The BlueStacks Business Model – How Does BlueStacks Make Money?

Executive Summary:

BlueStacks is an emulator that allows Mac and Windows users to run almost any available Android app on their desktop devices.

BlueStacks makes money by promoting other games, through referral fees, as well as via video advertising.

Founded in 2008, BlueStacks has managed to accrue over one billion downloads as well as raise close to $50 million in funding throughout its existence.

What Is BlueStacks?

BlueStacks is an emulator that allows Mac and Windows users to run almost any available Android app on their desktop devices.

The software essentially creates a virtual version of an Android device that closely resembles a phone’s screen.

BlueStacks’ emulator is compatible with around 97 percent of apps that are available in Google’s Play Store.

While the emulator is particularly optimized to facilitate playing games on your desktop, it also allows you to run many other apps. The games can even be played using one’s mouse and keyboard.

Other features the emulator offers include the ability to play multiple games at the same time, real-time translations, recording and replaying actions, full-HD support, and more.

Using BlueStacks is as simple as it gets. Simply download the desktop software, sign in using your Google account, and then search and download the games you wish to play.

Apart from its regular desktop emulator, BlueStacks also allows users to play games within their browser via a product dubbed BlueStacks X.

BlueStacks Company History

BlueStacks, which is headquartered in San Francisco, California, was founded in 2008 by Rosen Sharma (CEO), Jay Vaishnav, and Suman Saraf.

CEO Sharma graduated from IIT Delhi with a Gold Medal and received a Computer Science Ph.D. from both Cornell University as well as Stanford.

While at Stanford, he started his first company called VxTreme, which was later acquired by Microsoft. Throughout the years, he managed to exit two more startups, namely GreenBorder to Google and Teros, which was purchased by Citrix.

In 2010, he joined software security company McAfee and became the CTO of its virtualization products. That’s where he ended up meeting his co-founders Vaishnav and Saraf who each held senior roles at the company.

The three began working on BlueStacks while being employed at McAffee. After more than two years of developing the product, the first BlueStacks demo was finally unveiled to the public in April 2011.

At the time, Android slowly managed to grow into the dominating mobile OS that it is today. That same year, more than 630 million Windows devices would be sold across the world. The convergence of Window’s dominance and Android’s exponential growth certainly made it a lucrative opportunity to go after.

To take advantage of that opportunity, BlueStacks announced its first found raise in May 2011. The team managed to score an impressive $8.7 million in funding, which certainly had a lot to do with the team’s impressive track record.

On October 10th, 2011, BlueStacks finally released the alpha version of the BlueStacks App Player. Ten days later, BlueStacks was able to score yet another round of funding. This time, investors such as AMD, Citrix Systems, as well as existing backers like Andreessen Horowitz poured in another $6.4 million into the burgeoning startup.

By mid-December, more than 550,000 people had already downloaded the App Player. In March 2012, BlueStacks released the beta version of the App Player and with it provided users access to the more than 450,000 apps available on Google’s app store. Prior to that, BlueStacks only offered a very number of apps. That same month, the App Player managed to cross one million downloads.

Three months later, in June, it also introduced the App Player for Mac. The Mac version was revealed at Google’s I/O Developer conference by setting up an enormous wedding tent to celebrate the ‘marriage’ between Apple and Android.

BlueStacks continued to announce major partnerships throughout the year, for instance with AMD (lead investor in its Series B) to specifically optimize BlueStacks for AMD GPUs and APUs. This move allowed AMD to vastly expand its reach by being the biggest player when it comes to bringing apps to Windows 8.

BlueStacks capped 2012 off by hitting 5 million installs all while offering access to 750,000+ Android apps. Five months later, on the heels of distribution deals with Lenovo (then the world’s largest PC maker), Asus, and Window’s Surface Pro, BlueStacks already managed to double its download numbers to 10 million.

In May 2013, the company dropped a bombshell announcement: it planned to release an Android-based gaming console dubbed GamePop by the year’s end. The console would compete against OUYA, one of the most well-received Kickstarter projects ever which itself had just raised $15 million from venture capitalists.

The console would give players access to around 500 gaming titles. Furthermore, BlueStacks partnered with mobile gaming developers like Glu Mobile and Halfbrick to launch dedicated games for the console.

Weeks after the announcement, BlueStacks announced that iOS-exclusive apps would be included in the console thanks to proprietary technology pioneered by the company named Looking Glass. Simultaneously, it also announced an alternate mini version of the console.

BlueStacks ultimately released the console in March 2014. Unfortunately, the reception was lackluster at best. Despite the firm’s best efforts (BlueStacks signed powerhouses like Ubisoft and Warner Bros. Interactive as game developing partners), the console eventually fizzled into irrelevance and was discontinued without any major news announcement.

Despite the failure, BlueStacks managed to continue raising additional capital. In July 2014, Samsung’s venture arm poured $14 million into the company. Instead, BlueStacks realigned its focus and put its efforts towards the development of its app emulator.

In December 2015, it released BlueStacks 2, which enabled users to run multiple Android apps at the same time amongst others. It also hit a major milestone by crossing 100 million downloads (while counting 8 million unique users per month).

Throughout 2016, BlueStacks was able to score some additional integrations with Twitch (to allow players to live stream Android games) and Facebook Live. By that point, the company had fully shifted its focus towards being a gaming emulator first and foremost.

In the coming years, it released subsequent versions of the emulator, with version 3 being launched in July 2017 and version 4 being introduced in September 2018. All subsequent versions offered major performance improvements.

By the end of 2018, the company’s download count had swelled all the way to 300 million. In June 2019, BlueStacks introduced the Inside SDK, which enabled partners like Steam to distribute Android games within their own stores.

The firm’s consistent growth throughout the years was rewarded with yet another round of funding. In November 2019, Intel invested $22 million into BlueStacks, which in turn built an optimized emulator for its chips.

In the meantime, the leadership team also built up sister companies which helped to expand the BlueStacks ecosystem. For example, in 2019, they launched Game.tv, a community for mobile e-sports tournaments.

2020, in particular, became a very successful year for the company. The coronavirus pandemic, which forced billions of people into lockdowns, led to an onslaught of new gamers – many of whom tried out BlueStacks.

By the beginning of 2021, ten years after its launch, BlueStacks had managed to cross the inaugural mark of one billion downloads. It celebrated that milestone by releasing version 5 of its emulator. It also introduced BlueStacks X in October, an emulator that can run in any modern-day browser.

While BlueStacks continues to grow at a very healthy rate, it is also about to face serious competition. In the summer of 2021, Windows announced that users will be able to natively run Android apps on Windows 11, which is slated to launch in 2022.

Today, over 500 people are employed by BlueStacks, which operates offices across the world in the countries like India, Japan, the United States, and more.

How Does BlueStacks Make Money?

BlueStacks makes money by promoting other games, through referral fees, as well as via video advertising.

Let’s take a closer look at each of these revenue streams in the section below.

Advertising

The majority of the revenue that BlueStacks generates comes from promoting other games within its platform.

Those games (as well as the developers behind them) are heavily promoted throughout the platform. Advertisements are shown in the form of banner ads on the side as well as through promotion icons.

While not officially disclosed, it can be assumed that BlueStacks receives a fee whenever a user installs the game that is being promoted.

Game developers benefit from a platform that has managed to attract more than a billion downloads. Just like Steam, BlueStacks can greatly accelerate the adoption of a game, which ultimately is worth paying for.

And because it is natively integrated into the Google Play Store, all subsequent transactions can be conducted within BlueStacks. For example, a freemium game like PUBG can generate revenue off of secondary sales just like it would be able to on mobile phones. S

Referral Fees

Another source of revenue for BlueStacks comes from the referral fees paid by Google whenever a user conducts a purchase in its Play Store.

While the majority of Android apps are free to use, some impose a fee if you want to download them. BlueStacks receives a referral fee whenever one of the paid apps is downloaded through its emulator.

Furthermore, Google also offers unlimited access to games through Google Play Pass. Yet again, if someone purchases the subscription through BlueStacks, the company will receive a portion of the fee for facilitating that transaction.

Video Ads

Lastly, BlueStacks also generates a very small amount of revenue from video ads that are running on its YouTube channel.

BlueStacks has managed to build up a subscriber base of more than 100,000 people, which have watched its videos over 20 million times.

While BlueStacks receives 55 percent of the ad revenue, the rest (45 percent) goes to YouTube, which manages those ads.

BlueStacks Funding, Revenue & Valuation

BlueStacks, according to Crunchbase, has raised a total of $48.8 million across four rounds of venture capital funding.

Notable investors include Andreessen Horowitz, Intel, Redpoint, Samsung Ventures, AMD, Citrix Systems, and many more.

As a company in private ownership, BlueStacks does currently not disclose any revenue or valuation figures to the public.

Who Owns BlueStacks?

While the ownership structure of BlueStacks is not publicly disclosed, it can be assumed that the majority is still being held by the firm’s founders.

Since the founding teams possessed decades of experience in both starting their businesses as well as within the tech industry, it can be assumed that they were often granted favorable terms.

Apart from the firm’s founders, institutional investors such as Andreessen Horowitz or Intel are likely holding larger stakes since they all led significant funding rounds.

BlueStacks’ ownership structure will, however, only be revealed whenever the company decides to go public.

Hi folks, Viktor checking in! Years of experience in various tech-related roles have led me to start this blog, which I hope provides you with as much enjoyment to read as I have writing the content.