🚨📢 BREAKING NEWS: Unity kills ironSource, Meta lawsuits, AppLovin moves

The underlying business called Unity Vector, the actual ad network that replaced old ironSource stack is growing [music] 15% Two and a Half Gamers exclusive. [music] Breaking news. Literally breaking. Hello everybody. Welcome. This is breaking news and it's going to be a solo episode. My name is Matej Lancaric which aka the guy with no intonation aka I wish Felix can do the news because he's well-spoken. Well, surprise, surprise. It's Matej again. So, this week is pretty spicy so I don't even need Jakub or Felix to make it interesting. We've got AppLovin doing quiet leadership shuffle while their stock is doing backflips. We've got Unity finally pulling the plug on ironSource. Yes, really, it's happening. And we've got Meta hitting the landmark court verdict that should

terrify every performance [music] marketer paying attention. Plus a quick look at where mobile games as a market actually sits right now because the Q1 dropped the data. Okay, let's go. So, Q1 2026 data is in and the headline is mobile is stable but not exciting. IAP revenues have set around 20 billion for three quarters in a row now. Downloads are multi-year low. Early stage investment, the stuff that tells you where the industry think it's going, dropped to just 30 43 deals in Q1. That's the lowest number in years. What that tells me is that the industry is in consolidation mode. Capital is flowing to proven operators, not new experiments. The shift is from installs to retention, from growth at any cost to doing more with less. And honestly, from a UA perspective,

this is actually a fascinating moment. I'm fine
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as a UA manager because where there's less money floating around for acquisition, the people who can do this efficiently, who can actually move the ROAS in the right direction, those are the winners. Hello, the UA guys. Efficient operators are separating from the rest. The market isn't broken, it's just demanding more. Okay, AppLovin. My favorite company to talk about. Big news this week, leadership reshuffle. CTO Basil Shikin, hopefully I didn't [music] butcher his name, who's been there since basically the beginning, is stepping back on July 1st into a distinguished engineer role. His replacement, Giovanni G, who was chief product and engineering officer, is the replacement pretty much. And the company also announced that their chief legal officer, Victoria Valenzuela, not Venezuela, is retiring in August.

On top of that, Craig Billings is coming to coming in as an independent board chair and one existing director isn't seeking re-election. Now, is is that alarming? Yeah, I don't think so. It's it seems more like planned succession than a fire drill. Okay. The mental's still absurd. Analysts are projecting Q1 revenue of 1.77 billion, which is up nearly 20% year-over-year. Well, not bad. One thing I will flag, CEO Adam Foroughi has been selling 26 27.5 million in shares recently. He still holds significant stakes and executive sells for all kinds of reasons, but when AppLovin stock has already come down hard from its high, it's not a nothing story. Definitely worth watching. Also notable,

ironSource, the AI engine, just announced partnership with Stack Well, a big global agency network. This is AppLovin moving beyond pure game UA into broader brand advertising territory. That's a strategic expansion. I will definitely keep a close eye on this. Now, this is the one I've been waiting years to talk about. [music] No, I'm just kidding. Unity is sunsetting the ironSource ad network on April 30th. And they're looking to divest Supersonic as well, their game publishing arm entirely. So, let me remind you what ironSource was. A 4.4 billion acquisition announced in 2022. Shareholders absolutely hated it. The integration was messy and now, four years later, Unity's essentially admitting this wasn't the asset. Well, here's the interesting part. The underlying business called Unity Vector,

the actual ad network that replaced old ironSource stack is growing [music] 15% sequentially. Well, I still can't can't find the proper use of Unity Vector, but let's see if it goes well, I might try it again. Their strategy grow revenue, excluding ironSource and Supersonic, is up 48% year-over-year. Which is which is actually a good story. If if you strip away the accurate garbage. Anyway, Unity and their message to the market is, we overpaid, we're cleaning the house, and here's what we actually are. Well, let's see how this goes for Unity. If they want to attack AppLovin's top position, they need to work harder. Okay, Facebook. This was the week. Let's do the ad tech stuff first and [music] then get to the controversy because, oh boy, there is a controversy.

On the product side, Meta Meta's AI advertising push is accelerating hard. So, Advantage Plus now handles 65% of Meta advertisers' campaigns. I can I can see that on my end as well. Although, Facebook data and performance sucks really bad for some reason. Well, the Andromeda system, their new AI engine, has overhauled how ads match to users. And Meta has publicly said that their end goal is 2026 and that's a fully automated ad system where you just give them a URL and a budget and the AI does everything. Creative, targeting, placement, and bids. All of it. Now, as someone who works in UA, this is genuinely fascinating and a little terrifying as well. I mean, we've seen this with Google UA C back in the days. Although, that kind of went quite well afterwards. Because on one hand, the

automation delivers, lowers the barrier for small developers. On the other hand, it means the creative strategy layer, the part that actually smart UA team adds, gets compressed. The new advantage isn't campaign management, it's creative diversity and first-party data quality. What's worth noting, there was a March algorithm update that caused CPI spikes across a lot of accounts. This is what I'm talking about. It was absolutely a big show. So, if you're if you're not [music] running Meta UA and you saw your performance, this is why. Yes, thank you very much, guys. You definitely helped me and a lot of guys that I know suck at UA on on Facebook. Anyway, now the controversy. Two landmark court verdicts landed this week that the entire IT industry should be watching. In New Mexico, the jury found Facebook liable for child child safety violations and ordered 375

million in damages. The very next day, a California jury found both Meta and Google liable for negligence, specially for how their platforms were designed to addict a young user. Instagram, YouTube,
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6 million in damages with Facebook holding 70% of the liability. Here's why this matters beyond the dollars amount. For the first time, a jury ruled that it isn't about the content on the platform. It was about the design of the platform. Infinite scroll, recommendations algorithm, push notifications, the jury said. These were deliberate choices to maximize engagement and hook user, including kids. Internal Facebook documents shown in court, something called Project Mist, allegedly showed Meta knew that children were the most vulnerable to addiction and that parents were [music] powerless to intervene.

The question everyone is asking, will advertisers run away from the platform? Well, history says no. Facebook ad revenue went up 33% the same quarter Wall Street Journal broke the teen mental health story in 2021. Advertisers follow performance. They don't care about anything else. That's why we see all the all the sexist and terrible ads on Facebook, especially. So, that's your week in mobile gaming. Market is consolidating. Efficient UA wins, of course. AppLovin is cleaning up governance head and it looks like it's going to be strong earnings in May and Unity is finally burying ironSource and betting on Vector. If you enjoyed this, drop us a review. It genuinely helps the show reach more people in the gaming industry. Jakub and Felix will be back with me for the next episode and we are cooking something

very, very interesting for you. Until then, see you next time. Bye-bye.