AppLovin divests all its Game Studios for $900 million.
Another day, another AppLovin update!
As reported by mobilegamer.biz, AppLovin is offloading its ten-game studio portfolio for $900 million as it pivots to focus entirely on Ad Tech.
Check out: AppLovin Empire: Monopoly in Mobile Gaming?
AppLovin’s decision to sell its gaming studios signals a major shift in the mobile gaming industry. While the company has not revealed the buyer, the move highlights the growing dominance of ad monetization over traditional game publishing. We’ve seen similar transitions before, such as [another company’s example]. Given these trends, it raises the question: will more gaming giants follow suit?
This means Machine Zone, PeopleFun, Magic Tavern, Lion Studios, Belka, Athena, Clipwire, Leyi, Zenlife, and Zero Gravity will soon be under new ownership. However, AppLovin has not disclosed the buyer.
More: AppLovin’s Gaming Portfolio
CEO and co-founder Adam Foroughi announced the decision during the company’s Q4 earnings call, which followed another strong financial performance. CFO Matt Stumpf confirmed that AppLovin has signed a $900 million agreement to sell its gaming division, consisting of $500 million in cash and the remainder in equity. The transaction is expected to close in the upcoming quarter.
Addressing the sale, Foroughi reassured the affected teams, stating: “You’ll soon be part of a company dedicated to game development. While this transition is bittersweet, we’re excited for your future and deeply grateful for your contributions to our success.”
The rationale behind the divestment is clear—AppLovin’s revenue and profit growth have been driven entirely by its ad business. While its app revenue remained mostly flat, advertising revenue surged.
AppLovin’s shares jump 30% on strong Q4 earnings:
Q4 Performance (YoY Changes):
- Total Revenue: $1.4 billion (+44%)
- Adjusted EBITDA: $848 million (+78%)
- Advertising Revenue: $1 billion (+73%)
- Apps Revenue: $373 million (-1%)
Full-Year Performance (YoY Changes):
- Total Revenue: $4.7 billion (+43%)
- Adjusted EBITDA: $2.7 billion (+81%)
- Advertising Revenue: $3.2 billion (+75%)
- Apps Revenue: $1.5 billion (+3%)
Foroughi also highlighted what he called his “favorite metric” — profit per employee.
“In Q4, our advertising business generated approximately $3 million in run-rate adjusted EBITDA per employee, and we expect this figure to rise as we refine our operations and scale.”
AppLovin had already made cuts to its gaming division, laying off 120 employees at Machine Zone in October 2024. Its flagship titles, Game of War and Mobile Strike, have seen revenue declines for years, and the company recently shut down Final Fantasy XV: War for Eos.
Source: MobileGamer.biz & Investing.com
