Former PlayStation chief’s SPAC seeks to buy games company
Former US PlayStation chief Jack Tretton is considering buying a games company that costs between $1 billion and $2 billion, he told Axios.
Driving the news: Tretton is CEO of PowerUp Acquisition, a special purpose acquisition company (SPAC) chaired by former Vivendi games boss Bruce Hack, which raised over $250 million in February.
- PowerUp had originally given 18 months to make a purchase, but shortened it by three months.
- “The fact that we were willing to go out to 15 months and sweeten the pot for investors, I think, was an indication that we were very confident that there were a number of terrific targets we could achieve. “, he says.
Tretton is partial to buy a traditional publisher or developer, given his own experience, but notes that his partners in the business have their own areas of focus.
- PowerUp president Gabriel Schillinger, whom Tretton credits with preparing the SPAC, for example, has more experience with blockchain and cryptography.
- What they don’t target: reversals. “We’re not looking for a business that’s in disarray, that’s about to close, and that’s a rehabilitation project.”
The big picture: The gaming sector has been plagued by mergers and acquisitions over the past year, supercharging into early 2022 with Take-Two and Microsoft’s multi-billion dollar deals for Zynga and ActivisionBlizzardrespectively.
- SPACs have yet to score a big comeback in the game, although Tretton’s group and one involving former Nintendo of America president Reggie Fils-Aime is now on board.
Between the lines: Tretton markets himself as an executive with a ‘special relationship’ with gamers, given his 19 years atop PlayStation’s Team USA, which ended in 2014.
- After Sony, he ran a range of consulting firms and gaming funds, partnering with freelancers and sharing his publishing expertise.
- He says he’s been excited about the constant change in the gaming industry.
- But he said he hadn’t paid much attention to Sony itself, declining to comment on PlayStation’s current activities and saying he was unaware of a recent trial filed against PlayStation focused on allegations of misconduct that mostly dated well after his tenure.
Lessons learned: From his time at Sony overseeing purchases of major studios like Naughty Dog, he said he realized that acquiring companies required buy-in beyond the executive level.
- You don’t want workers at the acquired company to be “demotivated before the merger because management cashed in and they all went and bought Ferraris,” he said.
And after: Tretton, 60, says this SPAC could lead to another: “It’s only natural that we potentially do it again and help another company,” he says.
- He is not planning his retirement. “If there’s a day when I wake up and say, ‘I don’t know what’s going on in the video game industry and none of that interests me,’ that would be the day I say I need to find other hobbies.”
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