The marketing company AppLovin has a fourth gaming deal since the beginning of 2020. Following investments in Redemption Games, Clipwire Games and Geewa, she announced the acquisition of Machine Zone, known for the strategy game Game of War.
Game of War Advertising Creative with Kate UptonTransaction Details
The conditions are unknown. In 2014, Machine Zone was estimated at $3 billion. Now this figure is most likely significantly less. The company’s games have not earned $ 50-60 million a month for a long time, as it was then.
The peak time for Machine Zone is 2016. Then the company earned up to $140 million a month. Her marketing expenses were also fabulous. For advertising creatives, she attracted top celebrities — including fashion model Kate Upton, singer Mariah Carey and Arnold Schwarzenegger.In 2017, the company’s gaming revenues declined sharply.
In 2018, Machine Zone decided to refocus on “other sources of profit”. 125 people responsible for marketing and traffic were fired. After that, the company’s games finally left the top positions. At the same time, they still earn well. The total revenue of the three leading games of the company for April is $10 million.April revenue of leading Machine Zone games (App Magic)
Why AppLovin bought Machine Zone
The deal has three aspects.
The first is technological. The press release mentions that the Machine Zone software developments will become an important part of the AppLovin product ecosystem. Machine Zone has developed and patented its own distributed data processing solution. It allows you to simultaneously place a multi-million audience in one virtual space and instantly process all their messages and interactions.
The second aspect concerns the ambitions of companies. AppLovin talks about the new deal as a significant progress towards the goal of “becoming the dominant mobile gaming company in the market.” Machine Zone became the seventh gaming company in the AppLovin portfolio. The latter, in addition to the internal Lion Studios, also has assets of PeopleFun, Belka Games, Clipwire Games, Firecraft Studios and Geewa.
The third aspect, which also explains the company’s M&A activity, is the desire to strengthen its position in the advertising market. The signed contract is another brick of the ongoing rivalry between AppLovin and ironSource for the promotion channel markets. As the investment manager writes Mail.Ru Games Ventures Sergey Evdokimov, if ironSource mainly relies on organic growth, developing its own mediation platform, then AppLovin “scales the business through M&A acquisitions.”
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By the way, as part of the merger, AppLovin’s head office is moving to the Machine Zone office in Palo Alto, this is the historical center of Silicon Valley, where Apple, Facebook, Tesla Motors and other IT giants are also headquartered.
Also on the topic:
- AppLovin has invested money in a mobile studio of Cookie Jam developersironSource, Unity Ads and AppLovin are responsible for 35% of the mobile games advertising market
- Two more studios have attracted strategic investments from AppLovin
- Is there any news?
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