10 ms·

Unity’s pricing is a symptom, not the cause of tougher times for the industry

93 points by stuckinhell 3y ago

lowbloodsugar 3y ago
>Developers unsurprisingly threw their proverbial toys out of the pram following the news. It doesn't get better. Garbage article.
- kemayo 3y ago
  Yeah, I thought that going all on in language implying "game developers are babies throwing a tantrum" was a bit much.
- sickofparadox 3y ago
  >As a side note, I always find it quite amusing when for-profit companies accuse another for-profit company of being unfair by wanting to make more money. Maybe because most people think you shouldn't announce that you are going to fundamentally alter the way your payment model works for the reason of "We didn't make ENOUGH profits last quarter". Article was written by a soulless mba-style cretin. Into the garbage it goes.
  - imbusy111 3y ago
    Why is a perspective from a "soulless mba-style cretin" discarded, if it is presented in a logical way? Unity is a for-profit business after all, and a public one.
    - sickofparadox 3y ago
      Because mba-style cretins with no souls are the overseers pushing these extractive and rent-seeking decisions into every facet of our lives. The article's title, if I am being fair, is correct, but the author never mentions that people such as himself are cause of these symptoms.
    - lowbloodsugar 3y ago
      What part of “throwing their toys out of the pram” gave you the impression that it was logically argued?
stuckinhell 3y ago
The part I found interesting: With the rise of free-to-play, cloud gaming and live ops, the power (and revenue) will increasingly become concentrated among a smaller number of games companies as games production and publishing become a lower margin business (just like any business that experiences content commoditisation via streaming). The number of installs / downloads / plays will not go down (neither will the number of gamers), but the number of developers and publishers likely will. Hence Unity's per-download pricing decision. It is recognising tougher times ahead and de-risking against the coming consolidation of the games industry's landscape – which is, strategically speaking, sound thinking for a company that spent a lot of time and money to move towards profitability and is looking to maintain it in the current landscape.
- dleslie 3y ago
  Roblox is an example of this, and Fortnite is following its lead: the game is the social network, the distribution platform, the development target, and the runtime for other games. There's an entire generation of kids for whom "Video Gaming" is synonymous with Roblox or Fortnite, rather than Steam, Xbox or Playstation. Interestingly, it seems like Nintendo is still its stalwart and indefatigable self; unrelentingly unstoppable and irreplaceable.
  - stuckinhell 3y ago
    Wow, thats a mind blowing example.
  - Macha 3y ago
    And Minecraft before those and call of duty before that, and wow/RuneScape before that. Call of Duty at least relied on Xbox Live, I guess but the others were their own ecosystems
  - duxup 3y ago
    The social aspects are huge on Roblox, but so is the ease of just ... trying lots of stuff quickly. When I watch my son play with his friends they hop from game to game a lot, often trying out new games, similar, or completely off the wall. It's a wild ecosystem that offers a crazy amount of variety. That ease of access to the variety I think is a big reason for the success.
ZeWaka 3y ago
Not the best article. It basically entirely ignores how this is going to hurt the small/indie developers the most, who are the main reason Unity exists as it does today. Indie games will have lower price points than AAA games, and thus Unity's cut is a larger piece of the ever-shrinking pie. My personal opinion about this whole fiasco is that they'll go back on their original statement to something still quite greedy but less so than the prior. Perhaps they planned that all along?
- gambiting 3y ago
  >> It basically entirely ignores how this is going to hurt the small/indie developers the most, who are the main reason Unity exists as it does today. You only start paying if you have 200k installs AND $200k in revenue. Most indie devs never reach anything like those numbers.
  - LapsangGuzzler 3y ago
    Right, but once a dev does hit that threshold, they could very easily be upside down on their income if the app goes viral and gets installed at a much higher rate than the revenue it generates and that's what people are mad about. You could instantly go from 200k revenue to being in the red on developer fees alone.
    - mcpackieh 3y ago
      Indie devs actually selling their game should be fine right? If it's just the devs of F2P / adware crap that will be sunk, then maybe Unity's new pricing policies will be the unexpected savior of gaming. Imagine a world in which we're not racing to the bottom with ad-ridden shovel-ware but instead people try to make the best possible product and sell it for what it's worth... radical. Or maybe I've misunderstood something and this will hurt developers who sell their games too.
      - Hemospectrum 3y ago
        Install bombing is still a problem. Unity, for all its "clarifications," keeps promising it won't be a problem and then refusing to be transparent about any of the ways it could possibly be less of a problem. Either they backtrack on this whole lifetime install count scheme or this blows up even more spectacularly when January rolls around.
high_5 3y ago
> Meanwhile, time-spent-centric business models mean that games are not competing with just games (like they once used to), but with other entertainment propositions for the limited 24 hours of the day. Interesting. Theoretical "(number of people) x 24h/day" is the max limit for attention economy. Has it already hit the ceiling?
- stuckinhell 3y ago
  It's got me thinking we might have hit "peak content" too. Is there is just enough high quality historical media and endless free cheap modern media to consume ?
  - ascagnel_ 3y ago
    A Fox network executive was saying that if the WGA/SAG-AFTRA strikes aren't resolved by October 1, the US TV season is effectively cancelled[0], so we may be about to find out. Disney has already dipped their toes in airing things that were exclusive to Disney+ -- Ms. Marvel and Andor both got limited showings on ABC (Disney's broadcast network) as promos for other materials, but I could see more of that happening if the strikes force new work to be abandoned. [0]: https://deadline.com/2023/09/fox-krapopolis-animation-strike-fall-schedule-1235545088/ https://deadline.com/2023/09/fox-krapopolis-animation-strike...
- terribleperson 3y ago
  I believe (with no evidence) that infinite-scrolling social media sites have already consumed most available attention. To get a share of attention you now have to compete with them, instead of simply being an alternative to boredom.
  - epolanski 3y ago
    To be honest if games can't compete with doom scrolling they are either crap games or the social media doom algos are too effective. No part of me thinks "I'd rather scroll my social feed" rather than doing pretty much anything more fun.
mcpackieh 3y ago
> but of course, the games industry declined in 2022 I suppose the article author would have me believe that is indicative of a broader trend, but does anybody think a drop in games profits in 2022 isn't simply a consequence of covid policies ending?
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SeanAnderson 3y ago
Meh. Half true. Capitalism requires up-and-to-the-right progress on stock performance. The main ways to achieve this are through legitimate innovation and/or squeezing existing innovations. Unity finds itself becoming an ad-tech company. There aren't a lot of technical innovations in that space, so they're left with squeezing their users. If their business model had stayed more focused on monetizing the sale of their tooling, rather than ads within, then they'd be rewarded more heavily for innovation. I get the impression that this is exacerbated by us all having existed in a low interest rate world for a while. There wasn't a ton of pressure. You could take on debt for projects that made money, but not a ton of money, and that was still sufficient to appease investors. Now that money is worth something again, thanks to high interest rates, and with some pressure from inflation - it's not such an easy world. Previous choices now have ramifications that become apparent. One of those is users getting squeezed by companies that don't have reasonable ways to sustainably innovate their way to higher returns. Companies which overplayed their hands will go under as users reject them outright. This makes space for newcomers. The circle of life :)
- Stealthisbook 3y ago
  While there might not be much innovation available in the ad tech space, there's plenty to address in gaming (and ad tech may have lots of arbitrage given different legal regimes) If Unity made their engine just more usable, much less more capable, than UnReal and others they would gain market share. That's ignoring the other lucrative arenas games engines have entered like movie vfx and vr. The CEO going full tilt into enshittification is just a symptom of terrible leadership
  - SeanAnderson 3y ago
    Do they have the capital to do that, though? My impression is that the Unity software is a quagmire of tech debt. and that napkin math on trying to fix those issues, then wait for sentiment to change, then grow, then capture value from the growth - doesn't pan out. Their stock is trading down 50% from IPO. I can't imagine investors are very supportive of burning a ton on technically complex, long-term initiatives?
ysavir 3y ago
Has there been any explanation, from Unity themselves or anyone else, as to why Unity thinks it deserves a cut based on install count? Do installs have to connect to Unity servers to download something? Anything like that? Everything I've seen so far points to no baser an explanation than Unity realizing it had an avenue of attack and deciding to employ it--and an attack is exactly what it is, a raid on other people's business model.
- paulddraper 3y ago
  "deserves" Do entities (vendors, suppliers, employees) "deserve" to get paid for their costs? Or for the value they add?
  - lcnPylGDnU4H9OF 3y ago
    Put another way, does a business fail because it didn't get what it deserved, or does it fail because it got exactly what it deserved?
  - ysavir 3y ago
    Repeating my response to a sister comment for visibility: Unity definitely deserves to get paid for the value they provide. But why should that value scale with install count? Doesn't it already charge for licenses to develop the game? There is a big disconnect between "We make tools for game developers" and "we should get revenue share of the game developer's income". In what way does this proposes business model sync up with the value they provide?
- cheschire 3y ago
  All I can think of is perhaps they feel like their own reputation is under attack for being associated with F2P adware games, and they're trying to mount a defense against that.
- ralferoo 3y ago
  > Has there been any explanation, from Unity themselves or anyone else, as to why Unity thinks it deserves a cut based on install count? The simplest is that by using Unity, the developer reduces their development costs compared to creating a game without using an engine and the tooling that comes with it. If they don't think the advantages that using Unity gives them is worth $0.20 per copy, they should probably work out how much it'd cost to hire more developers to do the extra work they'd have to do to create their game without Unity.
robswc 3y ago
This really does seem like suicide. I'm not a game dev though. Is there any reason everyone won't/can't just switch to Unreal Engine? Is this a case where they overstepped or is it like reddit where the only leverage the user base has is illusory?
- raincole 3y ago
  > Is there any reason everyone won't/can't just switch to Unreal Engine? Switching engines mean to rewrite most of your codebase. Actually if you're 1) not using an additional scripting layer or 2) not willing to lose performance, it means to rewrite about... 100% of your codebase.
  - robswc 3y ago
    That sucks. I mean, going forward would anyone still start projects with Unity? Or is that ship sailing?
    - raincole 3y ago
      I'm sure any studio with the resource has assigned some workforce to survey the alternatives.
    - starshadowx2 3y ago
      There are a lot of studios and devs now saying they won't use Unity for new projects. Some will be able to switch to new engines, others are just completely cancelling in-progress projects.
- ZeWaka 3y ago
  Porting is a relatively big issue. Core game systems often intertwine closely with how the engine operates, especially graphics systems like the renderer or particles/effects. It's totally possible though. One of the game projects I help with switched from SFML to Godot to an in-house engine. There's also the 'skilling up' of a dev team. If a studio has developed on Unity for 10 years, switching to Unreal or Godot or similar will be... Challenging.
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Stealthisbook 3y ago
With the phrase 'throwing their toys out of the pram' I immediately knew there was a problem with this article. There might be overblown anxiety over uncertain outcomes related to fees or from developers that would never realistically be affected, but it's totally reasonable to be pissed that terms of service can change retroactively to include both products in development and existing games. Having a Unity based game available for download suddenly becomes an undefined liability that might bite out of nowhere based on it going viral, or even malicious intent.
dwallin 3y ago
It’s not the fact that Unity wants to make more money from its engine that has gotten people so up in arms about it, it’s the way it was structured. If they simply took a percent of revenue, everyone would have shrugged, you might have had some indies complaining, and the world would have kept on turning. Instead, they made a couple of compounding missteps. An install based fee creates a massive amount of uncertainty about how much you will owe at the end of the month, creating potential cash flow issues. You are at the whims of Unity in terms of how they calculate it, and praying that they properly handle all the edge cases and potential abuses, despite all their incentives giving them plenty reasons not to care that much. And then on top of all of that they made it retroactive to all existing games on the market using their engine. Companies had a very reasonable expectation that they could rely on the terms their games were released under. All that trust has now been upended. Unity has shown they are willing to change terms retroactively with little notice. Now when evaluating Unity as an engine you will have to take into account not only the current fee structure, but also the risk that they will add additional fees retroactively that have the potential to completely disrupt your business model.
- imbusy111 3y ago
  I can see the reversal of previous terms of service getting challenged in court. But that's a lot of effort, of course. Maybe IGDA can take on the challenge. Seems obvious, that if you did not agree to the ToS, you cannot be held accountable.
  - starburst 3y ago
    I certainly hope that at least, legally speaking, they would be forced to back down on games built using older version of the unity engine so that previous and upcoming projects aren't affected.
- SL61 3y ago
  And, if I'm reading the details correctly, it seems like it's going to push developers toward charging recurring subscription fees for their games. If I install a game 20 times in the span of a decade, the devs are being charged over the long term while I only paid once.
fidotron 3y ago
It's not only games. Docker and Arm are two other companies with highly visible challenges, and many more will have them less visibly. Life is so easy when you can throw money around. When you suddenly can't you end up learning what it means to make tough decisions about values.
gmerc 3y ago
Bad take. If the author understood games, he would know that the ecosystem just does not have the capacity to sustain tech like margins. Of course that’s ultimately what Bay Area Companies, especially EA and Unity and their (ex/current CEO) dream off and want to sell their investors but they slept through the part where the tech giants took those margins from the people that initially made them big. Having run multiple P&L for major studios - it’s just not feasible; it’s not a high margin industry like ads, even in mobile and there are many rentseekeers already leeching from developers on mobile: - Apple - Facebook/Tiktok. CPI is massive and entirely unavoidable in mobile precisely because Facebook and Unity have drive commodisation of Games over the last decade. There’s more supply than demand and Facebook sits right in the middle matching it (and increasingly tiktok), pitting Chinese fake game video ads against serious developers. Most independent studios in the world are barely profitable, a stunning number of them are reliant on tax credits. Mobile Gaming is insanely competitive, Apple’s landgrab has destroyed competitiveness of smaller ad solutions who can’t compete with Facebook’s AI powered mitigations. The lucrative China market (China is a mobile gaming exporter and devs are large spenders on ads) has been wingclipped and seen powerful competitors like Tiktok rise. Unity is out of their mind with this move and out of their class on expectations. They went with VCs and sold promises anyone with understanding of games knew you cannot cash. It’s a bit driven game and almost every highly profitable hit game (the top 10 that account for the majority of revenue at any time) is using their own engine. Fun fact: Even in the best times, BioWare’s profitability was highly tied to tax credits. Alberta ramping them down forced during an investment / console cycle for ed the sale to VG Holdings (CEO:John Riccitello) who promptly switched to EA and influenced them to buy his own investment, VG holdings at a 4x ROI. He then instituted various investor focused profitability drives such as the infamous swipe your credit card to reload your gun in battlefield pitch, the Mobile F2P defoliation of Dungeon Keeper and Ultima forever and eventually got fired and went to Unity where he made various deals, including with Facebook that died the moment he got greedy and asked them for ads RevShare which instantly ended the relationship. Tons of other ad tech investments and the occasional molestation charges from fellow C-Level executives followed and neither seem to have not paid off (except for Riccitello Pizza in NY who may be puzzled why they suddenly were the first hits globally on the name after reputation management consultants got dispatched) or they wouldn’t have to start squeezing devs. No, Mr. Riccitello is a very typical CEO on a mission to get very rich as fast as possible by optimizing on short term investor pitches and delusions of joining the ranks of the people he hangs out with in Silicon Valley. Nothing new, the industry is full of these types at the top and they mingle with the people they want to become (See Bobby Kotik dating Sheryl Sandberg which fits so well with her focus on women given the corporate culture he created at Blizzard ). The real crux though is the sudden altering of the deal with little communication, care and expectation settings. This happens because they knew it would not be a good sell, especially internally. Their own people would have rebelled so they black-opsed it without internal consultation of the people actually understanding developers to avoid internal riots and as a result missed every single edge case. What will happen now is mass abandonment of Unity for new projects. Interestingly, AI is reducing the costs of engine changes rather dramatically right now. The timing suggests this was a “shareholders won’t like next quarter and must be placated” emergency ripcord, especially coupled with the stock sales by insiders that have been going into overdrive recently. Low interest party is over - and VCs may find it hard to find a bag holder for Unity. Games is a fickle business. Now Unity is under increased pressure to provide their VCs with a bag-holder exit (sell a growth story to institutional investors to con them into taking the sinking stock off the hands of the VCs. Where have we seen the same pattern recently ... ah, yes, reddit. Same symptoms, same disease. https://venturebeat.com/games/the-ups-and-downs-at-ea-under-fired-ceo-john-riccitiello-and-its-outlook-for-the-future/ https://venturebeat.com/games/the-ups-and-downs-at-ea-under-... https://variety.com/2019/gaming/news/former-unity-exec-files-lawsuit-alleging-ceo-sexually-harassed-hr-others-1203236756/ https://variety.com/2019/gaming/news/former-unity-exec-files... https://www.ign.com/articles/former-ea-ceo-devs-who-dont-focus-on-microtransactions-are-the-biggest-f-idiots https://www.ign.com/articles/former-ea-ceo-devs-who-dont-foc...
jzb 3y ago
Like other folks, I'm disappointed in the author for deliberately misunderstanding the actual scenario here. As I understand it Unity has said it would not do exactly what it has done. This isn't even a "rug-pull" in the sense that people assumed wrongly that Unity wouldn't do these things without explicit assurances. This is a company expressly going back on its word after people have gone all-in on its platform. And the fact that Unity is trying to switch terms out from under people who've already agreed to and planned on different terms. Hashicorp is rightfully getting slammed for abruptly changing licenses, but its community has the final releases under the old licenses to fall back on. With Unity it's a major bait-and-switch. I don't buy the argument that developers shouldn't be angry at Unity. If Unity's model is not profitable or profitable enough there are plenty of ways that it could've approached this that might have been a bit painful but not nearly as harmful.
duped 3y ago
> Meanwhile, time-spent-centric business models mean that games are not competing with just games (like they once used to), but with other entertainment propositions for the limited 24 hours of the day. Yet gaming is winning, it surpassed film and music combined over the last few years. I've been thinking about this a lot the last few days because it doesn't make a ton of sense. They're charging the people who make the least money the highest fees (past a relatively low revenue threshold). Normally you'd do the opposite because the biggest customers have the most to lose and cost the most in maintenance resources. And the other way to make money is to innovate and create products that create more value for your customers, but they're giving them away for free with the new model. That's tacitly admitting they suck (or suck at selling them). The explanation I can think of is that they're hemorrhaging money and the C suite is going to lose their jobs if they don't have cash flow ASAP
- starburst 3y ago
  Short term cash flow but with a potential future of 0 new projects ever being greenlight using Unity... I guess it is still better than going even deeper into debt short term but the thing is that there is so many more ways they could have done that, yet they seems to have picked the one that ensure them in practice no future at all.
  - duped 3y ago
    Unity is selling picks and shovels to a gold rush, but they aren't as good as Epic's. My guess is their reaching into their customers' pockets today to pay for better picks and shovels tomorrow, but they don't know how to do the latter yet only that they know they need the money today.
zzleeper 3y ago
Revenue US$1.39 billion (2022) Operating income US$–882 million (2022) Net income US$–921 million (2022) Total assets US$7.83 billion (2022) Total equity US$3.53 billion (2022) Number of employees 7,703 (2022) (From Wikipedia) Holy F these numbers are tough, sp in a high rate environment. Why would unity need almost 8k employees??
3seashells 3y ago
So.. What if I have one unity instance, installed once, loading other games as package? Nothing gets "installed" engine wise but the app becomes a perma installed store ?

93 points by stuckinhell 3y ago

>Developers unsurprisingly threw their proverbial toys out of the pram following the news. It doesn't get better. Garbage article.

kemayo 3y ago
Yeah, I thought that going all on in language implying "game developers are babies throwing a tantrum" was a bit much.
sickofparadox 3y ago
>As a side note, I always find it quite amusing when for-profit companies accuse another for-profit company of being unfair by wanting to make more money. Maybe because most people think you shouldn't announce that you are going to fundamentally alter the way your payment model works for the reason of "We didn't make ENOUGH profits last quarter". Article was written by a soulless mba-style cretin. Into the garbage it goes.
- imbusy111 3y ago
  Why is a perspective from a "soulless mba-style cretin" discarded, if it is presented in a logical way? Unity is a for-profit business after all, and a public one.
  - sickofparadox 3y ago
    Because mba-style cretins with no souls are the overseers pushing these extractive and rent-seeking decisions into every facet of our lives. The article's title, if I am being fair, is correct, but the author never mentions that people such as himself are cause of these symptoms.
  - lowbloodsugar 3y ago
    What part of “throwing their toys out of the pram” gave you the impression that it was logically argued?

stuckinhell 3y ago

The part I found interesting: With the rise of free-to-play, cloud gaming and live ops, the power (and revenue) will increasingly become concentrated among a smaller number of games companies as games production and publishing become a lower margin business (just like any business that experiences content commoditisation via streaming). The number of installs / downloads / plays will not go down (neither will the number of gamers), but the number of developers and publishers likely will. Hence Unity's per-download pricing decision. It is recognising tougher times ahead and de-risking against the coming consolidation of the games industry's landscape – which is, strategically speaking, sound thinking for a company that spent a lot of time and money to move towards profitability and is looking to maintain it in the current landscape.

dleslie 3y ago
Roblox is an example of this, and Fortnite is following its lead: the game is the social network, the distribution platform, the development target, and the runtime for other games. There's an entire generation of kids for whom "Video Gaming" is synonymous with Roblox or Fortnite, rather than Steam, Xbox or Playstation. Interestingly, it seems like Nintendo is still its stalwart and indefatigable self; unrelentingly unstoppable and irreplaceable.
- stuckinhell 3y ago
  Wow, thats a mind blowing example.
- Macha 3y ago
  And Minecraft before those and call of duty before that, and wow/RuneScape before that. Call of Duty at least relied on Xbox Live, I guess but the others were their own ecosystems
- duxup 3y ago
  The social aspects are huge on Roblox, but so is the ease of just ... trying lots of stuff quickly. When I watch my son play with his friends they hop from game to game a lot, often trying out new games, similar, or completely off the wall. It's a wild ecosystem that offers a crazy amount of variety. That ease of access to the variety I think is a big reason for the success.

ZeWaka 3y ago

Not the best article. It basically entirely ignores how this is going to hurt the small/indie developers the most, who are the main reason Unity exists as it does today. Indie games will have lower price points than AAA games, and thus Unity's cut is a larger piece of the ever-shrinking pie. My personal opinion about this whole fiasco is that they'll go back on their original statement to something still quite greedy but less so than the prior. Perhaps they planned that all along?

gambiting 3y ago
>> It basically entirely ignores how this is going to hurt the small/indie developers the most, who are the main reason Unity exists as it does today. You only start paying if you have 200k installs AND $200k in revenue. Most indie devs never reach anything like those numbers.
- LapsangGuzzler 3y ago
  Right, but once a dev does hit that threshold, they could very easily be upside down on their income if the app goes viral and gets installed at a much higher rate than the revenue it generates and that's what people are mad about. You could instantly go from 200k revenue to being in the red on developer fees alone.
  - mcpackieh 3y ago
    Indie devs actually selling their game should be fine right? If it's just the devs of F2P / adware crap that will be sunk, then maybe Unity's new pricing policies will be the unexpected savior of gaming. Imagine a world in which we're not racing to the bottom with ad-ridden shovel-ware but instead people try to make the best possible product and sell it for what it's worth... radical. Or maybe I've misunderstood something and this will hurt developers who sell their games too.
    - Hemospectrum 3y ago
      Install bombing is still a problem. Unity, for all its "clarifications," keeps promising it won't be a problem and then refusing to be transparent about any of the ways it could possibly be less of a problem. Either they backtrack on this whole lifetime install count scheme or this blows up even more spectacularly when January rolls around.

high_5 3y ago

> Meanwhile, time-spent-centric business models mean that games are not competing with just games (like they once used to), but with other entertainment propositions for the limited 24 hours of the day. Interesting. Theoretical "(number of people) x 24h/day" is the max limit for attention economy. Has it already hit the ceiling?

stuckinhell 3y ago
It's got me thinking we might have hit "peak content" too. Is there is just enough high quality historical media and endless free cheap modern media to consume ?
- ascagnel_ 3y ago
  A Fox network executive was saying that if the WGA/SAG-AFTRA strikes aren't resolved by October 1, the US TV season is effectively cancelled[0], so we may be about to find out. Disney has already dipped their toes in airing things that were exclusive to Disney+ -- Ms. Marvel and Andor both got limited showings on ABC (Disney's broadcast network) as promos for other materials, but I could see more of that happening if the strikes force new work to be abandoned. [0]: https://deadline.com/2023/09/fox-krapopolis-animation-strike-fall-schedule-1235545088/ https://deadline.com/2023/09/fox-krapopolis-animation-strike...
terribleperson 3y ago
I believe (with no evidence) that infinite-scrolling social media sites have already consumed most available attention. To get a share of attention you now have to compete with them, instead of simply being an alternative to boredom.
- epolanski 3y ago
  To be honest if games can't compete with doom scrolling they are either crap games or the social media doom algos are too effective. No part of me thinks "I'd rather scroll my social feed" rather than doing pretty much anything more fun.

mcpackieh 3y ago

> but of course, the games industry declined in 2022 I suppose the article author would have me believe that is indicative of a broader trend, but does anybody think a drop in games profits in 2022 isn't simply a consequence of covid policies ending?

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SeanAnderson 3y ago

Meh. Half true. Capitalism requires up-and-to-the-right progress on stock performance. The main ways to achieve this are through legitimate innovation and/or squeezing existing innovations. Unity finds itself becoming an ad-tech company. There aren't a lot of technical innovations in that space, so they're left with squeezing their users. If their business model had stayed more focused on monetizing the sale of their tooling, rather than ads within, then they'd be rewarded more heavily for innovation. I get the impression that this is exacerbated by us all having existed in a low interest rate world for a while. There wasn't a ton of pressure. You could take on debt for projects that made money, but not a ton of money, and that was still sufficient to appease investors. Now that money is worth something again, thanks to high interest rates, and with some pressure from inflation - it's not such an easy world. Previous choices now have ramifications that become apparent. One of those is users getting squeezed by companies that don't have reasonable ways to sustainably innovate their way to higher returns. Companies which overplayed their hands will go under as users reject them outright. This makes space for newcomers. The circle of life :)

Stealthisbook 3y ago
While there might not be much innovation available in the ad tech space, there's plenty to address in gaming (and ad tech may have lots of arbitrage given different legal regimes) If Unity made their engine just more usable, much less more capable, than UnReal and others they would gain market share. That's ignoring the other lucrative arenas games engines have entered like movie vfx and vr. The CEO going full tilt into enshittification is just a symptom of terrible leadership
- SeanAnderson 3y ago
  Do they have the capital to do that, though? My impression is that the Unity software is a quagmire of tech debt. and that napkin math on trying to fix those issues, then wait for sentiment to change, then grow, then capture value from the growth - doesn't pan out. Their stock is trading down 50% from IPO. I can't imagine investors are very supportive of burning a ton on technically complex, long-term initiatives?

ysavir 3y ago

Has there been any explanation, from Unity themselves or anyone else, as to why Unity thinks it deserves a cut based on install count? Do installs have to connect to Unity servers to download something? Anything like that? Everything I've seen so far points to no baser an explanation than Unity realizing it had an avenue of attack and deciding to employ it--and an attack is exactly what it is, a raid on other people's business model.

paulddraper 3y ago
"deserves" Do entities (vendors, suppliers, employees) "deserve" to get paid for their costs? Or for the value they add?
- lcnPylGDnU4H9OF 3y ago
  Put another way, does a business fail because it didn't get what it deserved, or does it fail because it got exactly what it deserved?
- ysavir 3y ago
  Repeating my response to a sister comment for visibility: Unity definitely deserves to get paid for the value they provide. But why should that value scale with install count? Doesn't it already charge for licenses to develop the game? There is a big disconnect between "We make tools for game developers" and "we should get revenue share of the game developer's income". In what way does this proposes business model sync up with the value they provide?
cheschire 3y ago
All I can think of is perhaps they feel like their own reputation is under attack for being associated with F2P adware games, and they're trying to mount a defense against that.
ralferoo 3y ago
> Has there been any explanation, from Unity themselves or anyone else, as to why Unity thinks it deserves a cut based on install count? The simplest is that by using Unity, the developer reduces their development costs compared to creating a game without using an engine and the tooling that comes with it. If they don't think the advantages that using Unity gives them is worth $0.20 per copy, they should probably work out how much it'd cost to hire more developers to do the extra work they'd have to do to create their game without Unity.

robswc 3y ago

This really does seem like suicide. I'm not a game dev though. Is there any reason everyone won't/can't just switch to Unreal Engine? Is this a case where they overstepped or is it like reddit where the only leverage the user base has is illusory?

raincole 3y ago
> Is there any reason everyone won't/can't just switch to Unreal Engine? Switching engines mean to rewrite most of your codebase. Actually if you're 1) not using an additional scripting layer or 2) not willing to lose performance, it means to rewrite about... 100% of your codebase.
- robswc 3y ago
  That sucks. I mean, going forward would anyone still start projects with Unity? Or is that ship sailing?
  - raincole 3y ago
    I'm sure any studio with the resource has assigned some workforce to survey the alternatives.
  - starshadowx2 3y ago
    There are a lot of studios and devs now saying they won't use Unity for new projects. Some will be able to switch to new engines, others are just completely cancelling in-progress projects.
ZeWaka 3y ago
Porting is a relatively big issue. Core game systems often intertwine closely with how the engine operates, especially graphics systems like the renderer or particles/effects. It's totally possible though. One of the game projects I help with switched from SFML to Godot to an in-house engine. There's also the 'skilling up' of a dev team. If a studio has developed on Unity for 10 years, switching to Unreal or Godot or similar will be... Challenging.

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Stealthisbook 3y ago

With the phrase 'throwing their toys out of the pram' I immediately knew there was a problem with this article. There might be overblown anxiety over uncertain outcomes related to fees or from developers that would never realistically be affected, but it's totally reasonable to be pissed that terms of service can change retroactively to include both products in development and existing games. Having a Unity based game available for download suddenly becomes an undefined liability that might bite out of nowhere based on it going viral, or even malicious intent.

dwallin 3y ago

It’s not the fact that Unity wants to make more money from its engine that has gotten people so up in arms about it, it’s the way it was structured. If they simply took a percent of revenue, everyone would have shrugged, you might have had some indies complaining, and the world would have kept on turning. Instead, they made a couple of compounding missteps. An install based fee creates a massive amount of uncertainty about how much you will owe at the end of the month, creating potential cash flow issues. You are at the whims of Unity in terms of how they calculate it, and praying that they properly handle all the edge cases and potential abuses, despite all their incentives giving them plenty reasons not to care that much. And then on top of all of that they made it retroactive to all existing games on the market using their engine. Companies had a very reasonable expectation that they could rely on the terms their games were released under. All that trust has now been upended. Unity has shown they are willing to change terms retroactively with little notice. Now when evaluating Unity as an engine you will have to take into account not only the current fee structure, but also the risk that they will add additional fees retroactively that have the potential to completely disrupt your business model.

imbusy111 3y ago
I can see the reversal of previous terms of service getting challenged in court. But that's a lot of effort, of course. Maybe IGDA can take on the challenge. Seems obvious, that if you did not agree to the ToS, you cannot be held accountable.
- starburst 3y ago
  I certainly hope that at least, legally speaking, they would be forced to back down on games built using older version of the unity engine so that previous and upcoming projects aren't affected.
SL61 3y ago
And, if I'm reading the details correctly, it seems like it's going to push developers toward charging recurring subscription fees for their games. If I install a game 20 times in the span of a decade, the devs are being charged over the long term while I only paid once.

fidotron 3y ago

It's not only games. Docker and Arm are two other companies with highly visible challenges, and many more will have them less visibly. Life is so easy when you can throw money around. When you suddenly can't you end up learning what it means to make tough decisions about values.

gmerc 3y ago

Bad take. If the author understood games, he would know that the ecosystem just does not have the capacity to sustain tech like margins. Of course that’s ultimately what Bay Area Companies, especially EA and Unity and their (ex/current CEO) dream off and want to sell their investors but they slept through the part where the tech giants took those margins from the people that initially made them big. Having run multiple P&L for major studios - it’s just not feasible; it’s not a high margin industry like ads, even in mobile and there are many rentseekeers already leeching from developers on mobile: - Apple - Facebook/Tiktok. CPI is massive and entirely unavoidable in mobile precisely because Facebook and Unity have drive commodisation of Games over the last decade. There’s more supply than demand and Facebook sits right in the middle matching it (and increasingly tiktok), pitting Chinese fake game video ads against serious developers. Most independent studios in the world are barely profitable, a stunning number of them are reliant on tax credits. Mobile Gaming is insanely competitive, Apple’s landgrab has destroyed competitiveness of smaller ad solutions who can’t compete with Facebook’s AI powered mitigations. The lucrative China market (China is a mobile gaming exporter and devs are large spenders on ads) has been wingclipped and seen powerful competitors like Tiktok rise. Unity is out of their mind with this move and out of their class on expectations. They went with VCs and sold promises anyone with understanding of games knew you cannot cash. It’s a bit driven game and almost every highly profitable hit game (the top 10 that account for the majority of revenue at any time) is using their own engine. Fun fact: Even in the best times, BioWare’s profitability was highly tied to tax credits. Alberta ramping them down forced during an investment / console cycle for ed the sale to VG Holdings (CEO:John Riccitello) who promptly switched to EA and influenced them to buy his own investment, VG holdings at a 4x ROI. He then instituted various investor focused profitability drives such as the infamous swipe your credit card to reload your gun in battlefield pitch, the Mobile F2P defoliation of Dungeon Keeper and Ultima forever and eventually got fired and went to Unity where he made various deals, including with Facebook that died the moment he got greedy and asked them for ads RevShare which instantly ended the relationship. Tons of other ad tech investments and the occasional molestation charges from fellow C-Level executives followed and neither seem to have not paid off (except for Riccitello Pizza in NY who may be puzzled why they suddenly were the first hits globally on the name after reputation management consultants got dispatched) or they wouldn’t have to start squeezing devs. No, Mr. Riccitello is a very typical CEO on a mission to get very rich as fast as possible by optimizing on short term investor pitches and delusions of joining the ranks of the people he hangs out with in Silicon Valley. Nothing new, the industry is full of these types at the top and they mingle with the people they want to become (See Bobby Kotik dating Sheryl Sandberg which fits so well with her focus on women given the corporate culture he created at Blizzard ). The real crux though is the sudden altering of the deal with little communication, care and expectation settings. This happens because they knew it would not be a good sell, especially internally. Their own people would have rebelled so they black-opsed it without internal consultation of the people actually understanding developers to avoid internal riots and as a result missed every single edge case. What will happen now is mass abandonment of Unity for new projects. Interestingly, AI is reducing the costs of engine changes rather dramatically right now. The timing suggests this was a “shareholders won’t like next quarter and must be placated” emergency ripcord, especially coupled with the stock sales by insiders that have been going into overdrive recently. Low interest party is over - and VCs may find it hard to find a bag holder for Unity. Games is a fickle business. Now Unity is under increased pressure to provide their VCs with a bag-holder exit (sell a growth story to institutional investors to con them into taking the sinking stock off the hands of the VCs. Where have we seen the same pattern recently ... ah, yes, reddit. Same symptoms, same disease. https://venturebeat.com/games/the-ups-and-downs-at-ea-under-fired-ceo-john-riccitiello-and-its-outlook-for-the-future/ https://venturebeat.com/games/the-ups-and-downs-at-ea-under-... https://variety.com/2019/gaming/news/former-unity-exec-files-lawsuit-alleging-ceo-sexually-harassed-hr-others-1203236756/ https://variety.com/2019/gaming/news/former-unity-exec-files... https://www.ign.com/articles/former-ea-ceo-devs-who-dont-focus-on-microtransactions-are-the-biggest-f-idiots https://www.ign.com/articles/former-ea-ceo-devs-who-dont-foc...

jzb 3y ago

Like other folks, I'm disappointed in the author for deliberately misunderstanding the actual scenario here. As I understand it Unity has said it would not do exactly what it has done. This isn't even a "rug-pull" in the sense that people assumed wrongly that Unity wouldn't do these things without explicit assurances. This is a company expressly going back on its word after people have gone all-in on its platform. And the fact that Unity is trying to switch terms out from under people who've already agreed to and planned on different terms. Hashicorp is rightfully getting slammed for abruptly changing licenses, but its community has the final releases under the old licenses to fall back on. With Unity it's a major bait-and-switch. I don't buy the argument that developers shouldn't be angry at Unity. If Unity's model is not profitable or profitable enough there are plenty of ways that it could've approached this that might have been a bit painful but not nearly as harmful.

duped 3y ago

> Meanwhile, time-spent-centric business models mean that games are not competing with just games (like they once used to), but with other entertainment propositions for the limited 24 hours of the day. Yet gaming is winning, it surpassed film and music combined over the last few years. I've been thinking about this a lot the last few days because it doesn't make a ton of sense. They're charging the people who make the least money the highest fees (past a relatively low revenue threshold). Normally you'd do the opposite because the biggest customers have the most to lose and cost the most in maintenance resources. And the other way to make money is to innovate and create products that create more value for your customers, but they're giving them away for free with the new model. That's tacitly admitting they suck (or suck at selling them). The explanation I can think of is that they're hemorrhaging money and the C suite is going to lose their jobs if they don't have cash flow ASAP

starburst 3y ago
Short term cash flow but with a potential future of 0 new projects ever being greenlight using Unity... I guess it is still better than going even deeper into debt short term but the thing is that there is so many more ways they could have done that, yet they seems to have picked the one that ensure them in practice no future at all.
- duped 3y ago
  Unity is selling picks and shovels to a gold rush, but they aren't as good as Epic's. My guess is their reaching into their customers' pockets today to pay for better picks and shovels tomorrow, but they don't know how to do the latter yet only that they know they need the money today.

zzleeper 3y ago

Revenue US$1.39 billion (2022) Operating income US$–882 million (2022) Net income US$–921 million (2022) Total assets US$7.83 billion (2022) Total equity US$3.53 billion (2022) Number of employees 7,703 (2022) (From Wikipedia) Holy F these numbers are tough, sp in a high rate environment. Why would unity need almost 8k employees??

3seashells 3y ago

So.. What if I have one unity instance, installed once, loading other games as package? Nothing gets "installed" engine wise but the app becomes a perma installed store ?