M&A of game studios: Legal issues businesses need to consider when buying or merging with video game development companies

In recent years, the video game market has boomed, along with an increase in investment, mergers, and acquisitions. Instead of building a team from scratch, many investors choose to acquire or merge with game studios to quickly gain ownership of existing technology, products, personnel, and user base. However, M&A of game studios is not simply a transaction involving the transfer of capital or assets. It's a process that involves many specific legal factors such as intellectual property rights, user data, employment contracts, game publishing licenses, and the financial obligations of the target company. A thorough assessment of these factors is crucial to the success of the deal.

1. What is M&A for game studios?

1.1. Game studio acquisition activities

Acquiring a game studio is when an individual, organization, or business conducts a transaction to acquire all or part of the controlling stake in a video game development company.

Acquisitions can be carried out through the transfer of shares, the transfer of equity stakes, or the acquisition of key business assets such as game products, technology, brands, and operating systems.

1.2. Game studio merger activities

Merger is the process by which one or more businesses transfer all their assets, rights, obligations, and legal interests to another business, while simultaneously terminating the existence of the merged business in accordance with the provisions of business law.

In the gaming industry, mergers are often undertaken to expand operations, increase product development capabilities, or leverage the resources of the parties involved.

1.3. Why are M&A deals involving game studios becoming increasingly popular?

The gaming industry is fast-paced and highly competitive. Having an experienced development team, a product already accepted by the market, or a stable user ecosystem can significantly save businesses time and money.

Therefore, M&A has become one of the growth strategies chosen by many gaming companies, investment funds, and technology corporations.

2. Key assets to evaluate in a game studio M&A

2.1. Intellectual property rights for video games

For game studios, the most valuable asset is often not the equipment or the office, but the intellectual property rights related to video games.

The content that needs to be reviewed includes source code, character design, images, sound, storyline, branding, game name, domain name, and other digital assets. Investors need to clearly determine whether the target company legally owns these assets.

If intellectual property rights are not clearly established or are subject to disputes, M&A transactions may face numerous risks after completion.

2.2. Rights regarding user data

Many game studios possess large amounts of player data collected during the development of their products.

When conducting M&A, the transfer or continued exploitation of user data needs to be carefully considered to ensure compliance with regulations on personal data protection and privacy.

This is one of the aspects that investors are increasingly paying attention to during the due diligence process of a target company.

2.3. Contracts with partners and publishers

Game studios are often involved in numerous contracts related to game publishing, product distribution, advertising, online payments, or content development collaborations.

Reviewing existing contracts helps investors accurately assess their rights, obligations, and potential limitations that may affect business operations after the transaction is completed.

3. What role does due diligence play in M&A deals involving game studios?

3.1. Identifying potential legal risks

Due diligence is the process of comprehensively reviewing the legal status of a target business before entering into a transaction.

Through this process, investors can identify issues related to ownership structure, financial obligations, existing disputes, breaches of contract, or other risks that could affect the value of the transaction.

3.2. Assessing the legality of business operations

For game studios, assessing the legality of their business operations is of particular importance.

Investors need to consider whether the business is operating its product in compliance with legal regulations, and whether there are any intellectual property infringements or disputes related to game content.

3.3. Basis for determining enterprise value

The results of the due diligence not only help identify risks but also serve as an important basis for the parties to determine the value of the enterprise and build a mechanism for dividing responsibilities in M&A contracts.

In many cases, legal issues discovered during the appraisal process can significantly alter the value of a transaction.

4. Common risks when acquiring or merging game studios

4.1. Disputes over ownership of source code and digital assets

Some game studios use collaborators, freelancers, or external partners to develop their products. If intellectual property transfer agreements are not fully implemented, the business may not fully own the source code or related assets.

This is a risk that could directly affect the right to exploit and commercialize the product after the transaction is completed.

4.2. Dependence on key personnel

In the gaming industry, a company's value is often tied to its highly skilled founding team, programmers, or designers.

If key personnel leave the company after an M&A transaction, the ability to maintain product quality and project development speed can be significantly affected.

4.3. Financial obligations that have not been fully disclosed.

The target business may have outstanding debts, tax obligations, payment obligations, or unresolved disputes.

If not detected and addressed during the due diligence phase, these obligations can become a burden on the transferee after the transaction is completed.

5. The role of lawyers in game studio M&A.

5.1. Advising on a suitable trading structure

Each M&A transaction has different objectives and characteristics. Lawyers will assist investors in choosing the appropriate transaction form, such as purchasing shares, acquiring equity stakes, purchasing assets, or carrying out a business merger.

Choosing the right trading structure helps optimize investment performance and minimize potential legal risks.

5.2. Conducting legal due diligence on the target enterprise.

Lawyers play a role in reviewing the legal records, contracts, intellectual property assets, compliance status, and disputes of the target business.

This is a crucial step that helps investors gain a comprehensive understanding of the business before making a final decision.

5.3. Drafting and negotiating M&A contracts

An M&A contract is a crucial document that determines the rights and obligations of the parties involved in the transaction.

Lawyers will assist in drafting clauses related to transfer pricing, payment terms, seller commitments, compensation mechanisms, and handling of post-transaction risks.

5.4. Assistance in completing legal procedures after the transaction.

After signing the contract, the parties still have to complete many procedures related to changes in business registration, asset transfer, updating intellectual property rights, and other legal obligations.

The involvement of lawyers helps ensure that the transfer process is carried out in accordance with regulations and minimizes the possibility of future disputes.

6. M&A of game studios requires thorough preparation from the outset.

M&A of game studios is a high-value transaction involving many specific legal aspects of the video game industry. The success of a deal depends not only on business potential but also on accurately assessing legal risks, intellectual property assets, and the obligations of the target company.

Conducting thorough due diligence, establishing a suitable transaction structure, and having legal counsel from the outset will help investors protect their interests and increase the chances of success for a game studio acquisition or merger.

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(Author: Doan Ngoc Khanh; Translator: Nguyen Phuong Anh; Date: June 16, 2026)

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