from its sole owner, who keeps 30%, for 500,000 restricted EDTK shares. EDTK plans to extend its AI from education into game creation and global publishing. On top of that, an earn-out in EDTK shares rewards URAY’s team for hitting three years of revenue and EBITDA targets. Closing is expected in Q4’26 and depends on the owner moving the game IP and advertising accounts he owns personally into URAY.
VENTURE FINANCING
India-based AI-led mobile gaming studio Spill Games has raised $10.5m in a Series A led by Elevation Capital, with existing investors Centre Court Capital and PeerCapital also participating. Spill makes mobile casual puzzle games, led by crossword titles such as Zen Math Crossword and hidden-object games under the Cozy Finds name. The round follows a $3.1m Seed in Apr’26. Proceeds will fund user acquisition, new game development, team expansion, and further development of its in-house engine, Compass. According to the company, the number of its games with scalable, profitable metrics rose from three to six in under three months. Founded in 2024 by former PlaySimple Games operators Om Misra, Tapan Ranjan and Harsh Garg, Spill runs a 16-person team.
US-based, Romanian-founded AI voice moderation company VoicePatrol has raised $3.4m in a round led by GapMinder VC, with participation from Ollin Ventures, Impact Ventures, and The Build Fund. VoicePatrol monitors public lobbies in multiplayer games. It says its platform acts within five seconds and cuts severe toxicity by 55-75% within three weeks of enabling auto-warn and auto-mute. GapMinder also led the company’s previous round in Mar’25.
China-based multiplatform games developer and publisher Kuro Games, a 51.4%-owned subsidiary of Tencent (SEHK: 700), has taken a 15% stake in China-based AI audio company Yanzhiyu Technology. The stake is Kuro’s first disclosed AI investment, and Kuro chairman Liu Sheng has joined Yanzhiyu’s board. Founded in 2024 by Xie Weiduo, Yanzhiyu develops the voice cloning and dubbing platform Vocu, which Yanzhiyu says has passed 1 million users.
China-based AI game-mod creation platform ModCraft has raised tens of millions of RMB in a Seed round, according to 36kr, backed by SenseTime Guoxiang Capital and L2F Lighthouse Founders’ Fund, the early-stage fund of Lighthouse Capital. Users build playable mods for 28 Steam games by describing them in plain language. The funds will go mainly to AI model training and platform growth. ModCraft says it has reached cooperation with ByteDance and other model vendors to supply training data. Founder and CEO Li Shuo previously produced the strategy game Game of Thrones: Winter is Coming.
PUBLIC OFFERINGS
China-based games company iDreamSky Technology (SEHK: 1119) is raising $7.42m (HKD 58.24m) by placing up to 187,856,000 new shares. Net proceeds of ~$7.2m (HKD 56.63m) will go to AI agent R&D, game operations and marketing, and game development.
Public Market Performance
Of 63 eligible companies in the tracked universe, 33 rose, 29 fell, and 1 was flat, with a median move of +1.1%, over the Friday Oct 9 to Friday Oct 16 window.
Share Price Signals
Unity Software (-13.8%) had no company news; it fell with the market after the hot US inflation print on Oct 14 and the software sell-off on Oct 16.
Nazara (+10.7%) said on Oct 12 that its board had allotted ~23.9 million new shares at INR 306 each, raising ~$76m (INR 7.31bn), to five sellers of Bluetile and BestPlay, led by Bluetile founder and Nazara CEO Raymond Albaladejo Stauffer, who reinvested much of their sale proceeds. The board also approved leadership changes: founder Nitish Mittersain stepped down as managing director after nearly 27 years and will remain a non-executive director, subject to shareholder approval; CaratLane co-founder Mithun Sacheti became executive director for a five-year term; and Arun Agrawal became chief financial officer from Oct 16.
Kakao Games (+9.8%) rose after its new MMORPG World of Dokkaebi, developed by Supercat, reached No. 1 on Google Play revenue on Oct 13, five days after its Oct 8 launch. On Oct 15, Hanwha Investment & Securities kept its Buy rating and raised its target to KRW 12,000 from KRW 10,000, calling the launch the trigger for a rebound and a chance to re-rate a publisher whose revenue rests on one game.
Bandai Namco (+8.0%) said on Oct 9 that the flight shooter ACE COMBAT 8: WINGS OF THEVE passed 1 million units worldwide within a week of release, the fastest in the series and its first mainline entry in seven years. The company says it holds the second-highest critics’ score in the series.
Konami (+7.5%) gained after Morgan Stanley MUFG Securities kept its Overweight rating and raised its target to JPY 26,000 from JPY 25,000 on Oct 15. It lifted earnings-per-share forecasts 7% for the year to March 2027, 5% for the next year and 4% for the one after. It cited strong results from the football simulation eFootball, with its global rollout still expanding; a good start for the role-playing game Suikoden STAR LEAP; and trading-card upside after the Yu-Gi-Oh Original Artwork Collection reached Japanese stores on Sep 26.
Frontier Developments (-8.3%) fell 12.9% on Oct 14, the day after it launched the zoo-management sequel Planet Zoo 2 on PC, PS5, and Xbox Series X|S. The launch numbers were strong: the game peaked at 45,101 concurrent players on Steam, 17% above the original and more than double Jurassic World Evolution 3, and sold ~188,000 Steam copies, including pre-orders, by the end of its second day, against ~124,000 for the original, according to Alinea Analytics estimates. Players have been harsher than critics: despite a Metacritic score of 85, Steam user reviews slid to “Mixed” by Oct 16, at ~65% positive, down from 91% for the original, mostly over launch bugs.
Earnings Calendar: The Week Ahead
