Unity's Trap
pentadact.com
pentadact.com
Last year Unity merged with IronSource, a mobile ad network, which is much more profitable than Unity. In a public company, the profit drives the business. The company that’s called Unity is in the business of selling ads and showing lots of them to people on phones. They own a game engine as a delivery vehicle for those ads.
There was an unsolicited competing bid from another ad peddler, AppLovin, who also wanted to buy Unity. I guess the optics with the IronSource deal looked better because it could be called a merger rather than a straight-up acquisition. But the end result is the same.
(As a side note, I think it’s a shame that BigTech can’t really do strategic acquisitions anymore. A company like Meta or Microsoft would have been a much better home for Unity. But some regulator around the world would have blocked the deal for sure. Meta can’t seem to acquire a sandwich these days without FTC or the UK competition authority trying to block it.)
I don't know anything about Unity, but I've spent a few years in online ads and this is 100% how they think about it.
I think maybe what the above person is trying to say is that while no one in the game dev space would've thought this is a good idea, everyone in the online ad speace thinks this is a good idea. You could've predicted this would happen just from knowing that the game engine was acquired by an adtech company.
It's a very insightful post, don't dismiss it.
Tragic for everyone else, great for Ironsource and it’s investors.
It depends on what you are targetting, but there has been a huge surge in interest in both the Unreal and Godot communities since the announcement was made.
Alternatives exist and while it takes time to adjust if you are deeply invested, it will occur.
Nothing causes people to abandon ship like a torpedo.
Not making games. Unity has won big on the indie game community flourishing, of more people making games. If Unity stops being a valid choice, or starts being scary, some of the people making indie games might decide making games isn't worth it.
Sometimes we think of economy in terms of necessity. Some idea that people will make games, it's only a matter of how, but Unity didn't get big by cannibalizing some existing market of indie games. Unity was part of creating that market.
You're not thinking like an ad business exec if you have to ask this question.
“IronSource is known for leveraging their ad network and installers to distribute spam, malware, and adware bundlers. What the fuck Unity.”
“I've interviewed IronSource employees who showed me their work. I was pretty shocked at how purely evil the products intent was (malware wrapped installers for popular Windows applications). …“
“It's the end of the road for Unity. ( at least what most of us think Unity still is, but it's not ) The technology was always more or less "fine". Unreal Engine didn't "kill" Unity and it will not in the future. For the better part of a decade, Unity tried to become not-sure-what but way more than "just a game engine", and that's the problem, I don't know exactly what and neither do they. To be clear, Unity is not "dead" and will not be dead for a while, but the writing is on the wall with this "merger".”
They knew.
i am not developing with unity so i am not affected, but it seems time to jump ship was a year ago.
Perhaps companies like these shouldn't never have become so big in the first place. They destroyed much of the necessary competition .
"But I repeat myself."
So honestly I think if any of the big 5 got Unity they would have probably ended up doing something similar.
1. https://www.eurogamer.net/the-star-citizen-makers-are-being-...
For your main point, the merger with ironsource didn't modify power dynamics in the company that much. Also trying to group an organisation with thousands of employees into a single entity that doesn't care about anything but pushing ads is just ignorant. Maybe you can make the argument for the highest level of the organization that's responsible of generating shareholder value, but I assure you the majority of the company is made of people who actually care about the engine, the community and often are developers themselves.
Then again part of this whole thing is exactly to reduce the dependency of ads in how revenue is generated so if the community completely shuts down the effort things are not any better.
But it should never be possible to be in a situation where the costs are as unpredictable as they are in the released model.
Nobody is saying every employee of Unity is for the pricing changes, but yet here we are. Almost like what really matters is what the highest level of the organization want.
Yeah they care so much that they stopped Unity from destroying its reputation and ecosystem!
Never mind. If "the majority of the company is made of people who care about the engine" is true, it just means the majority of the company doesn't really matter. Which is, frankly, the norm for companies with more than hundreds of employees.
That used to be the case. Most of them have left since Ricitelo got in charge and were mostly replaced by corporate drones.
The reality is that Unity was always bleeding cash. Ever since it's IPO, it's been cash flow negative. Like a significant amount. Their last filing before IronSource merger stuff starts showing up is 2022Q4, and it has $323 million revenue, and net loss of $250 million. Their claimed R&D expense was $248 million, cost of revenue was $112 million, and sales and marketing and G&A both about $100 million.
Even after their merger with IronSource (so looking at their 2023Q1 filing), they are $500 million revenue, net loss is $253 million. Basically looks like IronSource's business is roughly break-even.
Framing this as a company chasing "higher profits" is a bit misleading. This is about a company trying to chase "not dying" and floundering. Unity pre-merger and post-merger was not a company that could 'just keep the status quo'.
In fact, if you frame this from a game developer centric standpoint, what you've actually seen happen is a game engine developer try just about everything EXCEPT adding a per-install fee/revenue-split for decade+. Like pre-merger, Unity was already an ad company - it was pulling in half its revenue from its existing ad network. Unity did so many contortions to try to make a minimal strings attached game engine work as a business (and it has not succeeded).
Now for Unity (the ad company) to successfully make profits deploying ads through their game engine, either their ad business needs to become vastly more profitable (which it won't - ads can be profitable, but it's not magic printing machine), or their game engine business needs to not being a gaping bleeding wound. And hey, that's actually the exact priority that Unity the game engine company would have.
I am not excusing their current actions. But it's plain as day that they need to generate more revenue from their game engine business to be a viable business at all.
Because it appears they will waive the fee if you use LevelPlay (previously IronSource?).
https://mobilegamer.biz/unity-is-offering-a-runtime-fee-waiv...
I mean honestly, they probably should have made this more clear and open in their announcement (I totally agree with the general sentiment that Unity has done an awful job messaging this). Like sure, ad networks in games are yuck, but this is targeting developers who already decided to use an ad network.
What's a shame is that acquisitions are allowed at all. Companies should be forced to compete, rather than agglomerating other companies so that they can leverage them to artificially increase their market share as has been done here. It's completely anti-competitive.
Companies would just be bought by wealth induviduals (or trusts, or whatever) as opposed to companies, and copyright/ip would just stay unde the original legal entity and licensed out.
You’d just have a bunch of under the table deals with similar outcomes but much less transparency.
Also effectively you’d have way less economic growth and paradoxically less competition.
For instance entering a new market which is dominated by oligopolies would be prohibitively expensive even if there is a lot of potential for disruption. Now you can just buy a small/ailing/mismanaged company and restructure it. With you proposal everything would have to be built from scratch at best you could just buy some of their assets during bankruptcy proceedings.
And for good reason, Meta is already big enough, no need to give up even more of our lives to these data hoarders.
It's an understatement.
Even calling it an understatement is an understatement.
but if that were really the case, why would they start charging per install? Why wouldn't they distribute the engine for free, but with the caveat that free users must show the ads?
Adding a revenue share per install is the antithesis of trying to get an ad platform more widely distributed imho.
AppLovin was IronSource’s main competitor, in fact it’s the market leader by a significant margin.
And yes, while it’s true that AppLovin decided to mess with them a bit by making an unsolicited offer that would make Unity a minority stake holder at 49%, their offer was significantly higher than IronSource’s and significantly higher than market value.
I’m sure the fact that IronSource’s CEO Tomer Bar Zeev was (and still is) on the Unity board had little to no influence on Unity passing up on the offer and going with IronSource instead.
> (As a side note, I think it’s a shame that BigTech can’t really do strategic acquisitions anymore. A company like Meta or Microsoft would have been a much better home for Unity. But some regulator around the world would have blocked the deal for sure. Meta can’t seem to acquire a sandwich these days without FTC or the UK competition authority trying to block it.)
I think this cheering on of companies gobbling up each other, is bad in general, whether it’s Meta or Microsoft doing it or Unity. Ultimately it’s a bad thing for everyone if in the end there’s barely any competition and everything is under the umbrella of a few companies.
Unity was still the much larger company and its leadership stayed in charge so it was a stock funded acquisition.
> AppLovin, who also wanted to buy Unity. I guess the optics with the IronSource deal looked better because it could be called a merger
The AppLovin deal would’ve been a merger and certainly not an “acquisition”. AppLovin was effectively asking Unity to “buy” them. Unity’s shareholders would’ve kept 51% of the new company and its CEO would be in charge.
> A company like Meta or Microsoft would have been a much better home for Unity
If we admit that game engine development can’t be profitable on its own and has to be subsidized either by some megacorp or by ad revenue like now.
To be fair that’s not true. Had Unity kept focusing on it’s core business and hadn’t hires 4000-5000 unnecessary employees they’d be doing fine financially and their engine/editor would be just as good/bad as now.
> in 2019 Unity went out of their way to say, and cement in their Terms of Service, that “When you obtain a version of Unity, and don’t upgrade your project, we think you should be able to stick to that version of the TOS.”
I suspect a lot of small shops were just toiling away trusting that when they first evaluated and decided on Unity they made the right decision. I bet less than 1% were reading ToS changes whenever they had to click the button.
My response to that would be: even keeping morality out of it, Unity's bussiness is specifically making the job of gamedevs easier. Forcing people to keep up with every detail of the terms on which you are using their engine undercuts the value of their product in exactly the same way as e.g. making their engine twice as slow, or making it much harder to port to different platforms. It forces their users to take their attention away from the actual job of making the game.
In that view this isn't just a pricing change, but a fundamental worsening of their offering, which is meant to be a streamlining of game development.
The problem, on multiple levels, remains rewarding people for doing necessary maintenance work rather than "big-ticket" features like adding another ad framework
- Godot seems immature in many ways (for example, Web export is currently broken on macOS/iOS according to their docs)
- Unreal seems like major overkill and apparently not well suited for 2D
Is there anything else that is a serious contender?
How can you protect yourself to not end up in a similar situation as the author?
Is there any way you can protect yourself against that when choosing a proprietary engine?
Long story short, you might want to wait 1 or 2 months to let the dust settle before you pick an engine.
No idea how/if that's legal, but it seems to be what people are saying happened, and no-one seems to be arguing that point.
Webassembly support is spotty, though in progress AFAICT.
Used by a few 2D games like Stsrdew Valley and Celeste.
You can easily develop a low end game in unreal.
I would suggest just using Godot for 2D. With time it should be fine.
For 3D, even AAA have been going to Unreal so that may be best. It's not ideal but the business model of 5% works compared to Unity promising to avoid revenue splitting.
1. 2D
2. Only target one kind of platforms (e.g. only Win+Linux+Mac but no mobile, or only mobile but no desktop/console)
You'll find almost any open source engine works. Rolling your own 2D engine based on a barebone one is just like writing a parser. If you never wrote one it seems like an impossibly hard problem. It's not.
Modern 3D graphics are built upon a lot of algorithms. From TAA to volumetric rendering to cascading shadow maps to SSAO to voxel-based global illumination... the list goes on an on. Surprisingly, none of these algorithm is truly hard. But you need to implement all of them to make things visually match up modern standard.
For 2D it's more like you know how to pass the offset to a shader? Boom you have sprite animation. If you want some super unique effects with clever shaders, yeah that's not easy, but using Unity doesn't make it less hard anyway.
- it's production ready, available on all the main platforms
- lightweight and performant
- best for 2d, though it's a 3d engine at heart
It has been used to make The Case of the Golden Idol, Brotato, Cassette Beasts, and Dome Keeper. It's indisputably a production-grade engine.
As a Rust enthusiast and small-time Bevy contributor, I wish I could recommend Bevy in the same way, but Bevy is actually immature, for real. People do make games with it, some even commercial, but it is what it is.
The Godot engine might be less complete than Unity, but calling it immature is a bit strong IMHO.
For devs having been burnt by a proprietary engine, namely Unity, the Open Source aspect alone is a good reason to switch.
So Godot is bound to get far more users, and consequently, develop and improve significantly.
Game development meta should be:
1. Decide on the type of games you want to develop (RTS, RPG, advanture, FPS, etc.).
2. Make a game engine for it.
3. Make assets for it.
4. Finall, make a game by combining the engine with assets.
5. If successful, create a sequel/similar game.
This is how all major game-dev companies operate. Indies can do this, too. Just on a smaller scale.
Patentedly untrue. MANY major game companies use existing engines. For example, the pokemon gen 4 remakes are on it.
- learning is also fun
- Most engines (by force or by available tutorials and docs) railroad the end user into some specific genres (in my experience: side scroller, FPS). If you wander too far away and understand the risk/complexity, it might be worth considering.
terrible idea.
Depending on what game it is I can see someone using something like Raylib to build their engine instead. The abstraction level there is about the same as Godot. You get high-level API:s for a large number of things and support for many platforms (far more than what Godot or Unity supports). What you do not get is a GUI for building scenes or editing scripts.
Starting from a lower level with something like SDL sounds like something more suitable for hobby projects, like coding a game in TIC-80 or writing a 16-bit DOS game in FreePascal or other hobby-activities (things that I enjoy). Fun, but probably almost never a good idea for a business.
The correct move would have been to ignore them but instead Unity chose to shoot their other users and themselves in the foot.
But yeah, this would have still have meant that most of the developing world devs would not have paid...
I'm guessing here is that Unity counts on these devs being forced to go through a few game distributors that have monopolized it in the developed countries : iOS, Google Play, Steam... this is a bigger issue here !
> I have to accept the new terms to continue paying for it, which we have to do to keep legally using Unity, which we have to do to finish our game – because by this point we’re trapped in their platform to the tune of 5 years’ work.
And:
> The only difference with a released game is our recourse: instead of having to abandon development of our game, we’d just have to abandon the game – never patch, never update. Which sucks for players almost as much as it sucks for devs.
It sounds like they're too deep into developing their current game for switching engines to be feasible, so they're presumably going to agree to the new terms and complete development using Unity, release the game, and hope that Unity's current and future terms don't end up being too onerous for them.
And then never ever touch Unity again after that.
Not to say they pick the right plan and communication though. But the end result is the same: profitable companies either pay or don't use Unity. Unity is OK if smaller players choose to leave too because they don't contribute to even the long term profits, and apparently this is aimed for short-middle term profits.
It's OK to fire your crappy and unprofitable customers, but keep in mind that smaller players don't just disappear. They will adopt (or build) something else, and that something else (Godot, Unreal) may benefit from Unity's loss over the short and long term.
Just as important though is the trust they're losing with larger successful customers because of how they implemented this change.
I suspect they might have just destroyed their own business. These engines are a learning investment and the more friction you add, the fewer devs that will bother investing their time into it. Time will tell.
No one thinks in the long term nowadays.
This misses the point that the change was done with deception, but it was also appropriately addressed in the article:
> But they have to do this, their game engine business isn’t profitable!
> Ah, I didn’t know that, perhaps because I don’t give a fuck? It’s not the customer’s job to make your business plan pay off. I didn’t ask them to offer terms that don’t work for them, I didn’t ask them to hire 7,000 people, I never even made a feature request. They asked me to pay them $10,000 in sub fees on the promise that it meant no fee per-sale, then once I was in too deep to switch, they changed the deal.
But the thing is that it is not the smaller players that leave (technically only affect if you make 1M$+), it’s everyone from the amateur to the AAA studio using Unity for their mobile games.
It would be prefectly true if Unity's "advantage" (arguably the only advantage) weren't more tutorials and third-party packages.
Like, just charge someone a fee for your tool and be done. If you think your tool is worth more just charge more.