7 ms·

Unity's stock sheds 15% after disappointing earnings

99 points by alwaysal44 3y ago

iqandjoke 3y ago
Unity supports Apple Vision Pro with its visionOS. Not sure if it helps.
falcor84 3y ago
I'm actually surprised it still had any expectations with which to disappoint anyone.
- olliej 3y ago
  I assume it's because MBA folk think layoffs and gouging existing customers with price surges (at least those who "can't easily leave") is a great way to create profits, and MBA folk are the ones the determine stock prices
  - ffsm8 3y ago
    I don't think layoffs are a factor after their caahgrap monetization overhaul last fall. Sure, they've since rolled it back, but nobody in their right mind would ever touch that engine again
  - ffgjgf1 3y ago
    > MBA folk think layoffs What other options they had when they massively overhired during 2020 and 21? At this point 25% is probably not even remotely enough
lazypenguin 3y ago
In 2014 until 20218 I would have started any new game dev project in Unity without a second thought. Somewhere along the way Epic really invested in making Unreal better while the Unity engine became a meme of half-finished new initiatives. It’s still a good engine but I think mostly because it’s riding the very strong core built by its original teams. I’m curious how many of them are still at the company?
- __loam 3y ago
  I switched my project to godot last year and have no regrets
- mjevans 3y ago
  Unity also burned a LOT of good will with the licensing changes we heard about over the past year or two.
Ancalagon 3y ago
yikes hope the layoffs were worth it
datavirtue 3y ago
Is there any possible redemption for a publicly traded company that is on their back foot like this? Seems like this would have been a stellar business without the hassle of going public. How did they fuck this up? All they had to do was keep customers happy and collect money.
- programmarchy 3y ago
  Yes, Apple could bail them out. They might need to because, judging by recent WWDCs, they’ve already placed bets on Unity as the game engine of choice for Apple Vision Pro.
  - refulgentis 3y ago
    After 20 years of thinking "Apple is taking gaming seriously this time!" every 3 years, then getting __excruciatingly__ burned, I've given up. They'll build it before they buy it.
    - programmarchy 3y ago
      Based on how they've backed off SpriteKit and SceneKit, I really don't think they will try to build a game engine. Bringing on the big game developers requires a cross-platform engine. Like Unity, one that can target Nintendo Switch, Xbox, Playstation, etc. Any money they pour into an effort like that would cannibalize sales on their own devices.
  - bmitc 3y ago
    There is zero chance Apple would buy Unity. One programs and scripts in C# and an outdated version of .NET via Mono.
    - programmarchy 3y ago
      Dunno, maybe you're right. I agree the technology choice is very bizarre, but have you noticed the emphasis on Unity in the last two WWDCs? It's clearly the game engine currently "blessed" by Apple. I think there's a confluence of factors driving this. Foremost, they need a way for developers to make games, especially in the AR/VR space. SpriteKit and SceneKit have floundered, and RealityKit is not a complete solution to make games, let alone cross-platform games. They can't show any favor to Unreal Engine, even though it's superior, because of their fight with Epic. I wish they would invest more in something like Godot, but Unity has more marketshare (for now). C# is a great language, and Apple is pragmatic enough to realize the cross-platform potential is much greater than Swift's. From what I've seen, Swift has little traction as a cross-platform tool compared to Mono. Lattner's departure took some wind out of the Swift sails, too.
icegreentea2 3y ago
I expect Unity's stock price will continue to drop for a while. It's my opinion that the adjustments that Unity made (layoffs and the engine license changed) were not just about "pumping the share price". Unity's financials were simply mid to long-term unsustainable - they were spending much more than they were making. Unity is probably overvalued, and if its plans to reshape itself into a viable long-term business, it'll probably have to eat a bunch of share price drops. Taking a quick peek at the Q4 shareholder letter, it doesn't really look like any of their belt tightening has really taken hold yet. 2023 Q4 has broadly similar operating expenses (R&D, S&M and G&A) as 2022 Q4. 2023 Q4 revenue barely up when you exclude the one time WETA release. Overall, Unity is still very much in the red. 2024 will be interesting to see.
- TillE 3y ago
  Cutting expenditures means falling ever further behind Unreal Engine in the long term. Fundamentally I don't think it's a viable business as such, there are too many competitors who don't need to turn a profit solely on their game engine product. I really hope they get acquired sooner rather than later, before they pivot to a stripped-down mobile-only engine or something.
  - suddenclarity 3y ago
    That's based on the assumption that every employee contributed to improving the game engine. They went from 2700 to 7700 employees during the pandemic. They could fire the bottom half of those people and still be way ahead where they were a few years ago. As a hobby game dev using Unity, there are plenty of issues with it. But I doubt hiring more people and throwing more money on it will solve them at this stage.
    - brutus1213 3y ago
      That sounds batshit insane! Why the heck did Unity hire so much???
  - ffgjgf1 3y ago
    To be fair Unity had/has a bunch of other businesses unrelated or marginally related to the engine itself. They went on a spending spree during 2020 and 21 buying random companies left and right. Seems like they are mainly focusing on cutting that.
flohofwoe 3y ago
> ...app-monetization company... I had to check whether they mean the same Unity I know. I could've sworn they're in the game engine business. But maybe this confusion is why the downward trend started in the first place ;)

99 points by alwaysal44 3y ago

iqandjoke 3y ago

Unity supports Apple Vision Pro with its visionOS. Not sure if it helps.

falcor84 3y ago

I'm actually surprised it still had any expectations with which to disappoint anyone.

olliej 3y ago
I assume it's because MBA folk think layoffs and gouging existing customers with price surges (at least those who "can't easily leave") is a great way to create profits, and MBA folk are the ones the determine stock prices
- ffsm8 3y ago
  I don't think layoffs are a factor after their caahgrap monetization overhaul last fall. Sure, they've since rolled it back, but nobody in their right mind would ever touch that engine again
- ffgjgf1 3y ago
  > MBA folk think layoffs What other options they had when they massively overhired during 2020 and 21? At this point 25% is probably not even remotely enough

lazypenguin 3y ago

In 2014 until 20218 I would have started any new game dev project in Unity without a second thought. Somewhere along the way Epic really invested in making Unreal better while the Unity engine became a meme of half-finished new initiatives. It’s still a good engine but I think mostly because it’s riding the very strong core built by its original teams. I’m curious how many of them are still at the company?

__loam 3y ago
I switched my project to godot last year and have no regrets
mjevans 3y ago
Unity also burned a LOT of good will with the licensing changes we heard about over the past year or two.

Ancalagon 3y ago

yikes hope the layoffs were worth it

datavirtue 3y ago

Is there any possible redemption for a publicly traded company that is on their back foot like this? Seems like this would have been a stellar business without the hassle of going public. How did they fuck this up? All they had to do was keep customers happy and collect money.

programmarchy 3y ago
Yes, Apple could bail them out. They might need to because, judging by recent WWDCs, they’ve already placed bets on Unity as the game engine of choice for Apple Vision Pro.
- refulgentis 3y ago
  After 20 years of thinking "Apple is taking gaming seriously this time!" every 3 years, then getting __excruciatingly__ burned, I've given up. They'll build it before they buy it.
  - programmarchy 3y ago
    Based on how they've backed off SpriteKit and SceneKit, I really don't think they will try to build a game engine. Bringing on the big game developers requires a cross-platform engine. Like Unity, one that can target Nintendo Switch, Xbox, Playstation, etc. Any money they pour into an effort like that would cannibalize sales on their own devices.
- bmitc 3y ago
  There is zero chance Apple would buy Unity. One programs and scripts in C# and an outdated version of .NET via Mono.
  - programmarchy 3y ago
    Dunno, maybe you're right. I agree the technology choice is very bizarre, but have you noticed the emphasis on Unity in the last two WWDCs? It's clearly the game engine currently "blessed" by Apple. I think there's a confluence of factors driving this. Foremost, they need a way for developers to make games, especially in the AR/VR space. SpriteKit and SceneKit have floundered, and RealityKit is not a complete solution to make games, let alone cross-platform games. They can't show any favor to Unreal Engine, even though it's superior, because of their fight with Epic. I wish they would invest more in something like Godot, but Unity has more marketshare (for now). C# is a great language, and Apple is pragmatic enough to realize the cross-platform potential is much greater than Swift's. From what I've seen, Swift has little traction as a cross-platform tool compared to Mono. Lattner's departure took some wind out of the Swift sails, too.

icegreentea2 3y ago

I expect Unity's stock price will continue to drop for a while. It's my opinion that the adjustments that Unity made (layoffs and the engine license changed) were not just about "pumping the share price". Unity's financials were simply mid to long-term unsustainable - they were spending much more than they were making. Unity is probably overvalued, and if its plans to reshape itself into a viable long-term business, it'll probably have to eat a bunch of share price drops. Taking a quick peek at the Q4 shareholder letter, it doesn't really look like any of their belt tightening has really taken hold yet. 2023 Q4 has broadly similar operating expenses (R&D, S&M and G&A) as 2022 Q4. 2023 Q4 revenue barely up when you exclude the one time WETA release. Overall, Unity is still very much in the red. 2024 will be interesting to see.

TillE 3y ago
Cutting expenditures means falling ever further behind Unreal Engine in the long term. Fundamentally I don't think it's a viable business as such, there are too many competitors who don't need to turn a profit solely on their game engine product. I really hope they get acquired sooner rather than later, before they pivot to a stripped-down mobile-only engine or something.
- suddenclarity 3y ago
  That's based on the assumption that every employee contributed to improving the game engine. They went from 2700 to 7700 employees during the pandemic. They could fire the bottom half of those people and still be way ahead where they were a few years ago. As a hobby game dev using Unity, there are plenty of issues with it. But I doubt hiring more people and throwing more money on it will solve them at this stage.
  - brutus1213 3y ago
    That sounds batshit insane! Why the heck did Unity hire so much???
- ffgjgf1 3y ago
  To be fair Unity had/has a bunch of other businesses unrelated or marginally related to the engine itself. They went on a spending spree during 2020 and 21 buying random companies left and right. Seems like they are mainly focusing on cutting that.

flohofwoe 3y ago

> ...app-monetization company... I had to check whether they mean the same Unity I know. I could've sworn they're in the game engine business. But maybe this confusion is why the downward trend started in the first place ;)