AppLovin is selling all its game studios for $900 million
AppLovin has decided to focus on its advertising business. The company announced the sale of its entire gaming division.
Game of War by Machine Zone
The announcement was made by CEO Adam Foroughi during the presentation of the company's 2024 financial report. He revealed that the buyer is a company specializing in game development, though he did not disclose its name.
"Seven years ago, we began acquiring game studios to train our first machine learning models. This became an invaluable step in creating the artificial intelligence that is the backbone of our AXON platform. However, deep down, we were never game developers," stated Foroughi.
The deal is expected to close next quarter, valued at $900 million. Of this, AppLovin will receive $500 million in cash, with the remainder in shares.
Currently, AppLovin owns ten game studios, including Machine Zone, Belka Games, PeopleFun, Athena Studio, and Magic Tavern.
In its annual financial report, AppLovin reported earnings of $4.7 billion in 2024, a 43% increase. Almost all revenue growth was attributed to the advertising division rather than gaming. Games brought the company $1.48 billion (a 3% increase), whereas the advertising business generated $3.22 billion (a 75% increase). AppLovin's net profit skyrocketed by 343% to $1.57 billion.
Notably, following the report's release, AppLovin's shares rose by 29% to $490.75 per share. Over the past 12 months, their value has increased by 730%.
AppLovin's stock price dynamics over the past 12 months