The weakness of the Turkish lira combined with high levels of smartphone penetration and strong government support, have created conditions for mobile-first gaming companies to flourish in Turkey.
Local studios, which specialise in producing high-quality games for the international market with low costs, are attractive to foreign investors and content publishers. One precedent-setting deal came in May, when private equity (PE) firm CVC announced an investment to become the sole equity partner in Dream Games, the developer of games like Royal Match and Royal Kingdom.
The transaction, which is expected to close in 3Q25, is worth EUR 3.06bn. Largely on the back of this single deal, Turkey’s mid-year M&A volumes are already ahead of the full-year (FY) results for 2024, according to Mergermarket data.
Eighty-one Turkish deals worth a combined EUR 6.6bn have been announced in the year to date (YTD; 11 July), compared to 201 deals worth EUR 6.4bn in FY24. The Dream Games transaction accounts for 46% of the aggregate volumes in the YTD.
Meanwhile, the result in 2Q25, driven largely by this deal, is the best quarterly result by volume since 1Q13. The previous quarterly record came before Recep Tayyip Erdoğan became the country’s president in August 2014. His emphasis on unorthodox monetary policy in subsequent years has caused a large depreciation of the lira since 2018.
The lira began to plummet in July 2018. The result so far in 2025 is the best YTD score since YTD18.
The weak lira has helped players in the fast-growing mobile-first gaming sector by driving down development costs while exporting mobile games to the US, Europe, the Middle East and North Africa. As a result, the sector is both buzzing and here to stay, one Istanbul-based advisor said.
Istanbul, Turkey’s largest city, which has territory in both Europe and Asia, has become the second-biggest gaming hub in Europe after London, with approximately 850 active studios. The government has created tax incentives to encourage the industry.
Dream Games is one of two Turkish gaming unicorns, alongside Peak Games, which became the country’s first unicorn in 2020 when Zynga bought it for USD 1.8bn. The transaction is one of the San Francisco-headquartered company’s seven disclosed deals in Turkey between 2017 and 2021.
CVC’s Dream Games deal is so large that it dominates the YTD table for the sector. The YTD result is 50% ahead of the YTD20 result (including Peak Games). This, in turn, stands head and shoulders above the results for YTD21 to YTD24.
Rule of law issues
Although mobile gaming is a bright spot, the mood in the broader Turkish market is more subdued.
On 19 March, Istanbul mayor and presidential candidate Ekrem Imamoglu, a leader of the opposition to Erdogan, was arrested. The decision, which was perceived by many as a crackdown on the opposition, raises a question mark over the rule of law, which has a read-through for M&A, dealmakers said.
There has been a ripple effect on Turkish deals outside the gaming sector. For example, Mayhoola’s talks to sell 60% stake in Turkish luxury retailer Beymen stalled after sources cited political and currency risks, this news service reported in mid-May. Another Turkish company, drug manufacturer Farma-Tek, has also faced similar issues around the same time.
The weakness of the lira also often creates a pricing gap between sellers and buyers, one source familiar with the situation said. This is particularly the case in industries that rely on imports for parts, this source added.
The currency issues also hinder Turkey’s moves from a low-cost but highly skilled workforce to one with higher salaries, one international banker said.
Game on
Despite the cautious mood in the wider market, mobile-first gaming deals (including institutional fundraising rounds) are expected to continue to thrive.
Large investment rounds act as a signal of names to watch. These include Spyke Games, which raised USD 50m from Moon Active in May 2024. It has raised more than USD 100m in total.
Meanwhile, Bigger Games raised USD 25m in a Series A round in June. The round was led by Goodwater Capital, while Arcadia Gaming Partners, Play Ventures and Index Ventures also invested.
Ace Games is looking to raise USD 25m to USD 40m, according to a report on this news service in April. It had previously raised funds from Playtika and Re-Pie.
On the buyside, local venture capital (VC) firm Laton Ventures will focus on the sector with its debut USD 50m fund. The VC, which is domiciled in the Netherlands, wants to invest in pre-seed and seed rounds, with 65% allocated to Turkey.
Earlier this year, Laton Ventures backed a Series A round to raise USD 30m for Grand Games. The round was also backed by Bek Ventures.
Meanwhile, CVC is far from the only international investment firm to have committed capital to the sector. Blackstone provided debt financing to Dream Games after the announcement of the CVC deal; while names including Makers Fund, BlackRock and Balderton Capital committed to the company’s Series C round in 2022.
The fundraising pipeline could generate more unicorns in the years to come, with the sector acting as a bright spot in a politically sensitive market.
