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I agree. I think this is clearly more IronSource than Unity. Check out the top comments on this thread [1] about the IronSource/Unity deal:

“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".”

[1] https://news.ycombinator.com/item?id=32081051

Unity knew exactly what kind of deplorable people the ironsource guys are, and they still sold. They knew this would inevitably result in the gamedevs getting screwed over, and they still sold.

They knew.

oh wow, i had no idea about this. for me this totally changes the perspective. it's no longer "bad unity" but it looks like unity was going to be a lost cause from the moment it got sold.

i am not developing with unity so i am not affected, but it seems time to jump ship was a year ago.

Time to jump ship was when they announced that they were going to sell a subscription-based service, rather than software, which AFAIK was already the case in 2015...

> I think it’s a shame that BigTech can’t really do strategic acquisitions anymore

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.

I’m sure if you think about this a little bit you’ll see that preventing the sale of businesses is a terrible idea.

Please feel free to elaborate.

Wouldn’t one generally expect someone proposing a fringe/seemingly absurd idea to do the “elaboration” in the first place?

I'm not a fan of how acquisitions are often used, but how would you go about making them illegal? Would an entrepreneur be required to maintain ownership of a business and its assets forever?

Make it so that shares of a company cannot be bought and held by corporations. Make trademarks non-transferable; they can only ever be owned by the entity that originally filed them. Make copyrights/IP rights subject to public auction; any time that ownership of a copyright would be transferred from one company to another, the public has the right to bid on it collectively, and if they outbid the company then the copyright goes into the public domain.

None of that prevents aquisitions.

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.

Great, that's an improvement.

How?

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.

>A company like Meta or Microsoft would have been a much better home for Unity

Perhaps companies like these shouldn't never have become so big in the first place. They destroyed much of the necessary competition .

> They own a game engine as a delivery vehicle for those ads.

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.

You're carrying the water of the monopolists. The reason why it would make so much sense for these conglomerates to own Unity is not because they're so much better; it's because their practices have already eliminated any competition that would have been a happy home for Unity.

Amazon tried to do its own spin on CryEngine and ended up horribly as they just filled it with AWS integrations and hoped people would move over, the only news cycle I can recall from Lumberyard before it ended up being thrown away was Star Citizen getting in legal trouble over it[1].

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-...

New World is based on it, and apparently doing rather well.

I guess it's not clear to me how adding per-install fees (as opposed to revenue split) would increase the reach and depth of their ad network? Specifically I'm arguing that the boneheadedness of this decision (and its honestly shit communication) is probably not related to their 'new ad network masters', and is reflective of long-term problems that have been at Unity long before the IronSource merger.

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.

> I guess it's not clear to me how adding per-install fees (as opposed to revenue split) would increase the reach and depth of their ad network?

Because it appears they will waive the fee if you use LevelPlay (previously IronSource?).

https://mobilegamer.biz/unity-is-offering-a-runtime-fee-waiv...

Oh, I missed that. Well, I guess maybe there is a way to massively grow their ad business.

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.

That's a "jump off this 300ft bridge or I shoot you" kind of proposition.

Fun fact.

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.

> IronSource, a mobile ad network, which is much more profitable than Unity.

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.

> Meta can’t seem to acquire a sandwich these days without FTC or the UK competition authority trying to block it.

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 strange though that an ad company, which usually is in the business of maximising eyeballs, would make a move that makes things more expensive and less people likely to use a product.

Who says they won’t let you install ads to avoid this fee? Win/win for evil ad co

Had not thought of this. Must not be evil enough…

> evil ad co

"But I repeat myself."

> 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.

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.

They wave the fee if you use their ad network.

Which is wildly uncompetitive and most probably illegal in the EU. Hopefully unreal or Applovin will complain.

Why is it illegal? A bunch of companies in the EU have a comparable business model

FWIW, in a world with very few major game engines and very few major game platforms, I'm elated that the latter might not be allowed to purchase the former, as it is trivial to predict how Meta would decide--whether explicitly as the reason they bought it in the first place or implicitly from incentivized lack of interest in the alternative--that Unity would become a tool that only can be used to develop apps for Quest.

In a lesser evil scenario it could have been Microsoft as they could have an incentive to use Unity to force users into Windows, or devs into C#. Unity is even featured in Visual Studio before.

> IronSource, a mobile ad network

It's an understatement.

Even calling it an understatement is an understatement.

How does this interpretation make any difference? It’s the same like people pointing out “short term greed” as the reason for these moves, but did this move increase short term greed either? Which logical person could have thought this was a good idea? No one that’s who. No matter what the strategy is.

> Which logical person could have thought this was a good idea?

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.

But is it? If this ends up killing the unity engine business, then what's the gain to ad business?

What’s the alternative to Unity? They have a huge market share and mind share among game developers. Some might be driven away but others will stay and show lots of ads. If this does eventually drive someone else to create something that takes Unity’s place, Ironsource will have made a giant pile of money running Unity into the ground.

Tragic for everyone else, great for Ironsource and it’s investors.

> What’s the alternative to Unity?

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.

>> What’s the alternative to Unity?

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.

A smaller developer base that shows more ads can be more valuable to this company than a large developer base that shows no ads.

If you show bo ads and sell your game for $10+ the 0.02-0.05 fee per user doesn’t really affect you that much financially

> ... then what's the gain to ad business?

You're not thinking like an ad business exec if you have to ask this question.

You're free to believe what you want, but your message does seem to just repeat points made by YouTube videos that also get a lot of things wrong.

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.

> the majority of the company is made of people who actually care about the engine, the community and often are developers themselves.

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.

"Maybe"?

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.

The problem with your assertion is that those upper levels drive the company direction and if the lower levels won't comply, they'll be replaced.

On that regard the public rage is something I don't mind. I don't know what would be enough to modify the value proposition to the point that the core product would be the most important thing in generating shareholder value.

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.

Sounds like it was either your first experience with a big company merger, or you’re high ranking enough to only see what you want to see

Weirdly personal attack, but then again I did say they parent message was repeating YouTube videos so my bad and somewhat warranted.

> the majority of the company is made of people who actually care about the engine,

That used to be the case. Most of them have left since Ricitelo got in charge and were mostly replaced by corporate drones.