"Applovin fell this week after Google released a virtual world-building AI tool, and a digital ad tech startup released its a powerful agentic product. Trading at a high valuation coming onto the week, and Applovin was hit hard, despite a recovery today. It remains highly uncertain whether these two new innovations will pose competitive threats or not in mobile gaming ad delivery."
"The weakness in gaming-related stocks began last Friday, the day after Google rolled out Project Genie to Google AI Ultra subscribers. Virtually all video gaming-related stocks fell in unison after the unveiling, and Applovin got caught up in the sell-off. The actual effect on video game developers is uncertain. Still, of course, Applovin doesn't make mobile games anymore, having sold its video game development business in June 2025 to focus on its digital advertising engine."
Applovin shares fell 14.9% through Friday as of 3:15 p.m. EDT amid investor concern about two new AI developments in mobile gaming. Alphabet unveiled Project Genie, an AI-powered tool to create virtual worlds, and CloudX, an AI-based digital advertising start-up, became generally available. Applovin sold its video game development business in June 2025 and now focuses on a mobile advertising engine. Market participants worry Alphabet or CloudX could exert competitive pressure if Genie-produced games are distributed on Google platforms and favor Google's ad systems. The actual competitive impact on Applovin remains highly uncertain despite the market reaction.
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