A naukri.com initiative
Medium
2M
275
Image Credit: Medium
The End of AppLovin’s Gaming Bet — And Why It Makes Perfect Sense
- AppLovin, a company known for mobile gaming, is now stepping away from gaming to focus on advertising, a more profitable sector.
- The decision to exit gaming was based on the significantly higher revenue, margins, and profitability seen in advertising compared to gaming.
- AppLovin's $900 million deal to sell off its gaming business signifies the completion of a long-term transformation towards ad tech.
- The company's shift from gaming to advertising was driven by the stark contrast in growth rates and profitability between the two sectors.
- AppLovin's revenue composition shifted from 86% in gaming in 2020 to 68% in advertising by 2024, with advertising delivering 90% of total profits.
- The decision to sell the gaming division was also influenced by the impact of Apple's IDFA changes, resulting in increased user acquisition costs.
- AppLovin's move to prioritize ad tech over gaming was reinforced by the significantly higher EBITDA margins in advertising compared to gaming.
- The sale of the gaming division for $900 million allows AppLovin to focus entirely on the more lucrative ad tech business.
- The company's strategic focus on ad tech positions AppLovin as a major player in mobile advertising, competing with industry giants like Google and Meta.
- AppLovin's transition to a full-fledged ad tech company reflects a strategic evolution towards a higher-margin and scalable business model.
Read Full Article
16 Likes
For uninterrupted reading, download the app