Missteps implies accidents. This was not accidental, it was an attempt at extracting rent - retroactively.
At this point it's too late to significantly cut costs, so yeah seems like they pushed themselves into a corner.
The sad part is that it was already perfectly obvious where were they heading after they IPO'ed.
Which to be fair wasn't that inaccurate. Had they stopped expanding like crazy for a year or so the company would've been profitable (with minimal damage to their core product, if not the other way around).
Public shareholders don't like that. It's not good enough.
The board and upper management together with their VC backers (they also gave Unity a significant loan to fund the IronSource acquisition which will be exchanged to stock in a few years) seem to be the main driving force behind this.
The only way most public shareholders can express their approval is by buying or selling stock and looking at the share price over the last 1.5 years they don't seem to approve that much.
The neglected the core product and have the gall to justify their retroactive change of terms (after sneakingly deleting assurances to the contrary from the TOS and deleting the github repro that tracked transparency after their last PR disaster) with rising costs of maintaining the runtime that’s been falling into disrepair.
Investments carry risk. Investors may dream that it’s ok to get made whole by the game industry they tried to take over using VC money to build a dominating position and then changing terms and extracting rent but this is such an open and shut case of corporate mismanagement, deceit and hubris, no point in even trying to justify that.
If they want to survive, they fire the CEO, claw back bonuses and shares from executives and shrink the company to a size that’s warranted.
Unity can die in a fire, anyone with a choice will know better than to get into a relationship with them now. There’s enough landlords in the industry already with platforms, there’s no room for another extracting value of the hard work of creatives.
Accepting their terms requires broad changes to the industry business models - back to old EAs dream of charging by the download. And it requires open eyes walking into a relationship with a company that every time their CEO makes a shitty gamble will extract the losses from developers.
Burn it with fire.
And before the acquisition, AppLovin even offered to buy Unity for $17 bil. I'm skeptical it wouldn't have turned into a shitfest in that direction either given that they would have either focused on mobile exclusively or worked to turn normal PC gaming into adware.
Even now, Unity's quarterly statements are wtf, wth are they spending $500 million a year on "sales and marketing" for.
Valve maintains one of the biggest platforms, and their own game engine. Valve also developed CSGO, TF2, and Dota, all popular online games that need constant maintenance (and even big content updates sometimes). Valve also invested in VR and sells hardware.
Valve has 1200 employees.
To me it's easy to see why Unity lose money.
I'm not "defending" Valve (actually I find it's very worrisome that they're a game developer and a platform at the same time.) I'm pointing out the fact in no way Unity can sustain 6x of employees than Valve.
Distribution, Analytics, Multiplayer, Anticheat, Publishing Services, Anti Piracy, Storefront, Sales, Mods, Custom Content Integrations, Localisation, and most importantly discovery (things you pay for dearly outside on mobile).
They never had need to convince developers that the fee is worth it and they never had to retroactively change terms of service. They have continually invested into the system and built the trust.
Most of all, Valve chose the long term sustainable business model when everyone else in the industry tried to extract per download charges from gamers. So gamers chose the company that sold them their game collection, just in the cloud instead of nickel and diming.
And developers chose valve because they were infinitely more trustworthy and offered better tools than any of the legacy publishers. They never increased the fees because they made bad bets either (and they had a few like VR)
Yes there’s a case to be made that the 30% should be reduced now, but realistically few could compare Valve to Unity when it comes to execution and long term value balancing for developers and gamers.
But I can't help but feel you're willing to twist the facts to defend Unity. I'll list some facts for the readers:
1. The 4% cut is a rumor at this point. It's not confirmed.
2. Unity didn't just announce a 4% cut at the first place. They announced a fee per install. It's an unprecedented business model. No other semi-popular game engine does that, ever.
The Unity pricing structure is complicated and badly managed. The fees were previously uncapped, and it allows for edge cases where the fees look like they could exceed revenue. It causes problems for givaways, bundles and Gamepass deals.
Still, for many situations the math works out so Unity is cheaper than Unreal, even before this 4% rumour. You wouldn't want to accidentally hit one of those edge cases though.
People would rather have a higher fee that is certain than a lower but uncertain fee (of course no fee would be best).
e.g. what happens if you get 20 MILLION installs in a single month?
Answer: You pay $400k with a Pro licence, $200k for Enterprise. Which sucks if you are only bringing in 400k/yr revenue, but with 20M installs this is what you call 'a good problem to have.'
If you told me that Unity was going to try and monetize through some strange approach, I would have guessed that the scheme would have favored the freemium approach, not turned it into an extremely risky gamble.
1. Make a platform gamers love to use so much that they will still use it even if other stores are literally giving the games away for free
2. Build a brand that your target audience recognizes worldwide and trusts with their entire game collection.
3. "Exploit" the fact that your audience loves your product and brand so fanatically that you can charge the same amount on an open platform (PC/windows/linux) that other app stores need walled gardens (apple/android - literal lockin and literal near-monopolies/duopoly) to be able to charge.
I really struggle to find a way to frame Valve as the bad guy here. It's PC. There's literally nothing stopping you from just installing as many app stores / launcher platforms as you want. And it's not all-or-nothing - people DO use multiple launchers/stores. What gamer doesn't begrudgingly have Origin and at least one of EGS or the Blizzard/battlenet launcher installed alongside steam? And yet people still use steam, and spend the most money there by far.
That's me! Not that I could have had any of those, as far as I'm aware. When it comes to Linux support, Steam isn't just the best, the others are actively bad.
It would be great if you could be Valve. Everyone wants to be Valve. But you are not Valve. Especially not if you're publicly traded or a private equity rollup - things Valve has stubbornly resisted becoming.
They are a public company at this point. Not a fan of PE but no need to blame them for everything.
Instead, look at their EPS. They have been negative since they IPO and never posted a profit.
Unity is publicly traded: https://finance.yahoo.com/quote/U
Can’t blame private equity for this one.
> crunched the numbers and decided it's time to milk this one dry.
More realistically, they crunched the numbers and saw that they aren’t making enough money to keep the company going forever. It’s not a secret, because it’s a public company: They need to make more money to survive.
More monetization was inevitable. I know it’s unpopular public opinion, but Unity as it is today cannot exist forever on the monetization model they had in the past. The numbers didn’t add up. They had to change something.
This behavior is not only destructive of their legacy, the promises they kept, but of course of their own reputation as a game company... I don't see any independent developer choosing Unity from now on (without a radical change for the company) in their right minds.
I'm pretty sure this wasn't the only solution to the situation. If they're going to ruin the company anyway... might as well make it open source. Start charging a large amount for a license. Cut the company size (maybe competition for other open source software is too great, and they couldn't survive at that size!). We have the choice to do the right thing, although many times that isn't the easy thing to do.
This goes even to society at large. No social or economic system can exist without ethics -- to believe so is delusional. Not communism, capitalism, social democracy, or something else(and I think we need some other ideas in the mix... but that's another story!) can function well when individuals don't have a good grasp of ethics. Governments are made of people making decisions, and companies likewise. No matter how much structure you impose on top, if people don't generally cooperate, a good outcome is impossible (garbage in, garbage out). So, like a friend says, "Be excellent to each other, or else..." :)
And we need to support free software too. If you use it, please donate :)
Sure people wouldn't have been happy with higher fees, but current clusterfuck is an order of magnitude worse.
Companies subsidize "free" by redirecting money from successful areas to fund new or unsuccessful areas. And in this case of "free" (advert, data collections) games, is basically a anticompetitive dumping ground and is a common trend with monopolists.
That would have been ... perfect. And when did they back up on charging per install?
According to their SEC fillings their staff almost tripled in just 4 years
> Dec 31, 2022 7,703
> Dec 31, 2021 5,245
> Dec 31, 2020 4,001
> Dec 31, 2019 2,715
Development of game engine is costly and take a lot of resources, but they already had a successful product back in 2019 and long before that. With all that hiring quality of their software was more or less constant (and not too high as always) which means all recent growth was not in their core business.
I don't really get why companies keep hiring themselves to death. It clearly does not translate to meaningful productivity gains, yet sends their labor and related costs skyrocketing. It's so alien to me from the outside.
The decision maker at the top is usually too disconnected from the rank and file to see the bloat. And the ones that aren't tend to be ruthless about headcount.
Managers don’t get headcount without allocation. It needs to be budgeted and approved.
This seems likely, but from what I've been hearing from game devs, the issue isn't the increased fees so much as the fact that they retroactively changed licensing. That they did this (again, after promising not to the last time) indicates that regardless of what the fees actually are, you'd be a fool to enter into a business relationship with them.
The lesson to be learned here is to never trust a "promise". Enter contracts that one party can't change on a whim. If a product you're using to run a business can pull the rug out like this, maybe move your business to one that can't.
So the moral here is "don't patch your software without having a lawyer diff the TOS?" I don't think that's the world we want to live in. I don't think that leaves consuming proprietary software as a feasible option in today's fast moving security landacape. It's fair to call out bad actors who muddy the water to make the world that way.
Yup, it's Epic which is the private equity rollup. They're innocent, unless there are some Stephen Elop-style shenanigans going on.
Unity’s value was previously in the hype and now is possibly in the voting rights by shareholders. With enough voting rights, I bet you could vote for a 0% commission for your video game company and offer to vote out the CEO/COO/ECT or anyone overpaid if they don’t concede to your demands.
Now, they will be charged, despite not changing the unity version, as if next year. Retroactively applying the new contract terms to the old one.
This retroactive change is one of the things which people are very unhappy about.
Some more info here, under the "ToS Update" heading:
https://www.gamerbraves.com/unity-silently-deletes-github-re...
That being said, multiple people seem to have different interpretations of it. And Unity has reportedly said they'll be walking back at least some of the changes due to the very public outcry.
You would be able to argue that their various statements over the years have applied constraints on what those changes could be, but I think it is clear they could increase the price. Changing the transition from $0 to non-$0 probably wouldn't stand in many jurisdictions, and they seem to already been walking that back.
https://forum.unity.com/threads/unity-plan-pricing-and-packa...
Q: Are these fees going to apply to games that have been out for years already? If you met the threshold 2 years ago, you'll start owing for any installs monthly from January, no? (in theory). It says they'll use previous installs to determine threshold eligibility & then you'll start owing them for the new ones.
A: Yes, assuming the game is eligible and distributing the Unity Runtime then runtime fees will apply. We look at a game's lifetime installs to determine eligibility for the runtime fee. Then we bill the runtime fee based on all new installs that occur after January 1, 2024.
I'm really sorry they are screwing you but words have meanings, and this is not retroactive. One legal scholar writes:
"A retroactive statute is one that operates as of a time prior to its enactment. A retrospective statute is one that operates for the future only. It is prospective, but it imposes new results in respect of a past event. A retroactive statute operates backwards. A retrospective statute operates forwards, but it looks backwards in that it attaches new consequences for the future to an event that took place before the statute was enacted."
And of course retroactive and retrospective changes cannot be made to contracts (vs law) without the agreement of parties, or a court decision. Unity is saying you have already agreed to these terms for existing licences, and must agree to new terms for new runtime licences. Something you can dispute in court, but not without significant financial risk.
You're complaining that the licence for runtime instances should be locked to the one that was in existence when you wrote the game (using the editor). This is entirely reasonable, but not a right you have under the old or the new licence. They could change it again!
You should absolutely disable installations in the future. Pull all binaries from the web and replace them with ones that require an activation key.
If you have made a best effort to comply with the new terms, they cannot come at you for people running an old installer.
https://forum.unity.com/threads/unity-plan-pricing-and-packa...
Q: Are these fees going to apply to games that have been out for years already? If you met the threshold 2 years ago, you'll start owing for any installs monthly from January, no? (in theory). It says they'll use previous installs to determine threshold eligibility & then you'll start owing them for the new ones.
A: Yes, assuming the game is eligible and distributing the Unity Runtime then runtime fees will apply. We look at a game's lifetime installs to determine eligibility for the runtime fee. Then we bill the runtime fee based on all new installs that occur after January 1, 2024.
The plus side from this will hopefully be people reading contracts more closely before basing their income stream on it.
I thought the point of all this was that they changed the license. So you sign a license to use the product and spent time and money to develop your product... then they change the license so it's no longer profitable for you to sell it.
So I guess the only reasonable solution to prevent that type of thing is for the license to include wording that you have the right to continue to license it under the same conditions (and presumably price limited) perpetually.
I'm sure someone at Unreal is working on asset conversation and API shims to allow porting Unity games, but it's a big change and costly for the developer.
Correct, it's illegal. They are trying to do an illegal retroactive change. That's the point.
Can you afford to bet on winning?
It really shouldn't be this way, and I hope that we will see a time when "that's illegal" means that a company like Unity wouldn't even consider doing it. But as things stand, something like this is often only illegal in practice when it's done by people without the resources to fight lengthy legal battles.