San Francisco and London-based Pollen VC shared a new study that revealed a whopping 85% of acquired studios worked on publishing their games on their own instead of collaborating with a publisher. The data, which covers all M&A deals between March 2021 and February 2022, showed while 15% of the studios were the publishers of other third-party games, none of them worked with a mobile game publisher.
Related: GameRefinery shares Mobile Game Market Review for September
Working with a publisher used to have significant benefits, especially in marketing, funding, and ads. It looks like mobile game developers find it unnecessary to share royalties and lose rights to their games after Apple’s new privacy protocols.
Pollen VC states that self-publishing has become increasingly popular, as mobile game publishers do not offer “price/performance” deals that would benefit developers. The company identifies a standard agreement to be 60% in favor of the publisher revenue-wise.
Vice President of Growth & Analytics at Pollen VC, Stanislav Rudoi, has commented on the situation, stating that the dynamics have changed post-IDFA:
“The post-IDFA environment has accelerated the trend we’ve seen over the years – shifting from a distribution-centric to an original IP-centric M&A focus. Strong player affinity towards a particular studio’s games makes a self-published studio acquisition more valuable both in terms of IP itself and player base.”
Martin Macmillan, CEO of the venture capital company, shared thoughts as well:
“Gaming studios are increasingly finding the economics of mobile game VC publishing deals unpalatable. Our analysis of the M&A data makes it clear that studios that have the ambition to ultimately be acquired need to either develop skills in-house to self-publish or work with third parties to buy in components required for them to publish their own games in their own name successfully.”
The company mentions that deals above $1 billion have been excluded from the research in order to create more accurate data. As a VC investor, the firm states that this study cements self-publishing is crucial for a successful M&A strategy.
