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Unity Software with a 'company reset' walks away from film VFX and the Wētā Deal

170 points by Keyframe 3y ago

teruakohatu 3y ago
It sounds like Weta FX sold their tooling (Weta Digital) but kept a license to the technology and is able to continue using and developing it, is that right?
- kakali 3y ago
  They also acquired 250 people who they are now laying off and Weta is rehiring. Seems like a disaster of a deal by Unity. Weta just got free money for a snapshot of their code.
  - Jare 3y ago
    Unity apparently had no clue what to do with the toolset when they had the team that built it, you can imagine what they will do with it now without the team. Weta sure isn't re-buying it because they already have it. It's been literally a 1.6B gift to Peter Jackson?
    - qwytw 3y ago
      I understood that they are still keeping the actual Weta "tools" part with it's employees? These 265 are just the people worked in the "professional services" part of the business and were doing actual VFX stuff for Wētā FX and not on the tooling part. Edit: I was wrong, 275 was the entire workforce of Weta Digital when Unity acquired it back in 2021. So yeah.. it seems they just almost literally burnt $1.6 billion..
    - drtgh 3y ago
      I'm not familiarized with those game engines, but the first search showed me that "Unity is more commonly used to develop mobile or 2D games while Unreal is used to create video games on consoles or next-generation PCs." I have no idea, my own speculation as curiosity, but maybe Unity was looking for coding for realistic rendering, know-how, for rise a competence with the Unreal market space? But if it were the case, why let to fly away the team? Maybe was this part of the deal with Weta? to sell an snapshot as the parent comment says, with the pack of programmers for to train Unity's team temporally? I don't know. The numbers are very high, if I were in charge I wouldn't invest that quantity of money without sending firstly a pair of emissaries for to read code and verify the toolset will be useful for the pipeline. PS: The shareholders owe me a few beers for sowing the seeds of doubt.
      - maeln 3y ago
        > but maybe Unity was looking for coding for realistic rendering, know-how, for rise a competence with the Unreal market space? Unity already has a 3d engine that can match Unreal (more or less, and we won't talk about the fact that there is 3 rendering pipeline, and the deprecated one is the only one who is reliable. Really, we won't talk about it). If anything, Unity use to have some of the best realtime-cg engineer under their payroll. The mobile/2D game is mostly historical, a lot of AAA quality game have been made in Unity. VFX is a different beast. For the longest time, realtime CG and VFX/movie CG use to be really two separate field (with a lot of connection ofc, CG is CG). Unreal made wave when they started to be used in cinema (The Mandalorian I think was the first big name openly saying they were using Unreal in their pipeline). Realtime CG got so good that it can (for some specific effect) be used instead of traditional VFX pipeline, which are usually slower to iterate in. I think the exec at Unity saw Unreal "success" and wanted to get a piece of the cake before it was too late. It was not a bad idea, but Unity as been so mismanaged these past few years, it again completely failed at producing anything real, stable and usable.
        shadowgovt 3y ago
        A major difference that is no longer a difference is that VFX used to be about creating visual imagery in the context of a forced perspective with live action shots mixed in. The dynamic background technology being used now for shows like The Mandalorian and Star Trek changed the story. Now VFX teams are being asked to craft the back half of a set as a 3D model that can be blended with live action shot in front of a screen displaying that model to proper perspective based on camera position. So now they have to care about the 3D dynamics of the scene in a way they previously weren't required to... A way that video game engines have been wrestling to ground for decades.
        georgeecollins 3y ago
        This. Virtual production is an incredible savings on the cost of film production. It still has problems and expenses, but there was a huge push toward it during COVID. Film production is a big market world wide. I would also guess that if you have really good technology for virtual production you have tech that is useful for other things, like tele-presence, simulation, image scanning and so forth.
    - coughupalung 3y ago
      I worked for Weta a few years before the acquisition, let me just say that I'm not surprised that Unity didn't know what to do with it. It was never a single DCC set of code, but lots of separate tools (many very old) that only sort-of worked together. I imagine they would have to throw everything out and start over to build something on the level of Maya or Houdini.
      - KaiserPro 3y ago
        I worked in the industry and fairly closely with a number of notable Weta Engineers. I still don't know why you'd spend 1.6billion on a VFX pipeline. I mean sure it gives you cachet, but a lot of the pipeline is mostly asset management rather than the few bits of special sauce that provide artist tooling. but 1.6 billion is a ridiculous amount of money for a company's turnover of ~110million[1], with pretty thin profit margins, compared to a software company. Maybe I'm wrong about weta, they did make mari after all, which is pretty special, however the foundry didn't pay anywhere near that much for mari, for what appears to be a similar licensing deal. [1]https://rocketreach.co/weta-digital-profile_b5c60ffef42e0c50 https://rocketreach.co/weta-digital-profile_b5c60ffef42e0c50
      - shadowgovt 3y ago
        It's always fascinating to me to watch companies do an acquisition of a technical stack that has no pedigree aligned with their own technical stack. Software has shape, and if you're acquiring a stack that's wildly different from your own, there's no guarantee that integration will be particularly feasible. You may not even be acquiring the talent that would know where to start with such an integration because you never know what key pieces of the system were built ages ago by somebody who left long before acquisition was even discussed. I've watched this happen with systems as closely aligned as two Python / JavaScript tech stacks that differed in frameworks, libraries, and wire protocol. It took something like 2 and 1/2 years past executive projections to integrate the offerings.
        alex_suzuki 3y ago
        „Software has shape“ - apt!
  - picadores 3y ago
    Mindless Billions Anywhere at work..
  - mkl 3y ago
    Unity also got a ton of 3D models and assets, and the well-known Wētā Digital name, but yes it is strange to do this.
    - NickNameNick 3y ago
      Looks like the digital trademark will be going back to FX, so unity isn't even keeping that.
eps 3y ago
Dupe - https://news.ycombinator.com/item?id=38453405 https://news.ycombinator.com/item?id=38453405
- slavik81 3y ago
  The fxguide article is the more interesting of the two, as it includes further updates and clarifications from Weta.
rob74 3y ago
> This seems to be a reaction to Unity’s share price ...as are other highly questionable decisions by tech companies lately.
boeingUH60 3y ago
So essentially, Riccitiello gifted $1.6 billion in shares to Weta FX founder Peter Jackson and investor Sean Parker by buying a tool they’re virtually abandoning two years after?
- f6v 3y ago
  You’ve got to admire them for executing the exit strategy perfectly.
- bouvin 3y ago
  That goes some way to explain how Peter Jackson can have such a significant WWI collection [1]. [1] https://youtu.be/7gmZ9X9Aplk https://youtu.be/7gmZ9X9Aplk
dantondwa 3y ago
Unity bought other things that then they just proceeded to close a bit after. Perhaps it was just a strategy to inflate their shares. See for example ArtEngine, which I loved and they just killed after acquiring it. Now I’m so afraid for Parsec.
- sigmoid10 3y ago
  I think the acquisitions were mostly a knee-jerk reaction to Epic's actions. Some execs saw their main competitor buying all these big toys on the shelf and thought they needed to start buying things as well to stay relevant. But I think noone at Unity ever thought about what to do with them other than generating newspaper headlines. Especially buying Weta felt so much like "See?! We can do film VFX too!"
- gmerc 3y ago
  If you know John Riccitello s track record you know this is the root cause
  - throwaway4aday 3y ago
    Wow, reading up on the timeline of events it really looks like he just blew a bunch of cash trying to copy Epic's moves and then tried to boost earnings with that insane pricing change. How can somebody fumble things that badly? Especially since his record with the company isn't all bad with him getting Unity involved with Oculus/Meta, although that was a very self-serving move since he was an early investor in Oculus. Maybe that's it, just self-serving moves that occasionally benefit the company he's heading.
    - gmerc 3y ago
      He was the CEO of president Bioware/Pandemic as part of a VC group he led and was invested in, went to EA, bought the company for almost 1B, laid off the people at pandemic and ran EA into the ground to the point where they fired him.
      - 3y ago
zitterbewegung 3y ago
Are we seeing blowback from the era of cheap money to really high inflation rates or am I just underestimating how many people have to have layoffs after an acquisition wasn't budgeted properly?
- delfinom 3y ago
  Cheap money and incompetent executives that were able to survive using that cheap money. A lot of "business type" individuals were truly kept afloat by just being to finance their dumb ideas on cheap money instead of actually being able to bring profit to the table.
  - qwytw 3y ago
    The thing is that the business would have been perfectly fine without that nonsense. They have a core product which despite all its issues still have real demand it's not bloatware but something you can build a sustainable business on. Had they not massively overhired, stayed at ~1500-2000 employees, focused on the engine itself and not wasted massive amounts of money on acquisitions like this the company would likely already be profitable.
    - thereddaikon 3y ago
      That's not how publicly traded businesses are run. You are not serving the needs of the business. You are serving the needs of the shareholders. Line must go up therefore you need to constantly expand. This incentivizes stupid acquisitions bought on with stock and debt. It does not incentivize focusing on your core businesses and investing in to it.
      - qwytw 3y ago
        > That's not how publicly traded businesses are run That's not necessarily true. There are plenty of examples of public companies which have grown in more sustainable way while prioritizing their core businesses. > You are serving the needs of the shareholders. Line must go up therefore you need to constantly expand. Yet the market did not reward them and the shareholders are not particularly happy. While these pressuresfor public do exist at the end the incompetences of Unity's board and upper management are to blame.
gonzo41 3y ago
This seems like a great way to destroy trust for a decade.
sfjailbird 3y ago
If you look at a company's shares as their real product, then a lot of these kinds of maneuvers start to make sense. I learned this from HBO's Silicon Valley, btw...
- qwytw 3y ago
  Then they even failed at that. Unity stock price peaked in late 2021 due to the general tech bubble and the whole "Metaverse" thing specifically. The Wētā deal was announced a month or two earlier and probably had no real effect. It was downhill ever since...
  - pavlov 3y ago
    Insider stock lockups expire typically 6-12 months after the IPO, which in Unity's case was in September 2020. So in fact the peak of Unity's stock was perfectly timed to allow insiders to sell their shares at those inflated prices. I know personally someone who made closer to $10 million on Unity stock. If the IPO had been two years later, the stock would have been worth only a few million. (Or perhaps more likely not liquid at all, since Unity is the kind of company that would have no chance of an IPO in the current environment.) That's a life-changing difference.
- avisser 3y ago
  It should include getting rid of the executives who thought this was a good idea in the first place then. Otherwise it seems like "I might have thought you were incompetent, but now you've proven it" moment.
yawpitch 3y ago
Having once been on the pipeline team at Weta Digital I know a lot of these people personally… here’s hoping this really scary moment for them plays out well, and doesn’t completely upend their lives.
bmikaili 3y ago
Unity will die or be replaced by the end of the century. Once people swarm on AR/VR apps and realize how annoying it is to develop things using Unity Editor, at least compared to the luxury of web dev, some alternative will have to pick up from there.
- lupusreal 3y ago
  By the end of the century? Not exactly a bold prediction, that's 77 years away.
- wildpeaks 3y ago
  "By the end of the century" ? Yeah that seems like a pretty safe bet, I sure hope a lot of things will have changed (hopefully for the better) by then.
- Maakuth 3y ago
  Given that there's still close to 80 years of the century left, this strikes me as a safe bet.
- Waterluvian 3y ago
  I think there’s a common misunderstanding among programmers about what game dev is like and who is involved. It’s mostly not about programming. Which is why the engines all have rich UIs first, text editors second.
- mitrevf 3y ago
  Comparing 3D development to web shows depth of knowledge in this. Are you a frontend web developer ? After apple broke out with Epic and Unreal is mostly AAA development, Unity is the de-facto standard for smaller indie development and MR development too (even for Quest). Divesting movies is because of profitability issues, otherwise the engine is well suited for 3d effeects and such
- steezeburger 3y ago
  Luxury of web dev?! I'm not sure I agree it's luxurious.
- 3y ago
TruthWillHurt 3y ago
This actually a good move. Focus on games rather than attempt to compete in VFX sector. The Billion dollar acquisition was probably driven by megalomaniac ex-CEO, wanting a piece of every pie and world domination.
- xbar 3y ago
  No. It was a company who saw Unreal turn the Star Wars property Mandalorian into a profitable success. Someone thought Unity+WETA would be competitive/compelling.
  - Auracle 3y ago
    Well, it could have been, but they would actually need to work on both sides to make it work.
  - deleted 3y ago
    [deleted]
AndrewKemendo 3y ago
What a joke I was there when the acquisition happened and it was both “yay” and “what?” There was so little communication with the overall staff - even at the M9 level - and the management seemed to be doing their own thing. My prediction: Unity is going to be BedBath&Beyonded
- DarkNova6 3y ago
  I don't know about "BedBath&Beyond". Would you mind to elaborate for those of us who don't know? :-)
  - pmontra 3y ago
    Maybe this https://en.wikipedia.org/wiki/Bed_Bath_%26_Beyond https://en.wikipedia.org/wiki/Bed_Bath_%26_Beyond
    - javajosh 3y ago
      what a sad story. It's an interesting tale oddly in favor of letting nepotism happen. The story definitely reads like some activist investors righteously decapitated the company for nepotism, but then were left with a dead body.
      - MakeThemMoney 3y ago
        Is it really in favour of nepotism? I see nepotism in this case as incidental. They could have restructured the company for the lulz, and still get the same result.
    - ethbr1 3y ago
      The things you miss... I wasn't even aware they'd disappeared. That history is some reading! When your CFO tragically jumps off a balcony, the company might not be doing well. Why do so many big box stores seem to follow the huge growth -> saturation -> quick implosion and bankruptcy script? Surely their margins don't materially change? Low per store sales from bad stores? But the first step seems to be closing stores, and that doesn't resolve the issue. It seems weird they'd be able to attract capital for expansion, but then implode so quickly.
rybosworld 3y ago
How John Riccitiello kept the top job for so long is a mystery. This acquisition never made sense.
- georgeecollins 3y ago
  It makes a lot of sense to me, they just didn't execute. There is a huge blending of VFX technology and video games and always has been. Old person story: I remember interviewing an artist at Pandemic Studios (an old video game company in Los Angeles) and the artist's reel just had a shot from "Titanic" which was new then. "That's just a shot of a man walking across the deck of a ship, what did you do." "I animated the man." I was dumbfounded. At that point our 3d graphics looked worse than Minecraft and I had no idea what CG they were sticking into practical shots. (edited for spelling and I didn't catch all the errors I am sure)
  - rybosworld 3y ago
    The reason I don't think it made sense is because the value of the acquisition depended on integrating Weta into the Unity software. They marketed it as: "use all of Weta's tooling in Unity". 2 years later and that never happened. I would guess that's because it's quite difficult to jam a software platform into another software platform. Unity has a long history: > 1) acquire some software/tech > 2) attempt to integrate (force) it into Unity > 3) fail > 4) scrap the integration Based on what I've heard about how Unity operated under John R, this was likely a scenario where the head honchos recognized a business synergy and didn't consult the engineers on how feasible integration would be.
debacle 3y ago
I have been revisiting Godot this past week after feeling that I didn't give it a fair shake a few months ago. I don't know that Unity has a future. Unity is still better than Godot, and in some ways by a wide margin, but Godot is gaining ground fast, the learning/tooling ecosystem has exploded in the last several months, and for most "indie" projects, which Unity's pricing change was targeting, Godot is the better choice. It might be the best open source tool I've ever worked with. Unity is going to either need to position itself at the top of the productivity curve between Unreal's raw power and Godot's "Blenderyness," or it's going to have to become a more mature ecosystem that caters to bigger games (which might be harder after the brand damage). Godot is going to become better, faster in the next 18-24 months.
- shadowgovt 3y ago
  How is Godot on cross-platform targeting these days? To me, the most attractive aspect of Unity's offering was the opportunity to port the same game core and assets to multiple targets with relatively little retooling.
  - coffeebeqn 3y ago
    That’s where open source gets tricky. Most platforms like iPhone or PlayStation are closed ecosystems and require you to make legal contracts with them to develop and release on them
    - tapoxi 3y ago
      Godot can export to iOS/Android just fine, the consoles are an issue because their SDKs are behind an NDA. I wonder why they still do that, seems like it only hamstrings developers.
      - shadowgovt 3y ago
        That's actually why. Tl;dr the console owners want the system to be a little bit legally and technically complicated because they only want to developers that have legal and technical competency making product for their consoles. The implosion of the home console ecosystem in the United States between Atari and Nintendo is widely understood to have been caused by Atari giving up or losing the capacity to regulate who made games for their console and the quality of those games. As a result, the need for consumers to exercise their own savviness in finding the good ones went up, but rather than rise to the challenge, consumers just threw up their hands and stopped buying Atari home consoles and the games that went with them. The lesson the whole industry learned is that they're selling a luxury product and they need to control quality to keep it a luxury product. Development ecosystems where anybody can write games of whatever quality are relegated to the home computer space, where the console providers (as console providers) are content to compete minimally.
KaiserPro 3y ago
So one interesting thing to note here, is that it appears that it was a licensing deal. Weta proper still appears to have access to thier tooling, and is isolated from unity pulling out. The Foundry, who are a VFX based version of Adobe/Autodesk have a similar style of working, but not at such a massivly inflated scale. They negotiate license agreements to take over tools from VFX companies and extend them for sale to others. (nuke, is from Digital Domain, Mari from Weta, Katana & Flix from sony) However they never spaffed 1.6billion for a complete pipeline. Partly because they could never raise that much cash, the market isn't anywhere big enough to support that, but also VFX pipelines are incredibly bespoke and mostly ephemeral. I'm willing to bet that most of the stuff Unity bought was glue code for getting assets in and out of off the shelf software. The rest is managing billions of versions of individual files. (Weta people, please jump in and correct me) Sure there are special bits of rnd that allow procedural generation, or better marker->3d model tracking, but not 1.6 billion and 250 people. The "tooling" team of weta original was never more than 60 people from what I understand.
- kaveh808 3y ago
  I hope for the sake of my former colleagues at Weta that those transferred to Unity can simply be transferred back to Weta. The point of production pipelines being bespoke (at least past a certain company size) is a relevant one. The main workhorses of large scale production (Maya, Houdini, Nuke, etc.) are extremely customizable and extensible. Over years (decades in the case of Weta) companies develop highly complex workflows and associated tools based on these applications. That is why the Unity deal never really made sense to me. The idea that Weta's tools could somehow be packaged up and delivered as essentially shrink-wrapped consumer-level add-ons to Unity was a naive one at best. I'm not entirely surprised to see it fall apart.
HlessClaudesman 3y ago
The Weta deal only made sense to me as a "me to" gambit, in order to ape Epic's lucrative push into film and TV. Mobile game developers don't need Weta tech.
deleted 3y ago
[deleted]
sylware 3y ago
So weta is 275 engineers + staff, unity said 268 have to go. Am I right?
myth_drannon 3y ago
I wonder if the massive jump in Autodesk's stock price is related to Unity news. Weta tools sort of compete with some of Autodesk's products in the VFX space.

170 points by Keyframe 3y ago

It sounds like Weta FX sold their tooling (Weta Digital) but kept a license to the technology and is able to continue using and developing it, is that right?

kakali 3y ago
They also acquired 250 people who they are now laying off and Weta is rehiring. Seems like a disaster of a deal by Unity. Weta just got free money for a snapshot of their code.
- Jare 3y ago
  Unity apparently had no clue what to do with the toolset when they had the team that built it, you can imagine what they will do with it now without the team. Weta sure isn't re-buying it because they already have it. It's been literally a 1.6B gift to Peter Jackson?
  - qwytw 3y ago
    I understood that they are still keeping the actual Weta "tools" part with it's employees? These 265 are just the people worked in the "professional services" part of the business and were doing actual VFX stuff for Wētā FX and not on the tooling part. Edit: I was wrong, 275 was the entire workforce of Weta Digital when Unity acquired it back in 2021. So yeah.. it seems they just almost literally burnt $1.6 billion..
  - drtgh 3y ago
    I'm not familiarized with those game engines, but the first search showed me that "Unity is more commonly used to develop mobile or 2D games while Unreal is used to create video games on consoles or next-generation PCs." I have no idea, my own speculation as curiosity, but maybe Unity was looking for coding for realistic rendering, know-how, for rise a competence with the Unreal market space? But if it were the case, why let to fly away the team? Maybe was this part of the deal with Weta? to sell an snapshot as the parent comment says, with the pack of programmers for to train Unity's team temporally? I don't know. The numbers are very high, if I were in charge I wouldn't invest that quantity of money without sending firstly a pair of emissaries for to read code and verify the toolset will be useful for the pipeline. PS: The shareholders owe me a few beers for sowing the seeds of doubt.
    - maeln 3y ago
      > but maybe Unity was looking for coding for realistic rendering, know-how, for rise a competence with the Unreal market space? Unity already has a 3d engine that can match Unreal (more or less, and we won't talk about the fact that there is 3 rendering pipeline, and the deprecated one is the only one who is reliable. Really, we won't talk about it). If anything, Unity use to have some of the best realtime-cg engineer under their payroll. The mobile/2D game is mostly historical, a lot of AAA quality game have been made in Unity. VFX is a different beast. For the longest time, realtime CG and VFX/movie CG use to be really two separate field (with a lot of connection ofc, CG is CG). Unreal made wave when they started to be used in cinema (The Mandalorian I think was the first big name openly saying they were using Unreal in their pipeline). Realtime CG got so good that it can (for some specific effect) be used instead of traditional VFX pipeline, which are usually slower to iterate in. I think the exec at Unity saw Unreal "success" and wanted to get a piece of the cake before it was too late. It was not a bad idea, but Unity as been so mismanaged these past few years, it again completely failed at producing anything real, stable and usable.
      - shadowgovt 3y ago
        A major difference that is no longer a difference is that VFX used to be about creating visual imagery in the context of a forced perspective with live action shots mixed in. The dynamic background technology being used now for shows like The Mandalorian and Star Trek changed the story. Now VFX teams are being asked to craft the back half of a set as a 3D model that can be blended with live action shot in front of a screen displaying that model to proper perspective based on camera position. So now they have to care about the 3D dynamics of the scene in a way they previously weren't required to... A way that video game engines have been wrestling to ground for decades.
        georgeecollins 3y ago
        This. Virtual production is an incredible savings on the cost of film production. It still has problems and expenses, but there was a huge push toward it during COVID. Film production is a big market world wide. I would also guess that if you have really good technology for virtual production you have tech that is useful for other things, like tele-presence, simulation, image scanning and so forth.
  - coughupalung 3y ago
    I worked for Weta a few years before the acquisition, let me just say that I'm not surprised that Unity didn't know what to do with it. It was never a single DCC set of code, but lots of separate tools (many very old) that only sort-of worked together. I imagine they would have to throw everything out and start over to build something on the level of Maya or Houdini.
    - KaiserPro 3y ago
      I worked in the industry and fairly closely with a number of notable Weta Engineers. I still don't know why you'd spend 1.6billion on a VFX pipeline. I mean sure it gives you cachet, but a lot of the pipeline is mostly asset management rather than the few bits of special sauce that provide artist tooling. but 1.6 billion is a ridiculous amount of money for a company's turnover of ~110million[1], with pretty thin profit margins, compared to a software company. Maybe I'm wrong about weta, they did make mari after all, which is pretty special, however the foundry didn't pay anywhere near that much for mari, for what appears to be a similar licensing deal. [1]https://rocketreach.co/weta-digital-profile_b5c60ffef42e0c50 https://rocketreach.co/weta-digital-profile_b5c60ffef42e0c50
    - shadowgovt 3y ago
      It's always fascinating to me to watch companies do an acquisition of a technical stack that has no pedigree aligned with their own technical stack. Software has shape, and if you're acquiring a stack that's wildly different from your own, there's no guarantee that integration will be particularly feasible. You may not even be acquiring the talent that would know where to start with such an integration because you never know what key pieces of the system were built ages ago by somebody who left long before acquisition was even discussed. I've watched this happen with systems as closely aligned as two Python / JavaScript tech stacks that differed in frameworks, libraries, and wire protocol. It took something like 2 and 1/2 years past executive projections to integrate the offerings.
      - alex_suzuki 3y ago
        „Software has shape“ - apt!
- picadores 3y ago
  Mindless Billions Anywhere at work..
- mkl 3y ago
  Unity also got a ton of 3D models and assets, and the well-known Wētā Digital name, but yes it is strange to do this.
  - NickNameNick 3y ago
    Looks like the digital trademark will be going back to FX, so unity isn't even keeping that.

eps 3y ago

Dupe - https://news.ycombinator.com/item?id=38453405 https://news.ycombinator.com/item?id=38453405

slavik81 3y ago
The fxguide article is the more interesting of the two, as it includes further updates and clarifications from Weta.

rob74 3y ago

> This seems to be a reaction to Unity’s share price ...as are other highly questionable decisions by tech companies lately.

boeingUH60 3y ago

So essentially, Riccitiello gifted $1.6 billion in shares to Weta FX founder Peter Jackson and investor Sean Parker by buying a tool they’re virtually abandoning two years after?

f6v 3y ago
You’ve got to admire them for executing the exit strategy perfectly.
bouvin 3y ago
That goes some way to explain how Peter Jackson can have such a significant WWI collection [1]. [1] https://youtu.be/7gmZ9X9Aplk https://youtu.be/7gmZ9X9Aplk

dantondwa 3y ago

Unity bought other things that then they just proceeded to close a bit after. Perhaps it was just a strategy to inflate their shares. See for example ArtEngine, which I loved and they just killed after acquiring it. Now I’m so afraid for Parsec.

sigmoid10 3y ago
I think the acquisitions were mostly a knee-jerk reaction to Epic's actions. Some execs saw their main competitor buying all these big toys on the shelf and thought they needed to start buying things as well to stay relevant. But I think noone at Unity ever thought about what to do with them other than generating newspaper headlines. Especially buying Weta felt so much like "See?! We can do film VFX too!"
gmerc 3y ago
If you know John Riccitello s track record you know this is the root cause
- throwaway4aday 3y ago
  Wow, reading up on the timeline of events it really looks like he just blew a bunch of cash trying to copy Epic's moves and then tried to boost earnings with that insane pricing change. How can somebody fumble things that badly? Especially since his record with the company isn't all bad with him getting Unity involved with Oculus/Meta, although that was a very self-serving move since he was an early investor in Oculus. Maybe that's it, just self-serving moves that occasionally benefit the company he's heading.
  - gmerc 3y ago
    He was the CEO of president Bioware/Pandemic as part of a VC group he led and was invested in, went to EA, bought the company for almost 1B, laid off the people at pandemic and ran EA into the ground to the point where they fired him.
    - 3y ago

zitterbewegung 3y ago

Are we seeing blowback from the era of cheap money to really high inflation rates or am I just underestimating how many people have to have layoffs after an acquisition wasn't budgeted properly?

delfinom 3y ago
Cheap money and incompetent executives that were able to survive using that cheap money. A lot of "business type" individuals were truly kept afloat by just being to finance their dumb ideas on cheap money instead of actually being able to bring profit to the table.
- qwytw 3y ago
  The thing is that the business would have been perfectly fine without that nonsense. They have a core product which despite all its issues still have real demand it's not bloatware but something you can build a sustainable business on. Had they not massively overhired, stayed at ~1500-2000 employees, focused on the engine itself and not wasted massive amounts of money on acquisitions like this the company would likely already be profitable.
  - thereddaikon 3y ago
    That's not how publicly traded businesses are run. You are not serving the needs of the business. You are serving the needs of the shareholders. Line must go up therefore you need to constantly expand. This incentivizes stupid acquisitions bought on with stock and debt. It does not incentivize focusing on your core businesses and investing in to it.
    - qwytw 3y ago
      > That's not how publicly traded businesses are run That's not necessarily true. There are plenty of examples of public companies which have grown in more sustainable way while prioritizing their core businesses. > You are serving the needs of the shareholders. Line must go up therefore you need to constantly expand. Yet the market did not reward them and the shareholders are not particularly happy. While these pressuresfor public do exist at the end the incompetences of Unity's board and upper management are to blame.

gonzo41 3y ago

This seems like a great way to destroy trust for a decade.

sfjailbird 3y ago

If you look at a company's shares as their real product, then a lot of these kinds of maneuvers start to make sense. I learned this from HBO's Silicon Valley, btw...

qwytw 3y ago
Then they even failed at that. Unity stock price peaked in late 2021 due to the general tech bubble and the whole "Metaverse" thing specifically. The Wētā deal was announced a month or two earlier and probably had no real effect. It was downhill ever since...
- pavlov 3y ago
  Insider stock lockups expire typically 6-12 months after the IPO, which in Unity's case was in September 2020. So in fact the peak of Unity's stock was perfectly timed to allow insiders to sell their shares at those inflated prices. I know personally someone who made closer to $10 million on Unity stock. If the IPO had been two years later, the stock would have been worth only a few million. (Or perhaps more likely not liquid at all, since Unity is the kind of company that would have no chance of an IPO in the current environment.) That's a life-changing difference.
avisser 3y ago
It should include getting rid of the executives who thought this was a good idea in the first place then. Otherwise it seems like "I might have thought you were incompetent, but now you've proven it" moment.

yawpitch 3y ago

Having once been on the pipeline team at Weta Digital I know a lot of these people personally… here’s hoping this really scary moment for them plays out well, and doesn’t completely upend their lives.

bmikaili 3y ago

Unity will die or be replaced by the end of the century. Once people swarm on AR/VR apps and realize how annoying it is to develop things using Unity Editor, at least compared to the luxury of web dev, some alternative will have to pick up from there.

lupusreal 3y ago
By the end of the century? Not exactly a bold prediction, that's 77 years away.
wildpeaks 3y ago
"By the end of the century" ? Yeah that seems like a pretty safe bet, I sure hope a lot of things will have changed (hopefully for the better) by then.
Maakuth 3y ago
Given that there's still close to 80 years of the century left, this strikes me as a safe bet.
Waterluvian 3y ago
I think there’s a common misunderstanding among programmers about what game dev is like and who is involved. It’s mostly not about programming. Which is why the engines all have rich UIs first, text editors second.
mitrevf 3y ago
Comparing 3D development to web shows depth of knowledge in this. Are you a frontend web developer ? After apple broke out with Epic and Unreal is mostly AAA development, Unity is the de-facto standard for smaller indie development and MR development too (even for Quest). Divesting movies is because of profitability issues, otherwise the engine is well suited for 3d effeects and such
steezeburger 3y ago
Luxury of web dev?! I'm not sure I agree it's luxurious.
3y ago

TruthWillHurt 3y ago

This actually a good move. Focus on games rather than attempt to compete in VFX sector. The Billion dollar acquisition was probably driven by megalomaniac ex-CEO, wanting a piece of every pie and world domination.

xbar 3y ago
No. It was a company who saw Unreal turn the Star Wars property Mandalorian into a profitable success. Someone thought Unity+WETA would be competitive/compelling.
- Auracle 3y ago
  Well, it could have been, but they would actually need to work on both sides to make it work.
- deleted 3y ago
  [deleted]

AndrewKemendo 3y ago

What a joke I was there when the acquisition happened and it was both “yay” and “what?” There was so little communication with the overall staff - even at the M9 level - and the management seemed to be doing their own thing. My prediction: Unity is going to be BedBath&Beyonded

DarkNova6 3y ago
I don't know about "BedBath&Beyond". Would you mind to elaborate for those of us who don't know? :-)
- pmontra 3y ago
  Maybe this https://en.wikipedia.org/wiki/Bed_Bath_%26_Beyond https://en.wikipedia.org/wiki/Bed_Bath_%26_Beyond
  - javajosh 3y ago
    what a sad story. It's an interesting tale oddly in favor of letting nepotism happen. The story definitely reads like some activist investors righteously decapitated the company for nepotism, but then were left with a dead body.
    - MakeThemMoney 3y ago
      Is it really in favour of nepotism? I see nepotism in this case as incidental. They could have restructured the company for the lulz, and still get the same result.
  - ethbr1 3y ago
    The things you miss... I wasn't even aware they'd disappeared. That history is some reading! When your CFO tragically jumps off a balcony, the company might not be doing well. Why do so many big box stores seem to follow the huge growth -> saturation -> quick implosion and bankruptcy script? Surely their margins don't materially change? Low per store sales from bad stores? But the first step seems to be closing stores, and that doesn't resolve the issue. It seems weird they'd be able to attract capital for expansion, but then implode so quickly.

rybosworld 3y ago

How John Riccitiello kept the top job for so long is a mystery. This acquisition never made sense.

georgeecollins 3y ago
It makes a lot of sense to me, they just didn't execute. There is a huge blending of VFX technology and video games and always has been. Old person story: I remember interviewing an artist at Pandemic Studios (an old video game company in Los Angeles) and the artist's reel just had a shot from "Titanic" which was new then. "That's just a shot of a man walking across the deck of a ship, what did you do." "I animated the man." I was dumbfounded. At that point our 3d graphics looked worse than Minecraft and I had no idea what CG they were sticking into practical shots. (edited for spelling and I didn't catch all the errors I am sure)
- rybosworld 3y ago
  The reason I don't think it made sense is because the value of the acquisition depended on integrating Weta into the Unity software. They marketed it as: "use all of Weta's tooling in Unity". 2 years later and that never happened. I would guess that's because it's quite difficult to jam a software platform into another software platform. Unity has a long history: > 1) acquire some software/tech > 2) attempt to integrate (force) it into Unity > 3) fail > 4) scrap the integration Based on what I've heard about how Unity operated under John R, this was likely a scenario where the head honchos recognized a business synergy and didn't consult the engineers on how feasible integration would be.

debacle 3y ago

I have been revisiting Godot this past week after feeling that I didn't give it a fair shake a few months ago. I don't know that Unity has a future. Unity is still better than Godot, and in some ways by a wide margin, but Godot is gaining ground fast, the learning/tooling ecosystem has exploded in the last several months, and for most "indie" projects, which Unity's pricing change was targeting, Godot is the better choice. It might be the best open source tool I've ever worked with. Unity is going to either need to position itself at the top of the productivity curve between Unreal's raw power and Godot's "Blenderyness," or it's going to have to become a more mature ecosystem that caters to bigger games (which might be harder after the brand damage). Godot is going to become better, faster in the next 18-24 months.

shadowgovt 3y ago
How is Godot on cross-platform targeting these days? To me, the most attractive aspect of Unity's offering was the opportunity to port the same game core and assets to multiple targets with relatively little retooling.
- coffeebeqn 3y ago
  That’s where open source gets tricky. Most platforms like iPhone or PlayStation are closed ecosystems and require you to make legal contracts with them to develop and release on them
  - tapoxi 3y ago
    Godot can export to iOS/Android just fine, the consoles are an issue because their SDKs are behind an NDA. I wonder why they still do that, seems like it only hamstrings developers.
    - shadowgovt 3y ago
      That's actually why. Tl;dr the console owners want the system to be a little bit legally and technically complicated because they only want to developers that have legal and technical competency making product for their consoles. The implosion of the home console ecosystem in the United States between Atari and Nintendo is widely understood to have been caused by Atari giving up or losing the capacity to regulate who made games for their console and the quality of those games. As a result, the need for consumers to exercise their own savviness in finding the good ones went up, but rather than rise to the challenge, consumers just threw up their hands and stopped buying Atari home consoles and the games that went with them. The lesson the whole industry learned is that they're selling a luxury product and they need to control quality to keep it a luxury product. Development ecosystems where anybody can write games of whatever quality are relegated to the home computer space, where the console providers (as console providers) are content to compete minimally.

KaiserPro 3y ago

So one interesting thing to note here, is that it appears that it was a licensing deal. Weta proper still appears to have access to thier tooling, and is isolated from unity pulling out. The Foundry, who are a VFX based version of Adobe/Autodesk have a similar style of working, but not at such a massivly inflated scale. They negotiate license agreements to take over tools from VFX companies and extend them for sale to others. (nuke, is from Digital Domain, Mari from Weta, Katana & Flix from sony) However they never spaffed 1.6billion for a complete pipeline. Partly because they could never raise that much cash, the market isn't anywhere big enough to support that, but also VFX pipelines are incredibly bespoke and mostly ephemeral. I'm willing to bet that most of the stuff Unity bought was glue code for getting assets in and out of off the shelf software. The rest is managing billions of versions of individual files. (Weta people, please jump in and correct me) Sure there are special bits of rnd that allow procedural generation, or better marker->3d model tracking, but not 1.6 billion and 250 people. The "tooling" team of weta original was never more than 60 people from what I understand.

kaveh808 3y ago
I hope for the sake of my former colleagues at Weta that those transferred to Unity can simply be transferred back to Weta. The point of production pipelines being bespoke (at least past a certain company size) is a relevant one. The main workhorses of large scale production (Maya, Houdini, Nuke, etc.) are extremely customizable and extensible. Over years (decades in the case of Weta) companies develop highly complex workflows and associated tools based on these applications. That is why the Unity deal never really made sense to me. The idea that Weta's tools could somehow be packaged up and delivered as essentially shrink-wrapped consumer-level add-ons to Unity was a naive one at best. I'm not entirely surprised to see it fall apart.

HlessClaudesman 3y ago

The Weta deal only made sense to me as a "me to" gambit, in order to ape Epic's lucrative push into film and TV. Mobile game developers don't need Weta tech.

deleted 3y ago

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sylware 3y ago

So weta is 275 engineers + staff, unity said 268 have to go. Am I right?

myth_drannon 3y ago

I wonder if the massive jump in Autodesk's stock price is related to Unity news. Weta tools sort of compete with some of Autodesk's products in the VFX space.