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Comment by starburst | Hacker News Reader

That is the problem, and what is completely baffling, games that are sold at 70$ means they pay a ridiculously low fee (%) compared to cheap or free to play mobile games where that fee means it can render the game unprofitable and need to be shutdown, yet with a reasonable % of the revenue they would be able to be profitable and everyone makes money.

Big company selling big games will see this as a rounding error in their revenue. Indies / small company will probably need to shutdown some games because this won't be profitable...

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> Indies / small company will probably need to shutdown some games

Are they giving away their games for free (so this shouldn't(?) affect them)?

Or or have about $1-2 revenue per user or less and over overall $200k revenue?

Maybe you're not familiar with the economics of f2p mobile games, but basically, the game is free, you get maybe 100k installs and make back 25k$ (IAP, etc.) so revenue of 0.25$ per user. But then you have to pay for users acquisition (marketing to get installs) so the actual revenue is more like 0.19$ per user (still profitable!) BUT then I have to pay 0.20$ for any installs regardless of it made any money, so I'm effectively at a loss -0.01$ per user when I could've been profitable.

I made up the number up but you get the idea. With a % of revenue share (or at the very least do not count installs that generated 0$ revenue) it could be a profitable game, now it risks of being shutdown.

> 0.25$ per user

I assumed than US/CAN/etc. user would be worth much more than that?

> marketing to get installs

Not sure how accurate, since this was on the first page I googled:

"Average mobile app CPI – $0.93 (APAC), $1.03 (EMEA), $0.34 (Latin America), $5.28 (North America)" but would imply that those numbers are no realistic.

All Latin America and most Asian (outside Japan and SK) and significant proportion of EMEA users would only cost $0.02 per install. And the users you have to pay $0.20 for are likely to be generating significantly more ad/IAP revenue for you than the rest.

But yeah, if you can't get to $1-2 even for NA/etc. users are you're actually selling your game for $1-2 the 20 cent fee seems pretty extreme.

Not sure I understand? I just made those number up to give you an example, be it realistic or not hardly matters. You get X per user and it cost you Y per user and Unity take Z per user. Now `X - Y` is profitable but `X - Y - Z` is not, that's it. If it was instead a % at least it would still be profitable if only less, it doesn't put the revenue per user in jeopardy of being in the negative.

Plenty of games are profitable at scale with only a few pennies per user.

> I just made those number up to give you an example, be it realistic or not hardly matters

That's pretty much the only thing that matters. there is a huge difference whether they make $0.5, $1 or $2 etc (and especially how much more do they make per user in a "rich" country since Unity seems to think that they are worth up to 10x more than everyone else.

> Plenty of games are profitable at scale with only a few pennies per user.

Beyond a certain point (over 1 mill users) it will only cost $0.01 per install. So this will affect 1-5 dev/worker studios with very low revenue per user. They could still probably just pay ~2k for Unity Pro per seat and stay under the 1 million revenue threshold.

To me it almost seems that the '$0.20 per install' is only there to encourage developers to upgrade to pro if they have more than a few hundred k. users.

> If it was instead a %

True, I'm not arguing that wouldn't be more fair. It would be quite expensive to enforce and close to impossible in certain cases. So I understand why Unity chose to do this instead.

> That's pretty much the only thing that matters. there is a huge difference whether they make $0.5, $1 or $2 etc

My point is those numbers can vary GREATLY from games to games, and not only the revenue per user but the cost of user acquisition as well. There isn't one truth, the numbers I gave up could very well fit a real project.

Of course you would be pretty stupid to not subscribe to Pro once you notice your game going to 200k. And let's be real, at 1M$ threshold, if the Unity tax is what kill your game, maybe there wasn't a market fit. But it just feel such a bad and unfair way to generate revenue on free to play games.

> So I understand why Unity chose to do this instead.

Other engines does it just fine, tracking installs (without any false positive) seems a much bigger hassle especially legal wise

> Other engines does it just fine,

I'm not sure that's comparable or even true. No other proprietary engine has as even remotely comparable market share in the freemium/Ad/IAP-funded/shovelware mobile game market.

Also Epic isn't trying to pay for 8000 employees (especially not just with their engine revenue) or service billion in debt accrued from (possibly unnecessary) acquisitions. It feels to me that Unity pushed themselves into a corner by increasing and don't really have any choices but to try and maximize their revenue any way they can.

e.g. Epic seems to have about 4000 employees and compared to Fortnite Unreal seems to almost be just a side gig for them.

Also let's be fair a 5% royalty would be much more likely to scare off their best paying customers. And looking at their current leadership and overall philosophy I find it easy to understand why they might not care that much what will happen to some indy/small developers who can't afford/don't want to pay for Pro or have more than 1 million users but can't generate more than ~$0.2 - 0.5 in profit per install.

I get that, but I feel like there must've been a much better way to do so than with this proposal that seems to have burn the last remaining goodwill that developers had left in Unity and making sure most future projects won't get done on Unity.

A lot of people have been thinking about switching for years, Unity is becoming slower and slower with time, more buggier, etc. I feel like this is the tipping point where the number of developpers is going to go down, so was it worth it? Maybe, maybe it was the correct decision, time will tell.

I'll still continue to use it for on-going projects I have and pay the tax no problem, but I won't pick it for any project in the future personnaly because of how out of touch and ridiculous I personaly feel this business decision is (and other decisions they've made).

I get why would people be opposed to these changes on a more "philosophical" level (and I think I am) but I'm not sure that much changes financially for most developers who make less than 1 million in revenue per game (and they overall seem to be somewhat fair(ish) in relation to what Unity provides and compared to 30% storefront fees or what ad companies skim):

- If your company was making over $200k you already couldn't be on Personal/Plus and would have had to upgrade to Pro, so the $0.2 fee seems irrelevant.

- The current limit is based on company's entire revenue, it seems they changed it to per game? If so you're actually now better off if you have many games which make about $100k or so.

- The only issues I see is that if there is huge unexpected surge in downloads/sales which might leave with a large bill (which you could've mostly avoided by upgrading to Pro in advance). Which is not the most unlikely scenario.

You sold you game for a fixed fee to Apple/MS/etc. (Gamepass, Arcade..). I doubt many games there cost less than 200k (thought I don't really know)? So you're probably on Pro. But if your overall revenue for the game is over $1 million you'd still be on the the hook to pay for additional downloads (above 1 mil) with zero increase in revenue..

the average is skewed by games like Genshin Impact with gross exploitative monetization, not to mention literal casino games. So smaller developers with more reasonable monetization are not getting anywhere close to those averages and will be punished hard by these fees, especially because it's per-install not per-user.

If a user installs your F2P mobile game on 2-3 devices (not uncommon), you now owe 40-60 cents, not 20. Hope your average revenue is good enough that you can afford that after Apple/Google take their 30%.

Average cost per install should be significantly lower than 20 for most games (it's just 2 cents for most country's in the world after all). However yeah it seems pretty excessive.

I wouldn't be surprised if that 20 cent cost is just there to encourage developers who'd have to pay to update to pro (e.g. a seat for a year seems to be equal to about 10k installs, but with pro you get extra 800k free installs and increase your revenue limit by another 800k so you'll likely won't even have to pay extra for users at all)

You wouldn't pay anything to Unity in that scenario - you need 100k installs and 200k in revenue for the game before the fee applies.

And the charge is incremental after the 100k and 200k in revenue, so if you had 101k installs and 200k in revenue, you'd only pay $15.

I'm going to use the Personal / Plus pricing instead of Pro, on a f2p mobile game, but let's say you made 200k$ on the first 200k install, but only 20k$ on the next 200k installs (for whatever reason, different market, whale spending 10's of thousands $ skewing the data, etc.), you owe Unity 40k$ and are now in the negative for those new installs when you could've still turned a profit, albeit less.

Of course Unity deserve to be paid and receive revenue, I'm absolutely not against that and if you are on the Pro subscription, it is only a concerned once you reach 1M$ which at this point means the project should be profitable and manage to pay that tax (otherwise maybe that project isn't commercially viable).

But it just feel very harsh for the mega popular indie hit that have very low revenue per user you know... A % of revenue would be better or at the very least only count install that generated revenue or whatever...

> but let's say you made 200k$ on the first 200k install, but only 20k$ on the next 200k installs (for whatever reason, different market, whale spending 10's of thousands $ skewing the data, etc.), you owe Unity 40k$ and

And that point you should just switch to Pro and ust pay ~2k per seat each year without install fees.

Of course I guess you need to think about that in advance, but unless there is a massive spike in popularity and your daily installs spike by 10000% or something in a day (which is not that unthinkable) you should be fine.

yes, you are correct in that scenario. It would be nightmare. But the scenario seems like it would be rare. And it is $200k revenue in the previous 12 months, not lifetime. So the trailing 12 month revenue would start to drop, probably under the 200k threshold.

But there are definitely gotcha scenarios, and tracking installs is highly dubious.

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