Why gaming giant Unity dropped billions on an acquisition

A boom in gaming acquisitions signals how much the industry has grown.

The biggest trend in gaming has nothing to do with actual gameplay.

Already, 2022 has seen the most money spent on mergers and acquisitions in the history of gaming. In the first half of the year:

  • Take-Two Interactive acquired Zynga for $12.7B.
  • Sony acquired Bungie for $3.6B.
  • Microsoft moved to acquire Activision Blizzard for $68.7B, which, if approved, would be the biggest gaming acquisition of all time.

Last week, another deal was added to the mix — Unity confirmed a $4.4B merger with ironSource.

Unity is one of the world’s largest gaming engines. Paired with ironSource, which monetizes apps through ads and transactions, the combined entity could offer an end-to-end platform to build and monetize like never before.

But there’s another reason for the move

Analysts speculate shareholders are desperate for newfound profits, given Unity’s stock is down ~70% year-to-date.

  • Importantly, ironSource is profitable, and on track to grow revenue by 36%+ in 2022. Unity believes the combined entity will reach a $1B run rate by the end of 2024.

Unity’s move suggests gaming’s latest trend won’t slow down any time soon.

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