Why Sensor Tower acquired rival AppMagic

Last week, mobile market intelligence firm Sensor Tower acquired its chief rival AppMagic for an undisclosed fee.

The deal comes two years after the company made the surprise purchase of Data.ai, previously the market leader in the space, and cements its dominance in the app intelligence arena where it offers estimates in areas such as app downloads, revenue and usage.

Terms of the deal

PocketGamer.biz can confirm that the AppMagic acquisition includes both the team and the platform. Speaking to PocketGamer.biz, Sensor Tower chief revenue officer Tom Cui says the “large majority” of the AppMagic team, which was just shy of 100 employees, will continue in their roles. A “very, very” small number of employees have been let go.

The plan for AppMagic is for it to remain as a standalone product focused primarily for small to medium-sized businesses.

“We’re not planning to sunset AppMagic, we’re not planning to turn it into an Enterprise product and raise prices,” says Cui. “We acquired it specifically to have that SMB option available.”

Following the deal, Cui says the AppMagic name is likely to stay - referring to the fact that other acquisitions like Pathmatics, Video Game Insights and Playliner have still retained their brands.

That strategy differs from the Data.ai deal, where the plan was to run the two platforms separately before building a unified product inside Sensor Tower.

There are also no plans to merge Sensor Tower’s and AppMagic’s data and methodologies. “That could change, but for now, there are no plans to merge them.”

Asked if the company is okay with having two sources of truth covering the same space coming from one company, Cui says that, in the near-term at least, Sensor Tower is fine with that experience.

Small-to-medium business focus

On exactly why Sensor Tower acquired AppMagic, Cui explains that since its Data.ai acquisition, the firm has built more complex datasets and entered other categories like web, PC and console, moving away from its previous “pure mobile app intelligence play”.

“Along that journey, we have gone more upstream into Enterprise, and candidly, we've done a bad job servicing the small business and indie developer community," says Cui.

“That's very different than 12 years ago when we first started as just an ASO product and almost every indie developer was using Sensor Tower. I would say prior to AppMagic, very few small business and indie developers were using Sensor Tower. We were really servicing the Fortune 500, Fortune 1,000, top publisher type of businesses.

“We met the AppMagic team and founder Max Samorukov. Obviously, we went through a period of reviewing their business. It was interesting to see that so many of their customers didn't show up in our systems. Either they weren't prospects or they weren't in our CRM, like we just weren't even in the conversation.

“So that's the primary reason why the acquisition made sense to us. Because there's a pretty big segment of the market that we didn't service that we wanted to service.”

He adds: “Today, those smaller teams might feel like Sensor Tower is an overpowered product and we want AppMagic to be that starter platform for them to get familiar with.”

Market dominance

One chief concern of the AppMagic deal, combined with the previous acquisition of Data.ai, is whether too much power in the app market intelligence space is concentrated into one company.

In response to concerns of building a monopoly in the space, Cui says there have been acquisitions by web and ad networks in the app intelligence space, too. “These are not small companies making those acquisitions,” he states.

“I would also say that there's a lot of new mobile app intelligence companies coming up all the time, which is the reason why we acquired AppMagic to have our own SMB solution.

"I think the concerns are valid. Naturally, the Datai.ai Sensor Tower acquisition was a big headline. And I think for those especially in the gaming community that had used AppMagic, the AppMagic and Sensor Tower acquisition is a big headline. But acquisitions happen all the time. 

“We're certainly not the only player in the space, especially considering that we're trying to continue building our cross-platform capabilities and we view our competitors as not just mobile intelligence, but really anyone in competitive intelligence.”

We ask if Sensor Tower anticipates raising pricing across for the AppMagic and Sensor Tower platforms in the short-term or over the next few years.

“I think this acquisition is going to have no impact on our ideas for raising prices," Cui says. "In fact, we don’t want to raise prices on AppMagic. We want to maintain and stay in that SMB market. Ideally, we actually lower prices in AppMagic.

“There’s going to be more and more startups and more new mobile app intelligence companies that come into the marketplace where we want to be competitive with them and we want to have that startup package be inexpensive, and then one day when these companies are mature enough and they want to explore Enterprise metrics or functionality, they go to Sensor Tower.”

Direct-to-consumer revenue estimates

Even with the acquisition of its rivals, a key challenge for intelligence firms in generating estimates comes from the world’s top mobile publishers moving player spending over to their own direct-to-consumer platforms.

This can significantly cut fees for publishers by avoiding platform fees from Apple and Google, but it impairs visibility on that revenue for data firms.

Cui says one of Sensor Tower’s biggest areas of investment is first-party data and first-party user panel data. In the near future, the company will be providing estimates for revenue off-platform and expects to launch the first version of that product in the second half of 2026. An early beta is already underway with select publishers.

The product works by capturing email receipts of transactions, pulled from users that Cui says have opted into their panel. “And then, of course, we apply data science and modelling to make sure that it represents the population.”

Cui adds that Sensor Tower maintains its privacy policies and doesn’t collect user level information or personal information, with everything anonymised.

Moving forward, Sensor Tower isn't finished with acquisitions. Cui says the company is happy with its organic growth but it’s always evaluating new potential deals.

The acquisitions that it does, he adds, are meant to expand its geographic footprint, its product suite, as well as the segments of the market it can service.

"This AppMagic one helped us service a segment of the market. The Data.ai one really helped us with our geographic reach in servicing a lot of customers, especially in APAC that we didn't reach. And our future ones I anticipate will help increasing the number of products and data signals that we provide."