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IronSource has long helped games and apps become more popular through its ad monetization tricks. But now it’s going into publishing and development with the opening of Supersonic Games.

The Tel Aviv, Israel-based IronSource is one of the biggest mobile marketing companies, with its ad network, user acquisition platform, and ad mediation businesses. It helps game and app makers acquire users at the lowest possible costs.

But now it’s creating a mobile studio that will focus on publishing and developing ad-based games. By extending the services it offers developers, and becoming more deeply involved in creating and launching games, IronSource said it will also be able to add more value to all game developers already utilizing their platform.

Of course, the downside is that the company will now compete with its customers, as IronSource’s rival AppLovin did when it announced its move into games with the opening of Lion Studios.

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Chief revenue officer Omer Kaplan said in a statement that the new studio is a natural evolution that will strengthen the company’s connection to the game industry. He said the vision is to be the platform which enables partners to reach their full potential. Kaplan said getting closer to the creation process of one of the fastest-growing segments in mobile time spent is a key part of that.

“This move is based on our analysis of the market opportunity and how we can continue to invest in the game industry,” Kaplan said in an email to GamesBeat. “The more competitive the game industry becomes, the more critical it is to have access to robust technological infrastructure for game growth, and to be as efficient as possible in terms of the power of your marketing spend. Combining game growth technology and expertise with owned and operated games will give any company a significant edge in today’s game industry, and we’ve seen this play out with increased vertical consolidation in the industry.”

Within 10 days of its founding, Supersonic Games has already published a chart-topping game, with Sort It 3D reaching the top of the major European, U.S., South Korean, and Japanese charts within a day of launch. The company said it has an exciting pipeline of games which will be launched within the next month.

Developers working with the studio will be able to tap into ironSource’s game growth platform and benefit from access to the extensive scale of the company’s game network. Additionally, developers will have the opportunity to partner with a team that has deep knowledge and experience executing user acquisition and ad-based monetization strategies to scale games, IronSource said.

“We truly believe that merging gametech and successful ad-based games is the best, most efficient model of generating sustainable long-term growth for ironSource and for the game industry at large,” Kaplan said.

Above: IronSource is making ad-based games itself.

Image Credit: IronSource

Beyond the ongoing horizontal consolidation of the game industry, the last two years have seen an uptick in vertical consolidation, with successful game studios joining adtech providers or vice-versa (like with AppLovin’s move).

Companies that combine a strong advertising business with a popular mobile games offering enjoy a significant edge in today’s competitive market, benefiting from a more efficient funnel with fewer margins, ultimately resulting in more revenue for the developer, the company said.

Founded in 2010, IronSource bought user acquisition fim Supersonic in 2015. IronSource now has 850 employees in 13 offices. The game studio has 20 mobile growth experts led by Supersonic Games general manager Nadav Ashkenazy, and it is expected to grow to more than 60 by the end of the year.

Kaplan said the aim to have several big hits by the end of 2020. I asked why it would be OK to compete with customers.

“The game industry has seen amazing growth over the last few years, especially with the emergence of new genres like hypercasual games, which resonate with very wide audiences. We believe that by helping to launch and develop more mobile games, we’ll succeed in growing the pie for everyone, and bringing more mobile gamers into the ecosystem,” said Kaplan. “It’s also important to say that this move doesn’t change our essential mission, which is still to help turn great games into great businesses. Our goal has always been to help our partners grow, and that won’t change just because we invest in a new growth opportunity. In fact, by expanding our focus to the game development process, we’re more likely to be able to help our partners by adding more relevant services to our offering.”

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