Ex-PlayStation chief's SPAC is looking to buy a game company

Former U.S. PlayStation chief Jack Tretton has his eyes on purchasing a game company that goes for $1 billion to $2 billion, he tells Axios.

Driving the news: Tretton is CEO of PowerUp Acquisition, a special purpose acquisition company (SPAC) chaired by former Vivendi games boss Bruce Hack that raised more than $250 million in February.

• PowerUp had initially planned an 18-month timeframe to make a purchase but has shortened that by three months.
• “The fact that we were willing to go to 15 months and sweeten the pot for investors, I think was an indication that we felt very confident that there were a number of tremendous targets out there that we could land,” he says.

Tretton is partial to purchasing a publisher or traditional developer, given his own background, but notes his partners in the company have their own favorite areas.

• PowerUp president Gabriel Schillinger, who Tretton credits with cooking up the SPAC, for example, has more experience with blockchain and crypto.
• What they’re not targeting: turnarounds. “We're not looking for a company that's in disarray, that is on the way out of business and is a reclamation project.”

The big picture: The gaming sector has been rife with mergers and acquisitions over the past year, supercharging in early 2022 with Take-Two and Microsoft’s multibillion-dollar bids for Zynga and Activision Blizzard, respectively.

• SPACs haven’t scored a big pickup in gaming yet, though Tretton’s group and one involving former Nintendo of America president Reggie Fils-Aime are now in the mix.

Between the lines: Tretton sells himself as an exec with a “special relationship” with gamers, given his 19-year run atop PlayStation’s U.S. team, which ended in 2014.

• Post Sony, he’s run a range of consultancies and gaming funds, partnering with indies and sharing publishing expertise.
• He says he’s been excited by the constant change in the gaming industry.

• But he said he has not paid much attention to Sony itself, declining to comment on PlayStation’s current business and saying he was unaware of a recent lawsuit filed against PlayStation focused on misconduct allegations that mostly dated well after his tenure.

Lessons learned: Of his time at Sony overseeing purchases of top studios like Naughty Dog, he said he realized that acquiring companies necessitates buy-in beyond the management level.

• You don’t want workers at the acquired company to be “demotivated going into the merger because the senior management has cashed out and they all went and bought Ferraris,” he said.

What’s next: Tretton, 60, says this SPAC could lead to another: “It's quite natural that we would potentially do it again and help another company,” he says.

• He’s not planning retirement. “If there's a day I wake up and say, 'I don't know what's going on in the video game industry and none of it interests me,' that would be the day I'd say I need to find other hobbies.”

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