MTG Sees Flat Revenue Despite D2C Growth, Citing Google Fees and Rising UA Costs
MTG reported flat revenue in Q3, with direct-to-consumer sales reaching 42% of total income—up from 26% a year ago—driven by strong performance in its Playamp division. The company noted that new Google fees on external payment links in the U.S. are eroding some of the cost benefits of D2C, while higher user acquisition spending offset gains from reduced platform fees. Despite declines in some titles like Forge of Empires and Warhammer 40,000: Tacticus, MTG maintains its full-year guidance for 5% to 8% pro forma revenue growth.
MTG reported flat revenue of SEK 2.99 billion ($308 million) in Q3 2026, with direct-to-consumer (D2C) sales reaching 42% of total income—up from 26% a year earlier and 38% in Q2—driven by strong performance at its Playamp division, where D2C accounted for 55%. This shift reflects MTG’s strategic pivot toward reducing reliance on platform fees by encouraging players to pay directly through its own channels. However, the company noted that Google’s new policy, effective October 1, 2026, imposes platform fees on external payment links for Android users in the U.S., undermining some of the cost savings expected from D2C expansion. Despite lower platform fees from D2C, higher user acquisition (UA) spending—SEK 1.18 billion ($122 million), or 39% of revenue—offset gains, contributing to flat net sales and a modest 3% rise in adjusted EBITDA to SEK 693 million ($71 million). Playamp’s pro forma revenue declined 6%, dragged down by significant drops in Forge of Empires (down 13%) and Warhammer 40,000: Tacticus (down 10%), though Raid: Shadow Legends grew 1%. MTG maintains its full-year guidance for 5% to 8% pro forma revenue growth and an adjusted EBITDA margin of 22% to 24%, indicating confidence despite near-term headwinds. The company also announced the rebranding of its midcore division as Playamp, acquired WARP36 in August, and took full ownership of Snowprint, the studio behind Warhammer 40,000: Tacticus. Playsimple’s IPO has been postponed due to Indian capital market conditi
MTG’s experience highlights how platform policies can disrupt even well-executed business models, particularly in mobile gaming where monetization and user acquisition are tightly interwoven. The company’s shift toward D2C was designed to reduce dependency on Apple and Google’s 30% cut, but Google’s new fee structure may force a recalibration of that strategy, potentially slowing the pace of margin improvement. This could influence other game developers to reconsider their own D2C rollouts or push for alternative payment mechanisms, possibly accelerating innovation in third-party billing solutions. The broader mobile gaming ecosystem may see increased pressure on margins as platform fees rise and UA costs remain high, especially for midcore titles that rely on sustained player engagement. A comparable precedent is Apple’s 2021 App Store policy changes, which led to legal challenges and the emergence of alternative storefronts like Epic’s. MTG’s situation could signal a broader trend wh