This morning, video-game software developer Midway Games (NYSE:MWY) announced a deal to acquire development studio Inevitable Entertainment, the Austin, Texas-based company it signed to prepare the game "Area 51," which is based on the sort of doings one might expect to go on at the government's legendary air base. (Too bad it wasn't for a remake of the "Area 88" game adaptation of the excellent Japanese comic book... )

Midway agreed to pay Inevitable Entertainment 218,421 shares of its common stock in exchange for the company -- about $2.1 million based on Friday's closing prices. Investors who noted Midway's press release, meanwhile, will recognize three themes common to industry operations:

  • In the video-game software business, "mini-mergers" are far more common than megamergers, where large, publicly traded entities such as Electronic Arts (NASDAQ:ERTS) and Activision (NASDAQ:ATVI) shell out shares or cash to take out their publicly traded competition.

    Acquisitions in this business, as with many businesses where technology and creativity are involved, are generally about technology and titles -- it can often be far easier (and cost-effective) to build yourself or buy carefully rather than absorb large organizations and their failures.
  • With that in mind, a key to success in the video game business -- as much about creativity as any music or motion picture operation -- is people. That's why you'll often see something quite unusual in the industry's merger announcements: the names of actual employees.

    Case in point: Midway notes that "a total of 152,824 restricted shares of Midway common stock were issued to key Inevitable employees as retention incentives." The restricted shares become available over three years, a powerful carrot pointed directly at Daryl Allison, Steve Broumley, Russell Byrd, Pete Franco, Craig Galley, Matt Green, Cyrus Lum, Aaron Smischney, Jim Stiefelmaier, Michael Traub, and Andy Thyssen.

    Considering that most merger releases name the acquired CEO (if anyone), you can see the stock Midway puts in Inevitable's people.
  • Finally, if you're running a small video game studio, then it's increasingly likely that as power and wealth in this business is concentrated in a few large companies, then this (or something like it) will be your exit strategy. The money that comes with going public comes with outsized expectations of expansion and growth -- something you might not be ready for. These larger companies, often your current or past partners, are far more likely to love you for what you are.

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Fool contributor Dave Marino-Nachison doesn't own any of the companies in this article.