Jack Tretton spent 28 years in gaming, most of it leading Sony’s PlayStation business. He stepped down in 2014 as the PlayStation 4 was on its way to winning the console wars. But Jack is back.
Tretton announced today he is starting a venture capital fund, Interactive Gaming Ventures, to invest money in promising indie game developers. The fund will invest $1 million to $5 million per investment in two to three indies per year for the next seven years, Tretton said in an interview with GamesBeat.
“I really longed for an opportunity to apply what I learned on the corporate side and go independent and pick my partners and have organic relationships,” said Tretton.
After 28 years on the corporate side, Tretton felt he saw both positives of being able to get things done with a lot of resources, and he saw negatives of being “a good corporate employee subscribing to every belief your company subscribes to whether you believe it or not.” So he left in 2014 to start his own consulting firm. He helped startups raise money or sell their studios and gave management advice.
“I developed a passion for working with young development teams with a lot of talent but didn’t have a lot of years in the industry,” Tretton said. “The great thing about the digital world and the indie space is you can go direct to the consumer. If you build a game with good gameplay and consumer appeal, you can really have success. I found the universal challenge was raising money.”
Interactive Gaming Ventures will provide experienced indie developers with much-needed investment capital and management strategy to help them achieve greater scale and success. It will focus on PC games on Steam first, but could also move into console or mobile titles. Tretton doesn’t foresee investing in big Triple-A games, as made by giants such as Electronic Arts, Activision Blizzard, or Ubisoft.
In his time as a consultant, Tretton helped Blue Isle Studios in Toronto while working with OceanIQ Capital. That helped the company get games like Citadel going, and it led him to try to raise a fund from private equity companies and other large investors. But Tretton said that he found that most investors shied away from the $116 billion game industry because they didn’t have enough passion for it or instincts for good games.
So Tretton and his partner Doug Kennedy, formerly of Nvidia and now CEO at Studio Wildcard, wound up raising a smaller fund that will focus on two to three investments a year. Tretton worked with Kennedy early on to get Ark Survival Evolved off the ground. The game grew to a big hit with 13 million units sold, including 1.1 million units at physical retail since August 2017.
Over the seven-year life of the fund, the company might invest $35 million to $100 million, mostly in small chunks no larger than $5 million.
“It’s more about how many investments we find are viable,” Tretton said.
He said that many of the big game companies can’t take as many risks anymore.
“The great thing about the indie space is that they have a blank canvas,” he said. “They’re gamers. They’re not limited by corporate oversight. They are limited only by imagination.”
As for leaving Sony, Tretton said he originally thought he might stay three years. That eventually turned into 19 years.
“Staying for four generations of hardware is certainly something I was proud of,” Tretton said. “After PS4, I got to a point of what more is there left for me to do. I love being a supporter of Sony from the outside. When I was there, I had to be all Sony all the time. Now I enjoy working with the Microsoft team or Nintendo.”
Outside of Sony, Tretton has had a chance to meet with Amazon CEO Jeff Bezos and meet with leaders at Google and Apple. He has also become a fan of the Nintendo Switch and open world survival games like Ark Survival Evolved.
“I saw potential but didn’t see the passion and commitment and resolve that you need to go all in with games,” Tretton said. “With Microsoft they had growing pains, but I never questioned their commitment to games. There is never a question in my mind that Apple, Google, and Amazon could be phenomenally successful if they were committed to it. Gaming culture is very unique. If they try to run it like other parts of their business, they could struggle. I did hear about [former Sony executive] Phil [Harrison’s] appointment [at Google] and wish him a lot of luck.”