Interview

Drake Star Partners' Michael Metzger on strong consolidation and more interesting IPOs

Pocket Gamer Connects Digital #6 kicks off on April 19th

Drake Star Partners' Michael Metzger on strong consolidation and more interesting IPOs

Pocket Gamer Connects Digital #6 takes place from April 19th to 23rd, so to give you a taste of what to expect, we'll bring you interviews with some of our esteemed speakers at the show.

The conference spans five days and will feature a broad selection of tracks, talks and speakers, as well as various fringe events and the return of our meeting system.

For more details on the event and to book a ticket, head to the website.

For today's spotlight, we spoke with Drake Star Partners partner Michael Metzger, a global media and tech investment bank that provides M&A and financing advisory services to media, internet and tech companies.

At PGC Digital #6, Metzger will host a presentation on 'Building a $1B Gaming Company: Going Public & Scaling via M&A'

PocketGamer.biz: Tell us a bit about your company?

Michael Metzger: Drake Star Partners is a global media and technology investment bank. We have almost 100 professionals in nine offices across the US and Europe, advising on the buy/sell-side of mergers and acquisitions and growth-stage financing deals for media and technology companies across the globe.

One of our focus areas is the digital media and gaming segment. Some recent deals we advised on include the sale of Echtra Games to Zynga, Slightly Mad Studios to Codemasters, Freepik to EQT and more.

What does your role entail?

I focus on the gaming segment and advise private studios or gaming tech companies on being acquired, large public gaming companies on acquiring mid-sized studios and private gaming companies on large growth financings.

We got to know all the buyers in the space over the years and understand what’s important to them and what they are looking for.

We help companies to position themselves in the best possible way for an M&A or financing transaction and manage the discussions with the various potential buyers or investors.

As with many digital media companies, it’s likely gaming companies will continue to offer more subscription services similar to Xbox Game Pass and Apple Arcade.
Michael Metzger

We also publish a monthly newsletter with all the latest gaming M&A, financing, IPO (initial public offering) and SPAC (special purpose acquisition company) stats.

Please connect with me on LinkedIn if you would like to see the reports.

Why did you want to work in the games industry?

First of all, I love playing games. Living in Los Angeles, gaming has always been an important industry here.

Many of the large gaming companies are here, such as Activision, Blizzard, Scopely, Jam City and many of the large Asian publishers have their western headquarters here.

What are your thoughts on the industry in the last 12 months?

The industry has been one of the few success stories in the past twelve months as participation and engagement trends spiked during COVID lockdowns fueling growth in revenue and profitability. Although that initial spike has slowed, consumers are still engaging with gaming more than pre-pandemic levels.

This outsized performance has kept M&A and financings at healthy growth levels over the past twelve months. There has also been a rise in massive billion-dollar M&A deals during this time, including Microsoft’s $7.5 billion acquisition of Zenimax. While financings were initially down when lockdowns begin, they have recovered well and now are growing again at record levels.

The public markets have also heated up with many significant IPOs and the emergence of SPACS with a strong interest in gaming.

There has been an uptick in gaming IPOs including Unity and Playtika raising more than $1 billion in each of their respective offerings. SPACs have also been very active in the space with multiple billion-dollar deals (Skillz, Playstudios, Nexters etcetera.).

What major trends do you predict in the next 12 months?

I expect continued strong consolidation, more interesting IPOs and further growth in subscription services. I believe the continued consolidation will likely include more private equity deals as we saw with the Carlyle Group’s recent acquisition of Jagex.

IPOs have already seen an uptick in the first quarter of 2021 and with the current pipeline, this trend will likely continue. As with many digital media companies, it’s likely gaming companies will continue to offer more subscription services similar to Xbox Game Pass and Apple Arcade.

Which part of the Connects event are you most looking forward to and why?

I enjoy most listening to the talks of the thought leaders in the space. I am also excited about my discussion with EG7 CEO Robin Flodin, about their journey from going public to building a company valued at over $1 billion via acquisitions.

Want more?

The full conference schedule is now live on the website. In the meantime, you can also check out our other track rundowns and coverage of previous Pocket Gamer Connects conferences ahead of the event itself.

Register for Pocket Gamer Connects Digital #6 today!


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