Acquisitions have always been a part of the video game business, but they’re reaching a fever pitch right now. Microsoft is set to acquire Activision Blizzard for nearly $70 billion, while Tencent has scooped up a number of game studios over the past year and change. Now, former PlayStation boss Jack Tretton is entering the game with a new company, PowerUp.
IGN spoke with Tretton about his new company and its intentions. PowerUp is a SPAC, a special purpose acquisition company. While most acquisitions are used to fully absorb companies — like how Microsoft owns Bethesda under the Xbox banner —SPACs work differently. They instead merge with a company to take them public as a combined force. “We want to have more of a mentorship role,” Tretton explains. “Maybe we take a board seat, but we’re not interested in joining the management team or taking the management team over.”
This makes SPACs like PowerUp especially enticing for indie studios, who often struggle to raise money from investors while retaining independence. Tretton is looking at bigger prizes too: he wants companies with a valuation between $1-2 billion. For comparison, his former employer Sony is looking to acquire Bungie for $3.6 billion.
Tretton is essentially looking for a “new Activision,” especially if (likely, when) the Xbox merger completes. “If Activision becomes part of Microsoft or Zynga becomes part of Take-Two, that creates room for a new Zynga or a new Activision to pop up,” he explains. “Maybe somebody who is a fraction of the size of Activision or Zynga becomes the next Activision or Zynga, and those guys are going to pull up smaller companies with them.” It’s a sound strategy, and one that sounds good for triple-A and indie studios alike.
