Unity will not merge with AppLovin. The company will buy out its competitor ironSource to control the production, publication, execution and monetization of video games. An equally colossal plan B that actually featured as the original plan for Unity. It was only after the start of their negotiations that AppLovin came to make its merger proposal earlier this month, for the sum of 17.5 billion dollars.
“Board of directors (from Unity editor’s note) continues to believe that the transaction with ironSource is compelling. It will provide an opportunity to drive long-term value through the creation of a single end-to-end platform that enables creators to develop, publish, run, monetize and develop live games and 3D content in real time. transparently”said John Riccitiello, CEO of Unity.
A small step rather than a big one
The company has contributed to the development of games like Call of Duty, Animal Crossing and Pokemon Go. Now she is looking for a solution for her income. Its activities are running at full speed (in video games, but also in the supply of tools for automotive brands) but Unity is losing money. The equivalent of $177 million last quarter. A very frowned upon indicator at a time when venture capital and money loans are no longer so easy to find. Blame it on the rise in interest rates.
With ironSpace, there will be no talk of a merger and the scale is smaller than that of AppLovin, leader in its sector. But at least Unity will keep full control over its business. And about his identity. AppLovin and ironSpace are companies specializing in the monetization of video games, a skill that Unity now wants to have internally to weigh more heavily with publishers.
Recently, Unity has already shelled out money for the acquisition. At the beginning of January, it acquired Ziva Dynamics (amount not disclosed), in order to extend its tools for game creation.
Prospects are also lower. As a result, investors expect a billion dollar EBITDA by 2024 with the takeover of ironSpace by Unity. It was estimated to be worth $3 billion under a possible merger with AppLovin. The billions saved in the transaction will surely allow Unity to continue investing in the growth of the Israeli company ironSpace. Objective: to increase its valuation today estimated at 4.4 billion dollars.