Last week, Sensor Tower made headlines with its acquisition of Video Game Insights, marking a significant step into the realm of console and PC gaming data. This move raises intriguing questions about the implications of consolidation within the gaming analytics sector. A closer examination of Sensor Tower’s M&A strategy reveals both its ambitions and the potential risks that may accompany such rapid growth.
Sensor Tower aims for consolidation
In the world of video game analytics, consolidation is a rarity. Most companies tend to favor independent growth, with notable exceptions like Nielsen’s acquisition of SuperData Research in 2018, which aimed to bolster Nielsen’s esports data capabilities. However, that venture was short-lived, as SuperData was dissolved less than three years later, with some analysts suggesting the data market was already saturated at that time.
In stark contrast, Sensor Tower is pursuing a more assertive path. The acquisition of VG Insights marks the company’s third M&A endeavor, following earlier purchases that include:
- 2021: Pathmatics, a marketing platform that enhanced Sensor Tower’s mobile advertising analytics and provided insights for platforms such as TikTok and YouTube.
- 2024: data.ai (formerly App Annie), a direct competitor in mobile analytics, whose acquisition not only enriched Sensor Tower’s data collection capabilities but also significantly broadened its corporate client base.
Sensor Tower’s introduction of Steam, Xbox, and PlayStation market intelligence through VG Insights
While Sensor Tower has not publicly revealed the financial specifics of these acquisitions, it is known that the Pathmatics and data.ai deals were partially financed by Riverwood Capital, the company’s majority shareholder, which invested million back in 2020. Joost van Dreunen, co-founder of SuperData and now CEO of research firm Aldora, estimated the data.ai acquisition at around 0 million, based on its annual revenue of approximately 0 million.
At the time of the acquisition, data.ai was larger than Sensor Tower, as reflected in its workforce, revenue, and capital raised, which totaled 7 million across several funding rounds according to Crunchbase. This led to surprise within the industry, not only regarding the acquisition itself but also the fact that Sensor Tower was the acquirer.
In addition to Riverwood Capital’s backing, Sensor Tower secured credit-based financing from Bain Capital Credit, a subsidiary of Bain Capital that specializes in mezzanine loans, to facilitate the data.ai deal, although the specific terms remain undisclosed. The VG Insights acquisition, being a smaller entity, likely required fewer resources.
One of the dashboards on the VG Insights platform
However, reliance on private investors could pose risks for Sensor Tower in the long run. As a private company, the increasing influence of investors comes with heightened expectations for growth. One potential strategy is to pursue acquisitions of competitors rather than focusing solely on in-house product development. This approach, while unconventional for the data sector, was explicitly outlined by Sensor Tower COO Tom Cui following the data.ai acquisition. The company is determined to demonstrate growth through both organic and inorganic means.
The announcements of the data.ai and VG Insights acquisitions, both unveiled during the Game Developers Conference (GDC) just a year apart, prompt speculation about whether Sensor Tower will maintain this aggressive M&A trajectory. What is clear is the company’s commitment to expanding its analytics services, with a long-term vision of becoming a comprehensive “one-stop shop” for tracking all segments of the global gaming market.
This ambitious goal encompasses data tools for mobile, web, PC, and console products, positioning Sensor Tower as the go-to solution for all market players. “It’s going to take us years to get there. But with the combined resources [of acquired companies] and further brain power, we’re able to get there,” Cui stated.
VG Insights’ market position: what its acquisition means for Sensor Tower
From a business development standpoint, the acquisition of VG Insights appears to be a strategic move. With this deal, Sensor Tower has established itself as the “preeminent source for gaming insights,” broadening its reach into the PC and console markets.
Founded in 2020 by Karl Kontus, VG Insights emerged from Kontus’s experience at 2K Games’s London office, where he recognized a gap in comprehensive analytics tools for indie developers creating PC games. “If you’re a mobile game developer, you’re in luck when it comes to data. If you have enough money to get a Sensor Tower or App Annie subscription, there’s close to unlimited amount of data available for you. It’s incredibly good. And if you’re on the PC side, it’s much more of a struggle,” Kontus remarked.
