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Video game industry veteran Mike Ryder discusses his decision to become an M&A Advisor and to support other entrepreneurs in his industry.
In the early 90s, I co-founded a game studio to leverage the emerging real-time 3D graphics capability of the Sony PlayStation. Our new studio subsequently created successful launch titles for the PS1, including Twisted Metal and WarHawk. This entrepreneurial leap of faith led to a thirty-year career developing and operating games. Recently, I joined Alexander Hutton as a Strategic Advisor to serve clients in the video game industry. In this role, I provide advice and guidance to companies that are considering M&A or recapitalization opportunities. As someone who has spent my career in operational and executive roles, I thought deeply about this next step before accepting the opportunity. Ultimately, I was led by my desire to help other video game entrepreneurs find success through the M&A process.
Experiencing the acquisition of SingleTrac, the Company I co-founded, and participating in buy-side acquisitions in various roles during my career allowed me to observe the costs and benefits of these transactions. I increasingly felt that the process was overly focused on the transaction itself: the dollars and the assets and the immediate organizational impacts. In some cases, these transactions resulted in very positive long-term benefits and upside for all stakeholders, but in many other cases, the result was ultimately disappointing to one or more stakeholders. By stakeholders, I refer not only to the shareholders of the acquiring and target companies, but also to the employees, the game players and the community surrounding the affected games. Some companies may be well served during an M&A process by their existing Advisors and Board members....but it seems clear that there would be a significant benefit for many others to gain the support and advice of qualified M&A advisors who have previously navigated the process.
James Thompson has been a good friend of mine for more than 20 years, and he is a Managing Director of Alexander Hutton, a middle-market investment bank based in Seattle. James has been leading an initiative to bring on Strategic Advisors, who provide operational perspective and experience in specific industries in order to offer a more comprehensive advisory capability to Alexander Hutton’s M&A clients. These Strategic Advisors can help companies consider not just the financial terms of the transaction, but all facets of how an M&A event may affect the stakeholders over time. By taking time to identify the goals and aspirations of the stakeholders, we can ensure that the process addresses all of them. I believe that by thinking broadly about the long-term ramifications, the quality of the deal will be improved as the opportunity is maximized to serve the interests and priorities of all parties.
When James broached the idea of becoming a Strategic Advisor at Alexander Hutton for the game industry, I immediately saw the opportunity to leverage my experiences in the industry over the past thirty years. When I co-founded and ultimately sold SingleTrac, we (the leadership team) were new to the M&A process. While we made a number of very insightful and bold decisions that led to a high level of success in the short term, we also made a number of decisions throughout the process that we would have loved to redo. We learned the hard way, as many entrepreneurs do, and we would have benefitted enormously if we had gained the strategic perspective of industry veterans who had navigated the process before.
In future articles, I intend to talk more about the challenges and driving factors inherent in an acquisition, from both the publishing and development perspectives. Some of these articles may include topics such as the importance of culture fit in successful M&A initiatives, how to prepare a game studio for potential acquisition, and a discussion of M&A trends in the industry.
I look forward to hearing from others in my network about these topics and learning more from a variety of experiences.
If you are interested in learning more, contact Mike Ryder at mryder@alexanderhutton.com.