The games industry was dominated by news of the controversial Unity Runtime Fee in September, a plan to get developers spending indefinitely with each install of their games. The backlash was immense, ultimately leading to John Riccitiello’s departure after nine years as CEO.
While industry outsider Jim Whitehurst has officially taken the helm, demonstrating Unity’s ambitions as a platform beyond gaming, it remains true that the company is weakened by last month’s affair. And with weakness comes the inevitable rumbling of rumours.
Applovin: Round 2?
To many, now looks like the perfect opportunity for AppLovin to sweep back in with a new effort to purchase Unity; there were merger talks between the pair last year, but Unity ultimately opted for a merger with ironSource. Now, the company’s recent turmoil may have reopened this door for AppLovin to once more step in.
Should the mobile tech company be interested, shares in Unity have fallen 40% since Applovin first suggested a deal, making the purchase substantially more affordable today. And as the rumour goes, AppLovin’s CEO Adam Foroughi could even take over Unity now that Riccitiello’s out. After all, Whitehurst has been announced as interim CEO, not the permanent new spearhead.
City Bank weighed in with its view on the idea, stating: “The most likely scenario would be a mix of cash and stock given the pro forma firm’s lean balance sheet and premium multiple that Unity still commands over AppLovin.
“This was primarily driven by concerns regarding AppLovin’s competitive position if Unity and ironSource merged. Given AppLovin’s recent performance, those risks are, perhaps, less valid this time around.”
Unity merged with ironSource last year in hopes that the latter’s enhancements would yield major benefits for creators and businesses in regard to monetisation. These benefits for Unity were similar to those offered by Applovin, in a rivalry of sorts with ironSource, and after the recent revolt against Unity leading game devs are now looking to Applovin for support.
Adding to the antagonism, Applovin ultimately decided to raise its voice with the release of a free AI tool designed specifically to migrate game projects away from Unity. Applovin also wrote an open letter to Unity with a stark warning: “If you continue to go on the path you’re on, you’ll destroy the trust and credibility that you have spent years building and it’s going to tear our industry apart.”
