A new study by Pollen VC highlights the importance of self-publishing if a mobile game maker is hoping to make themselves an attractive acquisition prospect.

The data states that 85 percent of mobile games studios acquired in the last twelve months self-published their games, whilst no acquisitions were made of studios who utilised third-party publishers, and 15 percent acted as publishers for titles by other studios. However, this data excludes any acquisitions above $1 billion.

This data highlights an ongoing trend in the industry for game developers to shy away from traditional publishing models.
“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,” said Pollen VC vice president of growth and analytics Stanislav Rudoi. “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.”

The pitfalls of publishers

The report notes that, whilst the mobile gaming market has traditionally been dominated by a development studio/publisher relationship, “self-publishing has become the dominant business model for gaming studios over the last few years. Gaming studios have recognized that the economics demanded by mobile gaming publishers were disproportionate to the value-added – a typical revenue share being around 60/40 in favour of the publisher after accounting for all user acquisition costs.”

“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,” said Pollen VC Martin Macmillan.

In August, Pollen VC CEO Martin Macmillan wrote about how to hire a CFO for your mobile games studio.