What to Make of Unity's Love Triangle + The Numbers That Matter

A few weeks ago, Unity and ad network ironSource announced they're merging. I looked at the number of apps and games using both technologies and concluded ironSource would gain much more than Unity in a merger and questioned the merit of it.

Well, this week, ironSource's chief rival AppLovin announced they want to buy Unity instead, at a price tag of $20 billion.

The thing is, Unity's market cap as of right now is right under $17 billion.

Things are finally starting to make sense!

Unity is much more valuable than what it's trading now, in my opinion at least, and don't take this as investment advice because it isn't. A merger means it isn't, but a purchaser who's willing to pay more is.

Does it make sense for AppLovin to buy Unity?

From a purely competitive standpoint, one that isn't even looking at numbers, the answer is absolutely!. If Unity merges with ironSource, as I showed a few weeks ago, they'd have a huge ad network that will be able to offer advertisers endless opportunities. That would make AppLovin far less interesting.

But just how big is AppLovin?

Again, I'm using our SDK Intelligence, in which we scan free apps and games and extract all the technologies they use.

For starters, according to our data, AppLovin is used by nearly twice as many apps that are currently available for downloads in the App Store and Google Play.

With roughly 114 thousand apps and games in its network, AppLovin is one of the strongest ad networks around right now. And unlike Unity and ironSource, AppLovin is used in many apps and not just games, making it a much more diverse opportunity for advertisers.

To answer the question, AppLovin is pretty big!

And that's also, in my opinion, why it's trying to acquire Unity.

ironSource is a weaker competitor on its own, but with Unity under its wing, ironSource will easily overtake AppLovin. I ran the numbers, and f the two do merge, the UnitySource network would include more than a quarter of a million apps and games.

AppLovin can't have that, and if I'm Unity, I may be rethinking my strategy right now.

What would you do?