The week was thick with gaming news, so some folks may not have noticed that Playtika, the Tel Aviv-based social casino games company, is considering going public.

Caixin Global reported that Playtika is looking to go public because Giant Network Group has failed repeatedly in its attempts to acquire the company over the past three years from current owner Alpha Frontier. Giant chairman Yuzhu Shi created Alpha Frontier as an investment consortium to buy Playtika for $4.4 billion. Shi intended for Giant to then take over Playtika, but each attempt has failed, with the price going up each time.

Giant recently said it would abandon the acquisition and noted Playtika’s intention to go public. This news is a bit of an earthquake in the gaming business, which sometimes seems like it is at the mercy of much larger forces. This whole episode reminded me how many things can affect a game company beyond the quality of its games.

Chinese forces

Above: Playtika logo

Image Credit: Dean Takahashi

Playtika itself has bulked up, acquiring Berlin-based mobile game studio Wooga and Austria’ Supertreat. We also got the scoop recently on how Playtika bought Finland’s Seriously, maker of Best Fiends, for a reported $275 million. These deals suggest that Playtika has been in a rush to get bigger, and they would make sense if the company was seriously considering an IPO.

One of the mysteries is whether the Chinese regulators are stepping into the transaction. The regulators aren’t fond of companies making acquisitions outside of their areas of expertise or adding too much debt. Rumors suggest they have taken such actions in the past, like when FunPlus sold a lot of its original mobile game assets to a non-game company.

In this Playtika case, the transaction may have been affected by the interests of the Chinese government. And as we all know, the U.S. and China aren’t on the best terms now because of President Donald Trump’s efforts to impose tariffs on Chinese goods. As you can see, so many forces are at work here that it’s hard to know what caused what.

I know that other companies will be affected by what the regulators are doing in China. We saw last year, for instance, the government shut down new game launches as it figured out which bureaucracy should have jurisdiction over game approvals. China’s government can act swiftly with regulatory changes on matters such as game addiction, and game companies have to comply.

We saw that Blizzard Entertainment recently cracked down on an esports player who voiced on a broadcast that Hong Kong should be liberated. The company banned him, making many Westerners accuse Blizzard of caving in to Chinese government interests, as Blizzard operates in China and can’t afford to be banned there. In this case, it so happened that a single esports player threw Blizzard’s fortunes up in the air.

Hollywood forces

A Jedi and his droid.

Above: A Jedi and his droid.

Image Credit: Respawn

We saw a totally different set of events affect the fate of game companies in Hollywood. When Disney bought Lucasfilm for $4 billion, it jettisoned the game division, LucasArts, shutting down George Lucas’ game company and contracting instead with Electronic Arts, which went on to make licensed games like Star Wars: Battlefront, Battlefront II, and Star Wars Jedi: Fallen Order.

Disney CEO Bob Iger was never fond of games, and he decided that Disney wasn’t good at making them. He shuttered the Disney Infinity product line, which led to the collapse of Avalanche Studios in Utah. And then Iger decided that licensing was the way to go altogether, so he shut or sold off mobile gaming enterprises like Club Penguin. Disney turned to licensing, such as getting Square Enix’s Crystal Dynamics to make The Avengers game.

Chris Heatherly, who ran the Disney mobile games, fled to NBCUniversal and spun up a game publishing operation. It was just getting going with more than 50 publishing employees, but then NBCUniversal decided to shut it down in favor of licensing games. Universal, it seemed, decided it was better to circle the wagons around the core business and let others make its games.

Iger’s distaste for games and fondness for making a million Star Wars films had other consequences. Disney bought Fox’s entertainment business, including the new FoxNext Games, which is making titles such as Avatar and Marvel Strike Force. Now the word is that FoxNext Games is up for sale, as Disney doesn’t want to give it time to hit its big plan for making in-house games.

You could only look elsewhere in Hollywood to see how extreme and wrong-headed the licensing-only plan is. Warner Bros. Interactive Entertainment has built or acquired a dozen studios over the past decade, resulting in some tremendous high-quality games like Mortal Kombat 11 and Shadow of Mordor. But even Warner Bros. may not control its fate, as its new owner AT&T might very well be tempted to sell it off in order to pay down some debt.

Financial forces

Ghost Recon: Breakpoint has caused Ubisoft to reconsider its entire release schedule.

Above: Ghost Recon: Breakpoint has caused Ubisoft to reconsider its entire release schedule.

Image Credit: Ubisoft

Sometimes it doesn’t matter how big your company is. You could try to take the company public, but then you could be at the mercy of shareholders. These shareholders always give Take-Two a hard time for not churning out its games fast enough. CEO Strauss Zelnick has fended off any such criticism by letting his creative teams do their work with enough capital and time to get it right. That’s how the company has come up with big hits like Grand Theft Auto V, NBA 2K, Red Dead Redemption 2, and Borderlands 3.

But we saw how even Ubisoft was barely able to control its future. Vivendi saw an opportunity to buy a lot of Ubisoft stock and position itself to acquire the company in a hostile move. Ubisoft had to walk the line, making sure it produced outstanding games to produce the revenues to keep its stock price high. If it missed, the stock would fall and Vivendi could swoop in and buy more stock at a cheap price.

Eventually, China’s Tencent came to the rescue and bought the Vivendi shares in Ubisoft. That produced a nice profit for Vivendi. While no one was rooting for Vivendi here, you can’t argue that its strategy of engaging in a hostile takeover attempt paid off handsomely. In this particular case, if the U.S. had pressured China to decouple itself from Western investments, nobody would have been left to rescue Ubisoft.

What’s a game company to do?

Aaron Loeb is president of FoxNext Studios.

Above: Aaron Loeb is president of FoxNext Studios.

Image Credit: Dean Takahashi

You could say that this means that game companies themselves should band together and become giant companies with a lot of financial might, so they can avoid the slings and arrows of outrageous fortune. This week gave us a few more reminders that game creators operate in a climate of uncertainty. When one of these forces collides with a game business, sometimes the result is the loss of dozens or hundreds of jobs, the shuttering of a city’s only major game studio, or other things that affect a lot of lives. What is simply amazing is that game developers continue to turn out amazing titles, even though they aren’t in control.

But we can see a lesson here that applies all the way across the board, from giant multibillion-dollar companies like Playtika all the way down to the one-person indie game creator. As much as you can, you should control your own fate.

And it reminds me of the words of Aaron Loeb, president of FoxNext Studios, at a recent conference. Speaking of overseers or executives in charge of creative people, he said, “Your fear is not helpful.” Game companies that create an environment of stability could become a beacon for good talent.

Indeed, creative people do their best in a climate of stability, as Probably Monsters CEO Harold Ryan told me recently. For game developers, I suppose this means you should seek out a company that allows creativity to thrive, is strong enough to provide financial stability without rushing games out, has confidence in its creators, and operates with a minimum of fear.