All over the world right now tens of thousands of bankers and other financial services workers are being given a bin bag to put their personal possessions in as their employer dispenses with their services. Many would say they brought it on themselves with reckless excesses when regulation was light and money was easy. Never mind the cause, what is for certain is that the banking industry is expecting a lean time in the mergers and acquisitions (M&A) business.

But the bankers are going to find that one industry is still going to be M&A crazy. And it is the video game industry. Here’s why:

• Unlike every other industry gaming is booming. And will continue to boom through the recession. Just as the movie industry did during the great depression. This is because gaming is brilliant entertainment and is very good value for money. Also the industry emerged from serving a niche to being truly mass market only recently, so has a massively expanded demographic to serve.
• In traditional, cardboard and plastic, game publishing there are massive competitive advantages of size. Small and medium sized publishers are not competing on the same playing field. So there is a strong economic and commercial imperative to upsize.
• Traditional publishing, books, newspapers, magazines, videos, television, music etc is in big trouble for a variety of reasons, all of which revolve around the interweb. The massive global companies that run much of this publishing need to be in games just to survive. So there is a goldrush of the big global publishing brands to buy gaming assets.
• The gaming industry grew from zero only recently so the quality of the legacy management is often very patchy. Many companies badly underperform and there are storehouses of fantastic intellectual property (IP) that are being under utilised. These are valuable assets being wasted that would, in the right hands, generate turnover and profit.
• Finance. Many game companies are woefully under financed. And this (like film) is a risk business where many products fail. The situation has been made worse by the current growth in the market, which can lead to overtrading and also by the banking malaise.
• With the current stock market panic the publicly quoted game companies are now very cheap to buy.

So lets look at what is happening out there in the real world.

Sumner Redstone has sold Midway for just $100, 000. Huge losses and accumulated debt has made this inevitable.