John Riccitiello steps down as CEO of Unity | Hacker News Reader

John Riccitiello steps down as CEO of Unity

venturebeat.com

926 pointsAndrewKemendo435 comments

I have to say, the only thing more surprising to me than seeing the board actually hold Riccitiello responsible for this (with consequences) is seeing that their interim replacement / transitional CEO is someone with a pedigree that, on the surface, seems even more management consulting / investor / revenue focused than Riccitiello was himself.

To be clear, I know essentially nothing about James M. Whitehurst other than what is readily publicly available (IBM / Red Hat, advisory roles, etc.).

But my read on a lot of the Unity crisis, as a long-time game industry veteran myself, was that one of the increasingly common "management consulting" / investor- & revenue-focused type of gaming executives (e.g. Riccitiello, Don Mattrick [Zynga replacement CEO when Pincus stepped down], Kotick [Activision-Blizzard]) had finally overstepped their bounds and let revenue goals drive decision-making just a bit too far without customer consideration.

So, I had assumed that if Unity did make a leadership change here, it would be in a direction away from that - i.e. a more industry-seasoned executive with less of a pure revenue / "business" focus.

I think I clearly misjudged the situation here in light the Whitehurst pick; while it's possible that is truly just an interim role and they will still pivot to this in the final hire, or that I simply misjudge "the label on the tin" and Whitehurst is very culture / customer focused, I don't think I would bet on it. This seems like the board actually "doubling down" on driving revenue results - and fast.

"doubling down" indeed...

One possible interpretation of events is that he was ousted not for the initial proposal and backlash but precisely for how he backtracked after the fact -- perhaps the board gave a clear mandate and Riccitiello was unable to successfully change pricing structure to match financial expectations. That would explain the replacement.

Things aren't looking great for Unity right now...

Yeah, I think this could definitely be one explanation.

Other commenters in the thread have also given good thoughts / potential scenarios in similar veins - essentially that this was actually a failure of messaging, sticking to the plan, and / or both, plus some other combination of "no, seriously, we need to make money and become profitable, nothing else matters as long as the boat still floats, make it happen and keep this ship going."

And I do suspect that Whitehurst will likely be a better fit for that. A seasons gaming industry executive (regardless of investor / revenue focus) may actually be a negative if that's the goal right now... I'll be very interested to see how this all turns out.

I think that's reading too much into, what is fundamentally a very normal and common way of dealing with CEO turnover -- appoint a safe, business-friendly steward of a CEO, while you stabilize the crisis and decide who the real long-term leader should be.

The word "interim" was clearly used, and there's no hint in the PR statement about this being a permanent appointment. So I don't think it's reasonable to equate this to a clear doubling down of anything.

At the same time, a guy like Whitehurst is a safe, relatively unimpeachable medium term choice, not like someone you'd use for a truly short interim 30-90 days while you execute an executive search quickly. If you need him for 1-2 years of just don't rock the boat leadership, it'll probably work out fine for the company and the board would be satisfied.

Boards don't micromanage to that level (or more, they shouldn't)

There might have been an explicit mandate that Unity's pricing structure should be changed, but more likely it was just an explicit or implicit mandate that the Unity division should produce more revenue (or profit).

The actual details of how to achieve that mandate would be left up to Riccitiello and his management team.

My interoperation is that while the board probably agrees with the need to change Unity's pricing structure, Riccitiello is being ousted for the poor implementation with a proposal that generated so much backlash and then some pretty poor handling of that backlash.

Right now, I'd imagine Unity is more concerned about placating their investors that the company isn't going to fall off a revenue cliff.

Appointing a "developer-friendly" candidate would have caused more uncertainty.

As a temporary pick, I'd guess Whitehurst is intended to message "We realize we screwed up, but there won't be any sudden changes."

The reaffirmed guidance for current quarter is hilarious though, given any changes would play out in future time (e.g. developer flight for next project).

Agreed - the reaffirmation of guidance almost felt to me like a "seriously guys, why are we down 22% up front, you know this doesn't impact short-term revenue..." which... definitely misses the point.

It's interesting that after-hours / future trading doesn't seem to have responded positively (yet). Maybe that's just another symptom of lost trust as well.

Interim CEOs generally tend to be either a board member or a C-level executive that take on the role just to manage day-to-day CEO duties while the board searches for a more permanent replacement.

In this particular instance, Whitehurst isn't a board member, but per the press release[0] he is a "Special Advisor at Silver Lake". Silver Lake is one of Unity's largest shareholders (~10%) and Egon Durban is on the board.

EDIT: Also worth noting Silver Lake, along with Sequoia, committed an additional $1Bn into Unity at the time of the IronSource acquisition in the form of convertible notes with a conversion price of $48.89 / share[1], which is at a slight premium to the price at which Unity's stock traded then (7/15/2022) and at a meaningful discount to their current share price of $29.70 -- which supports the (admittedly speculative) argument that SLP's voice on that particular board is all the more prevalent today.

——————————

[0]: https://www.businesswire.com/news/home/20231009494331/en/Uni... [1]: https://investors.unity.com/news/news-details/2022/Unity-Ann...

This is helpful context as well, in addition to doomlaser's explanation of his background re: IBM and Red Hat. Thanks for sharing it.

I wonder to what extent Silver Lake drove this overall decision (vs. others on the board potentially initiating it)

Ah, Silver Lake, of Skype acquisition and zeroing-out employee equity fame.

https://www.wired.com/2011/06/skype-silver-lake-evil/

I didn’t realize they screwed over some of the execs by zeroing out options.

The night before the same transaction, they issued a pile of diluting shares to themselves, effectively clawing back something like 50% of the rank and file employees’ stock options.

I might have the date and percentage wrong, but it doesn’t really matter.

Silver Lake are total bastards and probably belong in jail. Avoid.

I thought stocks represented ownership of a company. If a company has 100 stocks and I own 50, I own 50% of the company. If the company issues 100 more, shouldn't 50% go to me, since a share represents a part of the company ownership and I own a known percentage of the company?

How is it legal to say "you bought 50% of this, but now I've arbitrary decided that I own 99% of it because I gave myself more percent"

You can bring in investors, go in retirement, sell your company. So ownership of a company can change. One way of doing that is to sell shares, another way is to give new ones to the newcomers. I don’t know this precise story with Silver Lake, but emitting new shares and diluting past investors to inject cash into the company is sometimes the only solution to bring cash on the account.

You can always create more stocks, but that delays the value of each, so investors might not like that.

delays -> devalues, dilutes?

Nothing on paper says "You own 50% of the company".

The company starts up, it has 100 shares, you get 50. If you calculate it, you own 50%.

Later on the company needs to raise cash, so it issues another 100 shares. Company now has a ton of cash in the bank. Total shares outstanding is 200. Now you own 25%.

Then whats the point of buying a stock if it doesn't even entitle you to ownership of a company?

There's for example non-voting stock where you only participate in a potential exit or dividends.

Depending on the company bylaws you typically need at least a simple majority of the votes / stocks to issue new stocks. The company can also have a rule that says that existing share owners must have the right to purchase before everyone else, to "defend" their stake.

In general companies typically raise money because they think the cash infusion will benefit the existing shareholders in the long run, either by not going into ≈bankruptcy or having the cash to do investments / move into new markets etc.

It does entitle you to ownership, you as an investor in the company presumably approved the issuance of new shares on the belief that the additional capital would make your investment worth more in the future.

At least in theory the extra cash raised by selling the new stock makes the company more valuable, so your shares remain worth the same before and after. Actual practice is a lot more nuanced - the company might not be able to sell the new stock at a high enough price, or they might spend the new money immediately on hookers'n'blow^W^W^W unsound investments.

what does ^W^W^W mean

Remove previous word

The other answer to this is correct, but a little more detail in case you're interested:

^W is a control code. This specific one represents the keys ctrl+w, a keyboard command in Vi and Bash among other things. It deletes the previous word. You often see something similar with ^H as well, which is a single-character backspace. https://en.wikipedia.org/wiki/Backspace#^W_and_^U has some more information about these.

Some people use them more to make visual jokes in written text, more or less the same way you'd use strikethrough formatting in text.

And in my experience ties in nicely with the fact that when a dumb terminal glitched or lost sync with the server, control codes would start to litter the screen instead of being interpretted. You'd see things like:

…thsi typo^Ŵ^H^H…

start to appear, sometimes followed by several random letters hit in frustration, before the final hard-reset of the terminal and resignation to the fact some unsaved work has been lost.

I wish there were more people like you on the internet.

Shares do not imply ownership but participation. That participation can take different shapes, depending on the type of shares and the bylaws of the company: some will be entitled to dividends, some will be entitled to voting on decisions, some will entitle to a form of ownership, etc etc.

It sounds like you are thinking of publicly listed companies which have to adhere to strict regulation, much different from privately held companies.

Even then, there are no guarantees. A company can simply be mismanaged and overvalued as we saw recently with this Danish airline: https://apnews.com/article/scandinavian-airlines-air-francek...

Now you own a smaller part of a more valuable company, given the the money is well spent. Your net worth shouldn't change much.

Either way, if you had a majority of the voting shares, you could've stopped the issue.

I thought that if the company is issuing new shares, it was customary to give first refusal to existing investors (a "rights issue"?)

There may be a preexisting contract between investors that grants this right of first refusal. In some scenarios (e.g. startup seed rounds) it is customary to require such a contract as part of the investment deal, however, if you don't contract for this right you don't have it, and it may well be that some shareholders (e.g. investors) have this right and other shareholders (e.g. initial employees) don't.

Entirely up to the company.

Conversely companies can buy back shares so each share is a larger percentage of the company.

Apple has been doing this aggressively for the past 10+ years.

It generally requires a shareholder vote to do this, so this is mostly a concern for someone who owns a minority stake in the company. And then it depends on the rules that are actually set up for the company as to what is and isn't allowed with issuing new shares. So it's very much a "read the fine print" situation.

Umm, is this still consequence free in USA?

Yes.

The most famous Interim CEO was Steve Jobs.

He was also employee #2 and #0 at the same time, so Quantum CEO?

He also aggressively recruited and hired the guy (Sculley) that got him fired from Apple on the first pass.

Amateur move on his part, hiring an 'MBA head' CEO

Tim Cook is also MBA and it looks like it is working fine for Apple.

Yes but he spent a lot of time inside Apple and grew within it

The problems you have selling sugar water are not the same problems that Apple has today (or since Cook moved into the post).

yeah I know but issue is not MBA it is what kinda culture you come and where you are good. Selling sugar water (you need to be like super good at marketing) and leading tech firm need different skills.

I think he's good at operations. But he doesn't lead the same way jobs did. apple can still turn the crank, but I don't think they innovate like when sj was around. Jobs worked with the outside world well, and cooperating well with the rest of silicon valley.

I think apple is now heavily navel-gazing. Their products point inwards into their ecosystem, they don't interoperate, the customer is trapped, they have few choices. maybe I should say egosystem?

> I don't think they innovate like when sj was around

I would have agreed with this before the M1 Macbooks came out, but when it did it caused a big change in my opinion.

Compare them to when apple switched from powerpc to intel.

When that happened, basically the mac was a better pc, since you could run windows natively on your mac. The mac now shared hardware and software with the pc industry, and innovations transferred over, like graphics cards. Apple let its customers benefit from multiple ecosystems, and they have more choices.

The apple switch to arm, went the other way. how many PCIe cards from a pc work in a "mac pro"?

I've read Sculley's book as a teenager and I remember that it made a big impression on me, even though I don't remember much. I think the PepsiCo part was really gripping.

Silver Lake being one of Unity's largest shareholders explains their recent behavior perfectly. It's a private equity firm whose sole concern is squeezing blood out of a rock.

Accidentally funny name

https://de.m.wikipedia.org/wiki/Silbersee_(Bitterfeld)

That's basically the reputation of a significant number of private equity firms. Their standard operating procedure is to load the company up with debt, cut R&D, cut investment into the product, cut wages and raise prices to increase short-term profits while pretending you're trying to turn around the company and save it. That's basically why Sears and K-Mart don't exist anymore[0] and why so many newspapers fired their journalists and replaced most of the local news with national news from the wire services[1].

[0]: https://www.cnn.com/2018/10/16/investing/retail-sears-privat...

[1]: https://www.stern.nyu.edu/experience-stern/faculty-research/...

Sounds like Twitter.

Elon's Twitter acquisition was exactly to do that but he muffed it.

Elon's twitter acquisition was a play to sell lots of incredibly overvalued TSLA stock without tanking the price.

May a lot of noise, declare you're done with Twitter's bots and BS, sell a ton of stock -- not because it's overhyped, no it's for Twitter -- and then back out of the sale.

And he would've gotten away except he tried to back out 3 times and they held him to it. So now he's got this trainwreck situation, and he's doing what he thinks is the right play, lemons into lemonade.

Everything except short-term profits. X seems decently focused on the long term, especially with subscriptions being introduced as a (new) revenue stream.

Also not sure about R&D, as I don't know what R&D Twitter was doing pre-acquisition, but there's been an extraordinary increase in the rate of addition of new features and changes to the platform.

> especially with subscriptions being introduced as a (new) revenue stream.

I don’t think that’s ever likely to offset the massive amounts of debt Musk offloaded to Twitter’s balance sheet to fund the acquisition.

> changes to the platform.

Likely one of the most horrible rebrandings in the history of corporate rebranding?

He fired the ML Ethics Transparency and Accountability team. They did a lot of high quality work on understanding bias in opaque ML models.

https://www.wired.com/story/twitter-ethical-ai-team/

Exactly. Most of the Twitter acquisition money was borrowed, and that debt is now sitting on the company's balance sheet as liabilities.

It confirms the concern. The board broad on someone to look after the needs of the largest shareholder

Silver Lake (along with Qualtrics founder Ryan Smith) bought Qualtrics after a dizzying sequence of planned IPO, acquisition by SAP, and then IPO. They're busily evicerating it, having just announced their second big round of layoffs, and apparently there gonna be even more job losses next March. Everyone I know there is planning their escape. What's hilarious is that this round of layoffs has impacted their ability to deliver on a major internal project because a key player was canned, so the project is now in hold (again).

I wonder how many of these $$$ people are looking at Musk and saying, 'hold on, we could do that too'. It's amazing how resilient a company can be to code rot and infrastructure stagnation. It takes a long time to kill a company, once it has a customer base and decent revenue streams. You could probably fire everybody outside strictly operational teams and simply coast along on the momentum for a few years, creaming off gigantic profits. And what the hell, jack up your prices too, right?

Musks takeover of Twitter is not a particularly compelling example of this model. In a year he’s cut revenue by 40% (with every month trending worse than the last), not made it cash flow positive even with massive cuts, and is burdened it with tons of debt while making it worth much less. Twitter may turn around but right now I can’t imagine corporate raiders are looking at it as a positive example.

https://www.reuters.com/technology/elon-musk-says-twitters-c....

https://www.reuters.com/technology/us-ad-revenue-musks-x-dec...

Well, Musk did several things in close succession.

Sure, he scared off advertisers by welcoming nazis onto the platform. That's not something you'd want to replicate.

But he also fired 80% of the workforce, and the product kept working. If you have some subscription software where users keep paying $$$$ whether you add new features or not - getting rid of 80% of those expensive developers could be pretty tempting.

This is an extremely common private equity playbook, that hasn’t seen as wide adoption in software as it has in other industries because there is a presumption that software clients aren’t particularly sticky and the software space allows faster innovation. Twitter is a story that confirms that bias (so far).

I think Unity is the next big test case. If users leave the platform in droves and revenue tanks it will continue to confirm the current hypotheses. That said private equity firms will keep trying it no matter what as the market biases make it an easier space to compete so I’m not sure it matters much to software companies.

Eh, software can be pretty sticky if your users have lots of files in your proprietary format nobody else can read.

A company that uses Photoshop, or Altium, or SolidWorks, isn't going to move off it easily. Hell, existing users will often initially be thankful when product managers stop moving the buttons every 6 months.

Of course you'll stop attracting new customers as your product gets surpassed - but there could be a lot of $$$$ to be extracted before revenue drops to zero.

I would argue that much of Microsoft is built around legacy applications and code that prevents moving to alternative solutions. A lot of companies do not want to spend the time and money to pivot, not have the labor to do so. The true tech debt is a hidden cost where change is a visible cost.

Oracle and MSSQL enterprise owned my last org.

SAP offered to migrate us -- on to their new HANA platform. Guess how much that would cost?

So we still have these ancient Oracle boxes and newish MSSQL kicking around. They should be entering high school before too long...

Private equity firms are already an absolute blight even before Musk's handling of Twitter. I've seen plenty of companies get purchased, completely gutted and then they try to extract maximum value from customers as quickly as possible before all customers abandon ship as the product(s) fall apart. They truly are scum.

Oh I agree. I just think that Musk upped the ante by not being a private equity firm and still outdoing them:

1. Fire most of the company

2. Introduce new charges (blue tick worked, but the API cost was just stupidly high)

3. Then start tearing into the platform, breaking shit

The 3rd bit is what's weird. Private equity don't usually want to destroy the product that they just bought. Perhaps he thought that Twitter needed to be simplified in order to be manageable with a skeleton crew, but it still doesn't explain a bunch of user-friendly changes or the lame "X" rebranding.

Given the information posted about Whitehurst in another comment, https://news.ycombinator.com/item?id=37825689 , I strongly disagree with your assessment of him.

I agree!

I posted before that comment, which was definitely helpful - that context (and some other helpful replies here and elsewhere in the overall thread) have changed my assessment as well.

"interim replacement / transitional CEO is someone with a pedigree that, on the surface, seems even more management consulting / investor / revenue focused than Riccitiello was himself. To be clear, I know essentially nothing about James M. Whitehurst other than what is readily publicly available (IBM / Red Hat, advisory roles, etc.)."

To me, it seems he has plenty experience with managing companies.

I agree - this may be unclear phrasing on my part.

What I meant in my original comment was, "wow, this seems like a hire that is only focused on finding someone with lots of experience managing, and not at all on the gaming industry / customer goodwill".

So I think you're right - and I also think this shows how I misjudged how I originally thought a scenario like this would have played out.

I was at Red Hat while Jim was CEO. He’s very culture focused and is an excellent choice for restoring faith there. He got great results while at Red Hat, but they plucked him out for a non-CEO role at IBM after the acquisition. IMO that has been IBMs greatest sin in its handling of Red Hat.

Jim was active on memo-list and seemed to listen to people. That doesn’t mean he’s perfect, but I’d give him very high marks and I think that he had a lot of goodwill among Red Hatters as CEO.

I feel it's unfair to include Mattrick in here - he came up as a gamer, making games as a teen and rolling that into his own company so at least he has roots as a developer and I feel a dev/gamer connection but I respect your opinion.

I think yours is a fair opinion as well, to be clear - I actually debated editing him out for a couple of minutes after I first posted, because I do know that his background was truly heavy on the gamedev side of things early in his career.

I have my reasons for thinking things changed later on, but they are subjective / personal opinion based on personal experience, so I respect anyone who would disagree and exclude him from a list like this.

I’d be careful drawing too many parallels between running Unity vs running a game publisher.

Unity is a developer platform/tooling company. They don’t care about hits or franchises - they need service, stability, community, and technology innovation.

Game publishers are creative industry plays, like movie studios. Completely different business.

Of course Epic confuses things by being in both camps but I don’t think Unity is confused that they are competing with Epic in the sense of needing to outmatch Fortnite.

I think back to Ellen Pao at reddit. Ellen was brought on as CEO, and was the face of a number of very unpopular decisions. All those decisions had one purpose -- jettison the things that made the site rough around the edges, and find ways to monetize, so they could make investors happy and work on going public.

The backlash was staggering, and much of what they tried was rolled back. Ellen Pao took the blame for it, but it wasn't actually her fault. The founders just scapegoated her in order to make changes they needed for investors -- and depending on how cynical you are, they picked an asian woman so that they could channel internet racism and sexism as part of the distraction. Years later, they did the same thing, making multiple unpopular monetization changes, but this time the CEO taking the backlash is Steve Huffman himself, not a scapegoat put in front of him.

CEOs don't make decisions on their own, not really. This pricing change was the direction the company wanted to go in, and they got put on their heels, but only temporarily. They're still going to try to find ways to aggressively monetize.

That is some incredible revisionist history.

Elaborate?

What is there to say? The decisions that OP says were not hers, were hers. And the claim that they chose an Asian woman for the intended purpose of setting a racist mob against her is completely unfounded and frankly racist itself. Believe it or not, there are some Asian women out there that have qualities other than being the target of racism.

Most of the decisions Ellen Pao made, especially the banning of the FPH subreddit, was genuinely for the better. She bent over backwards, IMO, to avoid the hate - and should not have.

Sure, I'm not defending the unhinged behaviour of Redditors. But the claim that Pao is not responsible for these changes is just not true.

Ehh, given that reddit doubled down on pretty much every decision they made post Pao, I'm inclined with hindsight to think she was indeed scapegoated. Not necessarily for sexism reasons (try would happily do the same thing with Hitler as a CEO) but that's just a semi-common strategy with big business, especially towards an unpopular board member when the opportunity arises.

Really taught me not to celebrate these "CEO steps down" stories. Short of an entire board replacing itself it's just a new shade of black coming in to lead the change they want all along.

It can be both. If you are the CEO, the buck is meant to stop with you. Don't weep for her.

No sympathy for someone who can retire off their "resignation" regardless of how undeserved.

I'm just saying that I care a lot more about actions than playing the blame game. And it's clear Reddit took the bait here, hook, line, and sinker. Should have been the best time to work on an alternative and it would have been ready for the API schism if they invested those 6 years in to polishing the experience and fostering a community.

instead we got... Lemmy. Oh well.

FPH essentially put itself into a position where it had to be banned:

1. Imgur blocked its images from being shown on FPH, essentially crippling the subreddit

2. In response, the FPH mods put a collage of Imgur's overweight staff in the subreddit sidebar

3. Reddit will have had to ban the subreddit to maintain their relationship with Imgur (who they ended up buying).

> they picked an asian woman so that they could channel internet racism and sexism

Prove it.

It can't be proven, which was the entire point.

The board at the time was I think Yishan, Alexis, and someone from Advanced. Maybe Sam Altman. Ellen Pao was the natural choice because she had the most business experience of all the staff, but it wasn't the right experience. She was always more of an investor, and she got her job there by investing money in reddit and asking for a job in return. She headed up BD and what turned into reddit labs for a while. She built up a reddit labs team, but they never found the next big thing for the company.

Part of the API drama goes back to her time doing BD, making partnerships with apps, and possibly buying apps.

I doubt there was a master plan to making her CEO, but I believe Alexis's line was "it's her job to lose." At the end of the day, she was bad at making friends, was an awkward fit for the company, and was more experienced in politics and climbing the ladder than running a company.

Good background on her: https://www.vanityfair.com/style/scandal/2013/03/buddy-fletc...

Ellen Pao was a glass cliff hire.

“with consequences”

Depends how many millions he’s accepting to walk away.

Isn't Riccitiello stepping down a standard operation procedure in a situation like this?

I don't think you can really draw conclusions from an interim pick like this one.

It's who they choose after the search that will tell you something.

But things don't look good no matter who they choose. Unity has to become sustainable... that, or go out of business. Their fundamental problem is somehow getting revenue and costs in line with each other.

Here are some general ways that could be done...

* Squeeze a lot more money out of existing customers * Get a lot more paying customers * Cut spending on things that impact revenue a lot less than the cut saves

The first one is what the last CEO tried with that cockamamie licensing scheme. You could go at it in other ways but in the end the impact on customers is the same so I don't think the reaction would be a lot better.

Is there any clear way to accomplish the second, at least without an even larger negative impact on revenue?

For investors, cutting cost is the least desirable -- they want to grow, not shrink. And customers also don't like to get less for the same price. But perhaps there is a way to cut costs that would spare what provides the core value to customers, and perhaps a business guy could get shareholders to accept that it is the only way.

I concur with this, their interim CEO is the person who can do the needful things with respect to cutting executive pay, laying off people, and outright firing others. Once the organization has been pruned, the "real" new CEO comes on board and is given a shot at rebirth with a new point of view.

I don't understand how their cash burn rate is so high that a billion in revenue isn't enough to stay in the black. What are they spending so much money on?

Marketing and sales costs have increased tremendously

They've been on a hiring spree, with a ~50% annual growth rate for the past several years [1].

[1] https://stockanalysis.com/stocks/u/employees/

I'd argue that what Unity needs is someone who's got a background in enterprise software, because selling to game developers is very different than selling games. No one with (successful) executive experience in enterprise software would have signed off on Unity's original revenue plan, simply because the number one rule in enterprise is "don't fuck with the customer's business model," which the "pay per download" model certainly did. Hiring a game industry CEO who pioneered predatory monetization models and was responsible for horrifying managerial practices within and between studios was a terrible choice for Unity, and his evident contempt for developers showed through often.

Whitehurst, on the other hand, has a history of strong execution across multiple industries, and built a reputation as someone who protected Red Hat's culture against attempts from within IBM to "Big Blueify" it (possibly to the detriment of his own role within IBM). Even as an interim, having him onboard is a good sign for how Unity is looking to repair its relationships with developers.

> simply because the number one rule in enterprise is "don't fuck with the customer's business model,"

On the other hand, the continued growth of gaming revenues, for both developers and services providers, compared to all other creative industries, is all attributable to innovations in business models. I suppose if people rocked the boat as little as you suggest, the only software being sold to game developers would be Denuvo.

Something tells me there is a fair bit of wiggleroom on the line between "no innovation whatsoever" and "making a large number of my customers situation untenable." I think innovation will continue just fine. Disrupting a business model is not the same as selling software to people under terms that are obviously and immediately harmful. Unless you are really clever and they are really dumb, I guess.

You're making the exact mistake that OP warned against at the beginning: "selling to game developers is very different than selling games".

Even game studios can't just change things willy nilly. If Baldur's Gate 3 had been a microtransaction-funded F2P game, it would have been a flop—their target player base doesn't like that business model and wouldn't have gone for it. It's better to try out a new model with a brand new franchise than to try to pivot an existing franchise.

Enterprise software has these same constraints and more, because monkeying with the business model doesn't just mildly irritate prospective customers, it can and does throw off years of planning for thousands of people per company. They can't just shrug and decide to not invest in the next installment in your game franchise, they have to re-do their corporation's 5- and 10-year plans.

[M]onkeying with the business model doesn't just mildly irritate prospective customers, it can and does throw off years of planning for thousands of people per company.

This, very much so. Unity made two cardinal sins: creating a pricing model that didn't align with customers' business models (tying price to downloads rather than revenue), and then attempting to apply it retroactively to existing contracts (which, at best, would have resulted in high-profile and ugly legal battles against their largest customers and, likely, would have ended in a judge slapping their lawyers around with a copy of Williams v. Walker-Thomas).

In both cases, creating business model risk and uncertainty drove developers towards other software choices, not because developers are opposed to Unity asking for an engine license fee (after all, they already incorporate console fees, app store fees, etc. into their business models), but because Unity created financial uncertainty: they couldn't forecast those fees with decent probability and precision, and because they no longer trusted Unity not to try to retroactively screw them years down the road. Unity fixed the first problem, but now they've got to work to win back trust on the second.

Thanks for introducing me to Williams v Walker-Thomas. In the ocean of Paywalled Law School Study Guide SEO, I can't find anywhere that tells the last chapter of the story. In light of Wright's decision, how did the lower court finally rule? After being given permission, did they actually follow through and throw out the contract?

It seems obscure, you’d probably have to pay for the records.

https://chat.openai.com/share/537dd325-1c5c-422b-8b4a-a44852...

Apologies for not seeing this earlier; faced with an unfavorable ruling (and, I believe, the UCC coming into force in DC around that time, which surely couldn't have helped their position), the store dropped its attempts to repossess the furniture in question, and settled the case with a damages payment to Williams.

>Unity made two cardinal sins: creating a pricing model that didn't align with customers' business models (tying price to downloads rather than revenue)

Everyone is assuming the majority of Unity's customers ("most" as measured by $$$, not by quantity of devs) aren't F2P games. I'm not sure that's actually the case; if most of their revenue comes from F2P then shafting everyone else in order to shore up their F2P business would likely be the correct business decision.

I'm not sure I follow. Aren't F2P games most misaligned with pricing per download since that means they end up with a bunch of negative value consumers and complete uncertainty whether they will end up with a positive or negative balance since they can't know much they will expend?

The traditional game developers can just go "Unity takes 1$ per download (or whatever), the average player downloads 3 times, the game costs 10$, 3$ goes to the storefront, so we have am average profit of 4$", which seems simple enough to deal with to me.

> complete uncertainty whether they will end up with a positive or negative balance since they can't know much they will expend?

Which forces them to use Unity’s Ads and other services which can be used to offset the per install fee. So on paper Unity would win either way.

>st change things willy nilly. If Baldur's Gate 3 had been a microtransaction-funded F2P game, it would have been a flop

Hot take, but I think it would have been fine financially. Would the online consumers and even media drag it through the mud? Definitely. But I reckon console gamers have less than a 10% chance in correctly predicting some f2p model would crash and burn.

Now I can't say if it'd be more profitable than selling as premium, because it didn't target mobile and that is the real market for that monetization. But I doubt it would have crashed.

It would've had to have been an extremely different game though. F2P P2W shovelware games are designed as such from the ground up. You can't just add micro-transactions to a normal (especially story driven) game and hope to make significant amounts of money.

Riccitello is the poster boy for failing this lesson:

- Dungeon keeper mobile - Ultima Forever

> Whitehurst, on the other hand, has a history of strong execution across multiple industries, and built a reputation as someone who protected Red Hat's culture against attempts from within IBM to "Big Blueify" it (possibly to the detriment of his own role within IBM). Even as an interim, having him onboard is a good sign for how Unity is looking to repair its relationships with developers.

100%

I was at IBM at the time. We really hoped he would eventually take over from Ginni once she left... nope. We really could have used someone who wasn't drinking the blue koolaid. Well.. the rest is history.

All this other crap about Silver Lake being a giant POS is concerning though.

Arvind Krishna seems like a pretty cool guy though, and definitely has engineering background.

It's interesting that everybody focuses on Red Hat after acquisition but no one ever asks how IBM is doing now. Maybe it's delusional to think that Red Hat could change something of its new overlord, but perhaps the acquisition was already showing the desire to change IBM from within?

IBM is doing okay, but not great. Their fiscal peak was a decade ago, and in terms of real dollars they aren't even at pre covid numbers yet. And on what little I know of the mainframe side, IBM is still very IBM-like, except they will now occasionally concur with consultants who point out places mainframe consumers are needlessly spending money.

It just felt like more of the same. I left soon after (2020) so perhaps things are changing. Was gutted to leave, IBM was always one of those mythical places to work for me, but in the end I made the right choice. Perhaps one day I'll go back, ha who knows!

“When you are six hours into playing Battlefield and you run out of ammo in your clip and we ask you for a dollar to reload, you’re really not that price sensitive at that point in time" - John Riccitiello

Amazing that he could so correctly identify why price-blinding tactics would work on people trying to have fun, but not do the inverse and see why it wouldn't work on people trying to develop a product.

You're right that selling a game engine is more an enterprise software business than game publisher, but Unity isn't trying to be a software company at this point, they're an ads and analytics service company, maybe doing a 'big tech' cosplay.

If anyone can save the stinking ship that is Unity, it’s Whitehurst.

This is said by someone who wants nothing more than to see Unity die.

Whitehurst was pretty instrumental in getting Red Hat sticky in places where it was just RHEL. Open Shift, Open Stack, etc all drove value-add for the business and for their customers. Cloud is fickle though so selling tools to studios and trying to compete with Unreal in the VFX space is how Unity moves forward. Take your lashings from the game devs. Shore up your presence in VFX, Movies, Film. Evolve.

The tsunami has squarely landed on Godot’s doorstep. It will be up to them on how they manage the swell.

While I don’t think you deserve to be downvoted for this, your comment is full of opinions that, as a game developer, sound 200% wrong to me. For the sake of curiosity… what are you talking about?

I’m talking about Jim Whitehurst taking Unity in a different path and leaving us game devs the f#^k alone. We’re done. Go sell to movie studios, VFX shops, Video Wall Warehouses, digital twin and construction. Sell enterprise software subscriptions.

I think we both agree that small indie studios will not be returning no matter what promises are made, who is CEO, or what new shiny monetization idea they come up with next.

I wish him the best of luck.

> I think we both agree that small indie studios will not be returning no matter what promises are made

One thing I agree on: more often than not, behind an interesting piece of art lies an interesting personality.

To advance the conversation based on some substantive facts, based on my conversations with creators of large free to play Unity games, all were already using IronSource and were not impacted by the changes anyway. As a game developer who publishes himself, I do not plan to migrate away from Unity, and I wasn't really impacted either. I can't speak for the 30 or so studios who posted pleas to revert the changes, but based on what happened, I believe they got what they wanted. So if their decision-making is rational / based on facts, I don't think they're migrating either.

This is all to say that when you have no budget, so you value your time at zero and you have no visual art you didn't author yourself, it's easy to put 100% of the personality into the product, and make that The Thing. There are people I know who turned 20,000 followers on a TikTok about games into a $1m check for a game studio! This is a viable strategy, it is uniquely suited to people to have opinions about game engines. But my facts-informed opinion is that this isn't representative of most game developers, and that they are actually really happy with Unity and relieved that the pricing changes found a middle ground that is less emotionally charged.

What did I just read??? "Substantive facts"? That was all opinion. You didn't even directly respond to the poster until your last sentence and there you declared your opinion to be "fact-informed" and assigned both the feelings and actions of the average Unity dev using your, at best, subjective experience.

Just want to second this.

I've been using unity for almost a decade now and enjoying it despite the many caveats and idiosyncrasies I come across.

The bottom line is, I definitely don't want to throw away the decade of experience I have using Unity if I can help it. Ultimately I want them to learn from their mistakes and move forward. While Unity has had a fair share of missteps ultimately it's the devil I know.

I'd like to ask (only out of genuine curiosity): Do you also build your own engines or are you fully entrenched and dependent on Unity? I would feel very disappointed if I spent a decade on something only to depend exactly on that one thing and not be able to create it myself, especially when it's such a tractable problem in a sub-year time frame even with learning happening. The fit you could have with your own engine with a bigger up front investment of time and energy seems like it would easily pay off vs. just using Unity for years and years.

Not only sunken costs, but building an engine is no easy task. It’s easier to write a game than to write an engine (most of the time).

I do think this is the right approach. This is the approach I took. I was dependent on an engine for a long time until I realized it was just a facade and that I already possessed the knowledge to do it myself. So when XNA died, and MonoGame wasn’t mature yet, I had no choice but to write my own. Some of that effort went into MonoGame’s early days, most of it didn’t (I respect keeping the API the same but we, devs, could have done better to improve it).

Unity made it easy to build games without having to know the underlying proponents that do what they do. Instead, it’s presented through a massively opaque interface called a MonoBehavior. Because of this opaque abstraction, it’s almost impossible for a Unity game developer to know exactly what’s going on under the hood.

My first game engine took me 3 years to get to a point where I could ship something. My second was 1 year. My latest was 3 months.

Eventually, it becomes just adding another interface to your GPU abstraction to support wgpu or DX14, or Vulkan2, or Metal, any graphics api becomes just a Buffer, a Queue, and a sync lock.

Small studios absolutely will return to Unity. This whole debacle will be a faint memory a year from now, the marketing machine will continue and indie developers will become entrenched in Unity's C# ecosystem, build tooling, all-in-one package + asset store. Some indies won't return sure, but Unity will continue to maintain it's foothold with indie developers.

> entrenched in Unity's C# ecosystem, build tooling, all-in-one package + asset store

instead of indies, i think this applies much more to mid-level studios. Indies tend to be much more flexible and agile, esp. very small indies. Mid-level studios, with a dozen people that have gotten used to the toolchains and have existing investment in it (any custom plugins for example), would have a harder time switching away.

However, this whole debacle just goes to show that proprietary software may be a trap, unless the T&C explicitly clarifies and makes it _not_ a trap. This is what unreal engine has done (you at least will always remain on the same T&C for the version you signed it for).

Open source is a much safer bet for the long term for an indie, esp. if they're just starting out now and do not have toolchains attached to unity. And the godot ecosystem is just budding right now, which means the opportunities are also great there.

> which means the opportunities are also great there

Opportunities to spend significant amounts of time working on tooling and other engine features (with a non insignificant likelihood of still ending up with something inferior to Unity depending on your use-case) instead of actually making your game?

Yes, what Unity's management tried pulling off was stupid. However The engine itself is remarkably cheap from the perspective of many developers compared to any open source options.

> unless the T&C explicitly clarifies and makes it

Funnily enough IIRC Unity had a similar issue with the T&C back in 2019 when they promised to never change it retroactively again. Somehow they managed to "forget" it in a couple of years...

I guess one important difference with Unreal is that Epic has way less bloat (several times less employees) and make huge amounts of money from Fortnite so they don't need to try and squeeze as much as possible from their engine clients (currently anyway..)

> T&C back in 2019 when they promised to never change it retroactively again.

it's not about changing it, it's about including a clause in the T&C that the version they signed is the version in perpetuity for their version of software (obviously, an upgraded version may have the T&C changed).

Unreal has this clause iirc, but not in unity.

Yeah, I was talking about retroactive changes of course (and not changes for future versions).

Their founder/CTO (who seems to be MIA these days) published this back in 2019:

https://blog.unity.com/news/updated-terms-of-service-and-com...

"For this reason, we now allow users to continue to use the TOS for the same major (year-based) version number, including Long Term Stable (LTS) builds that you are using in your project."

Which is something they presumably "forgot" about...

yea, they did "forget" it. It's because this condition is _not_ in the TOS! It's a side-channel communication/agreement.

The unreal terms[1]:

> 7. The Agreement Between You and Epic

> a. Amendments

> If we make changes to this Agreement, you are not required to accept the amended Agreement, and this Agreement will continue to govern your use of any Licensed Technology you already have access to.

vs the unity terms[2]:

> 23.2 Changes to Terms

> To the maximum extent permitted by applicable law, Unity reserves the right from time to time to (and you acknowledge that Unity may) modify these Terms (including, for the avoidance of doubt, the Additional Terms) without prior notice.

[1] https://www.unrealengine.com/en-US/eula/unreal

[2] https://unity.com/legal/terms-of-service

> _not_ in the TOS! It's a side-channel communication/agreement

I never implied it was otherwise.

However if we look at their TOS from 2019 (the time of this blog post) they do have this:

> if the Updated Terms adversely impact your rights, you may elect to continue to use any current-year versions of the Unity Software (e.g., 2018.x and 2018.y and any Long Term Supported (LTS) versions for that current-year release) according to the terms that applied just prior to the Updated Terms (the “Prior Terms”). The Updated Terms will then not apply to your use of those current-year versions unless and until you update to a subsequent year version of the Unity Software (e.g. from 2019.4 to 2020.1)

I don't think the section is still there anymore? But presumably it still applies to you if you haven't upgraded past 2018/2019 versions. But it was actually in the TOS (just like for Unreal) which I didn't expect.

*https://github.com/thaliaarchi/unity-termsofservice/blob/243...

They probably will now, but if they had gone through with those changes, they would've lost a lot of studios.

I'm not so optimistic. They changed the model and JR is out. Unreal is way too bloated for many indie dev projects and Godot isn't ready yet. That may be enough goodwill for now.

maybe if this happened two years down the line and W4 Games had more time to establish itself (maybe even make it's own game to inspire confidence) it'd be a different story, but I can still see indies coming back. If they ever left to begin with. And this isn't even talking about the corporate giants in the mobile space.

> I think we both agree that small indie studios will not be returning

Why are you so certain that a significant proportion of them even left in the first place?

As an employee at Unity, I can assure you they did.

So they actually cancelled their subscriptions and/or stopped development of their current games? What proportion of all developers did that?

> As an employee at Unity

I don't think they are even remotely close to being as transparent internally as they used to be a few years ago. Also as far as I'm aware sales data wasn't accessible to every single employee even back in those days?

Unity is common in small indie studios because, for so many use-cases, it's the only game in town. for most 3D projects, Godot isn't ready yet, so their only option is Unreal. Which is substantially what Unity replaced in the first place.

Give it 5+ years and another screw-up from Unity at the tail-end, and I 100% agree that Unity is sunk for indie devs. But as it is, Unity has a grace period where devs are locked-in and if Unity can demonstrate stability over the next few years, then people will forget it.

And yes, if. Unity's current PR position is in a fully-stocked rope warehouse, but they could navigate out relatively unscathed.

>”Unity is common in small indie studios because, for so many use-cases, it's the only game in town”

I wholeheartedly disagree. There’s more choice than ever. A search on GitHub would show you.

Unity has had one thing going for it. It was easy to get started and it had a ton of learning material. It is NOT the only choice. Off the top of my head there’s:

- Ogre3D

- O3DE

- MonoGame

- GameMaker

- Godot

- Cocos2d

- GDevelop

- Pandas3D

- Reactor

- Stride3D (formerly Xenko)

- Three.js

- Babylon.js

Unity’s editor first approach and their C# “everything’s a behavior” is why so many think it’s the only game in town. It’s not. It never was.

RedHat customers and Unity customers make for two very different types of beasts...

It will be interesting to see how his Whitehurst's pedigree translates to this smaller-scale, higher-touch sales motion.

Forgoing the core Unity audience of game developers and gunning for studios / VFX when Unity is clearly not the graphically superior engine sounds risky at best, reckless at worst.

>”RedHat customers and Unity customers make for two very different types of beasts...”

You misunderstand. They have different verticals but Jim’s mission is the same. Sell them tools at enterprise subscription prices. Per seat, per project, per shot if they can. Forget the indie game devs and their small studios. That bridge is burned beyond recognition or reconciliation.

I'd rather fix that bridge than bank on an non-existing bridge to enterprise customers with an inferior offering and no cash flow to meaningfully fund R&D to outpace competitors.

The problem is that in gaming, its often the indie studios that are the most profitable. They may have only 10 staff, but easily make 50 mil a year. Traditional industries rarely have such lopsided staff/revenue ratios.

And small indies may transform into large enterprises surprisingly fast. Mihoyo was a small indie only 10 years ago.

Its much much easier to repair bridges with indies, who don't really want to move off unity as much as you think, and can be placated by backpedaling and the CEO replacement.

> They may have only 10 staff, but easily make 50 mil a year

Considering Unity's previous pricing model (per seat) it really didn't matter that much whether their client made 5, 10 or 50 mil unless they massively increased their hiring because of that, unless they can charge per install/% of revenue.

> Traditional industries rarely have such lopsided staff/revenue ratios.

A negligibly small proportion of indie developers are even close to that.

Do you have examples for indie game studios (with 10 employees) that make 50mio a year?

It's an industry of booms and busts, we've all heard about the head of Xbox discussing the risky model of large publishers, making expensive sequels until the well dries, and everything collapses. Selling to the largest companies is more difficult too: Slower decision making, more negotiation. It's the road to having a working business, but not one for growth.

It's just so much easier to get your product ingrained into a company that is growing, as long as you are getting your revenue tied to theirs. Their growth becomes your growth. But it has to be done in a way that makes them not run away. Offer different funding models depending on the project on the other end, and let the customer pick their pricing plan. When the plan for the small company starts looking too expensive for the big one, you get to renegotiate when your tools are already everywhere, and moving away is a hassle.

It works for AWS, Stripe and the like. It should work here.

I wouldn't call Unity a sinking ship. It's the overwhelming choice of game engines in the mobile market. Raising prices is unpopular and may decrease their share of the market. But there is no way Unity is going away anytime soon.

And I love Godot -- love it-- but it doesn't do all the things Unity does. Even if it did, it would take years to get all the teams to switch. Think how long it took people to move away from Flash!

You underestimate the game industry I think. It constantly invalidates its own technology every 2-3 years and is extremely sensitive to business model risks.

> It constantly invalidates its own technology every 2-3 years

I'm not sure about that. Unity itself is not at all a particularly modern engine (just like most engines being iterations of something designed in the 00s or early 10s)

Rule of thumb in AAA: After 3 years devtime you are starting to pay serious debts by tech updates - that’s the descent into development hell.

This. It’s easy to criticize or idolize from the outside. When you’re in it, any time spent beyond innovating is wasted R&D. It might be justified. It probably isn’t. This is one of the main reasons Unreal went open source. Let the community drive R&D on their own dime.

Well if whitehurst follows his normal playbook he will just Aquirehire the godot project leads so then unity does not have to worry about it

Don’t curse us. That would be the MO but please, leave some choice in the markets.

On the bright side, if they do that Godot will just Fork, the same way Urho3D did. This would be a big bow but it may also be a small chance to truly dig in and fix some of the issues that were talked about for years in the community.

But I'm probably just daydreaming.

Wait, what happened with Urho? I thought they were going strong (aside from a few who tried to take their code and just rename it)… did I miss some news?

This link gives a brief explanation: https://gamefromscratch.com/urho3d-is-dead-ish/

You can also see that the Urho3d repo is readonly on Github. I don't know which fork is the most active but there are a few that sprung out of the mess.

I don't think the strategic action of a CEO is too relevant right now. The need to focus on rebuilding trust and I just cannot see how they will do that. They introduced an insecurity for developers, which already operate in an extremely high risk industry.

If there weren't people at Unity that could influence or stop the former CEO, the problem probably also didn't vanish with his termination.

I agree with all of what you said but having known Jim Whitehurst, he’s a guy who’s die hard about culture. Fixing the anxiety from within and giving people the space is what he’s known for. Whether he makes the right strategic decisions is up to him but if you have read anything from him you’ll know he seeks to improve excellence within to then champion externally. He did this with Red Hat before IBM. His book, The Open Organization is still relevant.

> board actually hold Riccitiello responsible

It could also just be a PR move. Riccitiello is disliked among Unity customers, so you get goodwill by firing him.

Bring back engineer CEOs. I'm sick of this trash.

Unfortunately, in our economic system this is not allowed unless that engineer CEO happens to have incredible clout, financial control or both.

Don't be silly, we're in the era where engineers are both smart enough to wrangle massive technical goals yet also need many layers of babysitting from their betters.

You may know what a CRDT is, but (apparently) the Trello board is beyond you.

> was that one of the increasingly common "management consulting" / investor- & revenue-focused type of gaming executives

My read of this debacle is that the Unity CEO did not pay attention to details. It's as if he had ever thought of how the policy would play out -- a signature move of a corner-office boss who simply delegates everything about product to his lieutenants. Or worse, to the lieutenants of lieutenants.

This is in such contrast with those founder CEOs, who painstakingly think through product and policy changes.

It's the standard playbook. By having the CEO leave it gives the impression that it was his decision and so the bad decision-making is gone and now the company can be trusted again. Of course it wasn't his decision; it was the whole board's, but it's convenient for them and their stock price to make it seem like it was his.

No way to know, I suppose, if it was him + the board vs everyone, or him vs the board... but unless somebody leaks the details, I'd assume the board is just as culpable.

You have a rosery view of the board. I on the hand believe that the it was the intention of the board to sell that ridiculous plan. The CEO was a scapegoat, or rather, he was going to leave anyway, so he took the blame in place of the others.

You're acting like the board had no say in the horrible decisions.

It doesn’t seem that wild for a board to be looking to increase revenue results/shareholder value, especially in current economic headwinds.

If none of the board is industry, and none of the major shareholders are industry, why would they hire industry? Finance is becoming the only job that exists.

Who do you think made these decisions? The board still wants profits, and they're perfectly happy to let Riccitiello take the fall while they find another tool to take his place.

Remember that executives are never fired for bad decisions, they are fired for bad press. The Unity business model & strategy changes/price hike were most definitely approved by the board. The CEO's job was to make it digestible to the general public, and he failed at that. Don't expect the new one to pull a 180. He will simply hire better PR firms and do better sugar coating.

But who proposed those changes? Ultimately the CEO is accountable.

The board

I'm not an expert on corporate governance, but does a board of directors get into the nitty gritty of pricing models? I can totally believe they told the CEO to "bring in more revenue, or get replaced", but I have a hard time imagining they got too involved in the details how that would happen. Many board members sit on multiple boards or are CEOs of other companies. Do they really have time to do the kind of market research you'd need to propose such a change?

Having been in board meetings where members went in on the nitty gritty of our _salesperson_ compensation structure, I would say yes.

Public company boards?

They'll sure scrutinize this or that, I'd be surprised if they _suggested_ a salesperson compensation structure.

Nah, it'd fit. Everyone knows that sales is the only part of the company that actually makes money. Everything else is just a cost center that needs to be shrunk aggressively.

I'm an "expert" on corporate governance and I can say that no, boards do not get involved to the degree of making any market research -- they don't "initiate" initiatives such as a pricing model change (if you will pardon the redundancy). Public company CEOs (and their teams, really) come up with these plans. Boards do vet the executive's team business plan at the time of budgeting and during quarterly updates, but it's the CEO who is in charge of ideation and execution.

Board members aren't doing research, bud. Lol

Research and information is compiled for them, which they then review.

What're your thoughts on politicians who are in multiple subcommittees? Not smart enough?

A majority holder on the board dictates how the company operates. It usually goes like give me a plan to get maximum revenue so I can collateral the company to get more debt to acquire other company or get me maximum profit so I can exit and invest on other company.

It is not the role of the board to make executive decisions like this. That's what the 'E' in CEO means.

In certain companies, everything above a certain size (money spent or count or items or staff affected) requires a board decision, by charter.

Negative, it's the CEO.

Unity has been hemorrhaging money, and the shareholders want to see profits. The board and the CEO have no choice but to execute on their demands.

> The CEO's job was to make it digestible to the general public, and he failed at that.

No. It was to either do that or be the scapegoat and take the golden parachute. Either way it's wins all around.

Now he can be blamed for the board's decisions. Meanwhile it remains to be seen how much anything will change. After all, the cause of the problem is gone now, right? /s

And it will fail again. Companies that target indie creators really don't fit into the VC model. Their customers will riot every time they try to maximize profits.

Unity, like every other shitty tech company these days, is just an ad company. Their customers are ad purchasers, not game devs.

But just like Google has to make sure you keep searching on google.com and keep watching youtube, Unity has to make sure people keep playing Unity games, which requires people to make Unity games. You can't sell ads when you don't have anywhere to put them.

Arguably, Unity could survive without the game engine -- they just need to survive the consolidation of the mobile ad business. Many companies already used Unity Ads without using Unity engine, even moreso after the acquisition / near merger with Ironsource. That acquisition was entirely about staying a step ahead of the consolidation wave, and nothing to do with the engine.

Of course, while that idea may be arguable it's also absolutely idiotic. But I won't be at all surprised if Unity continues to steer in that direction, especially now that the Ironsource people comprise a large part of the company.

Unity is mainly targeting mobile games studios, who are certainly not indie creators, but are pretty big companies themselves. I don't think that indie game developers who release games on steam make up a significant portion of their income.

But what class of customer doesn't riot when they try to maximise profits?

What makes a bad decision then? Excellent press while customers still bailing out wouldn't make it a good decision would it?

> The Unity business model & strategy changes/price hike were most definitely approved by the board.

I mean.. maybe? But it would be surprising.

> Remember that executives are never fired for bad decisions, they are fired for bad press.

Executives are fired for bad decisions all the time. You just don’t hear about it when there isn’t bad press.

No, a citation is not needed. It’s entirely normal that poor performers are fired. What is utterly implausible is the idea that poor performers are never fired. That’s a weird fiction people like to repeat here that doesn’t stand up to the slightest amount of thought.

If by "normal" you mean "reasonable", then you're right. If you mean "common", then try working at a large publicly-traded company for a few years. I agree that this stance doesn't stand up "to the slightest amount of thought", but yours doesn't measure up to the reality in the field. The reason people are saying something that makes no sense is probably because it's actually happening a lot.

I work in a world-famous publicly-traded company and previous top head was unceremoniously fired when their superiors realized we're years behind competition on a lifeline product.

That's good! One example. But we need thousands more to be able to say this is common though.

There's a reason the term "fail upwards" is so commonly used.

Regardless of that product, how long was he making bad decisions before he was replaced? If it's less than two years, are you hiring? :)

Often with an absurd golden parachute though.

Wait until you hear who was until recently the chairman of the board.

It makes sense the CEO would either step down or be forcibly removed by the board.

Unity's mishandling of the Runtime Fee policy announcement has caused permanent damage to their reputation. It was a perfect case study in how to undo decades of trust-building in one day.

I follow a lot of game developers online. Every single one that uses Unity today is planning to switch engines for their future games.

Nah, this was mass hysteria.

Nah, people in position of picking the engine for the next project are not going to pick Unity.

At least one publisher jokingly (but not jokingly) said "developers: make sure you include which engine you're using next time you pitch us a game!"...

That's normal and has been for years. Your choice of engine affects your business model.

Yes but a very public tweet about it in the middle of this Unity debacle was not accidental timing or just a random reminder of this fact.

When they tell you that you have to report your installs and sales each month just like you do your taxes, that's when you notice there are other free engines.

It's not "mass hysteria" to observe that your business partner is willing to attempt to retroactively change the terms of your arrangement with them, and therefore decide they aren't trustworthy as a business partner. The actual monetary cost to developers is actually quite inconsequential compared to the lack of integrity Unity showed in trying to make this apply to games which were already released.

I think the concern is real but I don’t think there is another viable competitor to Unity

Unreal

"EVERYBODY disliked that" is not hysteria

> I follow a lot of game developers online. Every single one that uses Unity today is planning to switch engines for their future games.

Will all of them switch to Unreal, or are there other viable options?

The biggest share of Unity is 2D mobile games, something Unreal is not particularly suited for and I very much doubted that segment of the market will switch to Unreal.

Defold, the engine by King that powers Candy Crush, is a solid free contender for 2D mobile games.

Unless a very major rewrite happened in the last few years, Defold absolutely does not power Candy Crush, in fact to my knowledge King has never shipped anything in Defold and it's fallen almost entirely out of favor internally.

All the Candy Crushes as well as several other games use variants of a custom internal engine that's managed by a fairly sizable central team.

Ah, you are correct about Candy Crush. After being promoted by your comment to investigate further, I see that King seems to only ever have released one game using the engine: Blossom Blast Saga in 2016, at least according to the showcase[1].

It seems that Candy Crush predates the engine by a few years and that the engine was originally created as a hobby project by one of the King employees, although it’s seen commercial use on mobile by a number of studios and has received backing from King and others over the years. King are not currently listed as a backer of the Defold Foundation, but one of the board members is the “director of engines” at King.

[1] https://defold.com/showcase/

most of the 2d ones are looking to Godot

I use Unreal professionally but on the side when I make smaller 2D games I am using Haxe/Heaps currently (although haxe/heaps can do 3d perfectly fine I'd probably stick with Unreal in that case due to experience).

Godot seems to be the way people are going right now though (I haven't tried it).

I also recommend for people to take a look at the haze library called Kha, if they are after the same kind of low level rendering that libraries like Monogame and Raylib offer.

Interesting, neat that you can run it inside a WPF app. I'll read up on that. I was a huge fan of monogame/xna back in the day.

How is Haxe in 2023? I tried to get into it a few years back but somehow I couldnt quite break the barrier to entry where it was fun to use

It is very alive! The Discord is where most of us hang out, but there are quite a lot of new stuff to mess around with and use :). Check out...

- https://ceramic-engine.com/

- https://github.com/RobertBorghese/reflaxe

I just started using it after not using it for about 5 years. I used to use HaxeFlixel for making small pixel art games but moved on to heaps.

I'd say it's better than ever! I'm not a big VSCode user but it has some really nice integrations that it convinced me to use VSCode.

Here's an article on a neat stack that Shiro games uses https://haxe.org/blog/shirogames-stack/

Godot ia gaining market share like crazy and I wouldn't be surprised to see it overtake unity in the future.

Doesn't really matter if they're mostly indie game devs that weren't contributing major revenue to Unity anyway.

Indies aren't limited to single-digit sized teams, and even if they were, devs "graduate" out of indie studios into AAA ones (through growth or migration). The skillset of the next decade of new indies deliberately excluding Unity will influence the decisions made by the AAAs that they move to. Anybody too small to be negotiating custom license terms with Unity just learned that they can't be trusted.

In my spheres (full-time game dev), I've already seen ripples down to teachers/professors switching from Unity to Unreal in their courses. Many of the content creators I've enjoyed in Unity are also either switching or considering switching to another engine for their videos. Brackeys allegedly even said he might come back and start a Godot series. It's a long tail of ripples that reduces the number of "Unity devs" at every stage of their lifecycle (learning, starting out, graduating to small studios, etc) which doesn't bode well for Unity long-term.

Most A/AA devs I follow are planning to switch to another engine when they can (e.g. not mid-project), but I know a few who immediately started porting to Unreal/Godot. Most AAA devs I know already don't use Unity.

Unreal is even more expensive and requires reporting your revenue to pay for it. How is that a better option than Unity?

Even though the walked back the price change this time, Unity still contends that they have the authority to increase the price and apply that price increase to old versions even if the users don't agree [1].

Unreal lets users stick to a license with predictable fees.

By using Unity you are still agreeing to a liability with no limit that can change at any time and your only recourse is to cease development or stop selling your already-complete game.

1. https://forum.unity.com/threads/unity-plan-pricing-and-packa...

doesn't address the initial comment's concerns

It directly addresses it: the single-digit % cash difference in profit-sharing between Unity and Unreal's programs aren't what most people are worried about with Unity's changes.

The bigger issue is that Unity is trying to assert (again) that they can retroactively change your licensing agreement at any time, and for any reason -- and have explicitly said they reserve the right to increase these fees (which, yes, are less than competitors right now) in the future.

> Unreal is even more expensive and requires reporting your revenue to pay for it. How is that a better option than Unity?

With their new changes, Unity also requires reporting your revenue/installs. In terms of the cost difference, the consensus seems to be that people will pay a little more to lock into a predictable license that can't infinitely add unpredictable fees later, even on games for sale that are no longer in development.

Unreal has yet to state that they have the authority to alter the terms of the deal at their whim. Who would ever choose to do business with someone who believes they can unilaterally change the business agreement?

Yeah, there probably won't be any second-order effects.

- John Riccitiello

It's not about revenue, it's about mindshare.

This is why Microsoft doesn't care if people pirate Office tools for private use, because if they get to a position where they can decide what tools to use for a company, they'll pick what they know. Office.

The same works for Unity, if an indie company becomes a AAA level studio, they'll use what they know and what they have been using for years.

Now there's a risk that it'll be something that's not Unity.

Hold on, unity did not mishandle the announcement. They mishandled the whole policy. It was poison that no game developer would have accepted.

Both fit - the announcement was a massively confusing mess, with slightly different information in many locations and none of it clear, leaving everyone guessing what their soon-to-come-due cost would be for days while they completely failed to get their shirt together.

Unity didn't mishandle the announcement. They were actually quite clear about their brazen rentseeking, and that made the decision to switch pretty easy for new development.

James M. Whitehurst is new CEO, previously at IBM, but originally CEO of Red Hat. He joined IBM after they acquired it.

https://en.wikipedia.org/wiki/Jim_Whitehurst

He wrote a book about open source software while running Red Hat, The Open Organization: https://www.redhat.com/en/explore/the-open-organization-book

He is an MBA, but he got his undergraduate degree in CS from Rice.

His wikipedia article says he got his BS in CS from Rice.

Has the comment been edited? That's exactly what doomlaser said.

It said Harvard

His MBA is from Harvard Business School. Undergrad CS at Rice.

Whitehurst went to Rice University for Computer Science

It is true that Whitehurst went to White University for Computer Science and I do not know why we are astroturfing that fact. /s?

> ... originally CEO of Red Hat.

When he joined Red Hat, he was widely known as having turned around Delta Air Lines fortunes.

I have to give it to them - who knows what they’re thinking - but the fact that they adjusted the pricing scheme and that the leader is leaving at least suggests they’re taking (and have took) the feedback seriously.

That being said, even before the drama, unity was a sinking ship that was not profitable. Something will have to give eventually.

>> That being said, even before the drama, unity was a sinking ship that was not profitable.

Surely the new pricing is the solution to that? The fact that we have these massive companies, creating complex software, used by tens of thousands of people to build their own companies, and they are unprofitable is insane. Their original pricing scheme was a mess, but charging more generally and becoming profitable is good for them and therefore good for the tens of thousands of companies building their businesses using Unity software (given that Unity doesn't die and they don't have to retool their entire dev stack).

I mean John fucked up the delivery of the message, somehow the cheapest pricing scheme I've ever seen was interpreted by the customers as an example of dastardly extreme greed, and the fix was to roll out a much more expensive pricing scheme. Something was lost in the sauce and that was all John's fault.

The biggest problem was applying it to already released products. You have to give the developers the chance to pivot their business model to meet the new reality. They can't do that for already sold products that they would still be charged for under the new scheme.

If they tried to enforce that on previous version they'd get sued from all directions for contract violations. It was never going to work like that, there's no way Unity could have even afforded to defend themselves against such a barrage of lawsuits.

So the only question remaining is this: Did they announce these changes with the intent to walk them back to something else, or are they really that stupid?

My bet is on the latter, honestly.

During the initial kerfuffle, a Unity employee did quote one of their lawyers saying the following[1]:

> Our terms of service provide that Unity may add or change fees at any time. We are providing more than three months advance notice of the Unity Runtime Fee before it goes into effect. Consent is not required for additional fees to take effect, and the only version of our terms is the most current version; you simply cannot choose to comply with a prior version. Further, our terms are governed by California law, notwithstanding the country of the customer.

The communication around this rollout was absolute rubbish. Even employees were trying to get clarity, and they were forced to figure it out and real time.

[1]: https://forum.unity.com/threads/unity-plan-pricing-and-packa...

> Further, our terms are governed by California law, notwithstanding the country of the customer.

So presumably if you’re a customer in the EU you’re still doing business directly with their CA HQ and not an office registered in Ireland/Luxemburg/etc. (pretty much how every other major company does it?)?

Then again why wouldn’t you say stuff like that as a lawyer? The fees from all the lawsuits would’ve been pretty immense (regardless of who wins..)

I know for me (as someone who would likely never have had to pay a dime under either pricing scheme) the crux of the issue was unilateral, retroactive changes to a license that was supposed to be tied to the software version, as well as the nebulous "we'll know what to charge you because of our proprietary data model, trust us" messaging that they first went with.

That, combined with the fact that there was no safeguard for the install fee to be capped at some percentage of gross revenue made it so clear that they were trying to get something out of their free to play market specifically, which seems to have been to force their F2P customers to use their Unity Ads service over Applovin or similar competitors since they gave credits towards the runtime fee if you vertically integrated with Unity.

The issue also was that the lowest pricing tier was horrible for a lot of the companies that were Unity’s forte. It was massively out of touch.

Not really. It’s just that they didn’t realize that their byzantine pricing model was far too complex for many people (who looked at it for 5 seconds and jumped to Twitter) to understand.

Almost nobody who could do basic math would’ve paid the $0.2 fee. They would’ve just upgraded to pro (considering that’s something they already had to do if their company’s revenue* was above 200k under the old model).

* the fact that Unity switched from a per company rev. limit to a per project one was also a significant discount to some users (e.g. if you work in an actual company but need Unity for a temporary/side project you now get it for free).

There were definitely many free to play games that would be overly negatively affected.

I’m not sure why folks appeal to a smug sense of “well I can do math”. You most certainly cannot account for every single case.

Free to play based on their initial plan of install based metrics with no revenue cap would have become infeasible unless you also happened to use Unity’s ad network.

> would have become infeasible

Considering how high CPI is for mobile game ads ($0.2 to $2.5 or so depending on country) I don’t believe that would have been the case.

Of course the fees would still be significant for a large proportion of F2P developers and possibly crushing for those who make very little per user.

> I’m not sure why folks appeal to a smug sense of “well I can do math”

I was aiming that entirely towards the people who were focusing on the $.20 fee. Doesn’t make Unity’s announcement/model any less stupid but I’ll reiterate that only those who can’t do basic math would’ve ended up paying that much.

> Surely the new pricing is the solution to that?

Not directly.

$1,625,000,000USD spent buying Wētā.

$4,400,000,000USD spent buying IronSource (I think? It's a weird deal).

At 20c per install, every person in the world would have to install four Unity games just to make back what was spent on those two deals. At the lower 1c per install rate, everyone in the world needs to install 75 Unity games.

I've probably got the actual cost of the IronSource dal wrong, but there's also salary for what is apparently 9000 employees. Maybe $500,000,000USD/year for that?

It seems like the goal is to use promises of not having to pay the fee as leverage to get devs buying their brand of related services. For instance, they suggest you might earn "credits on the Unity Runtime Fee based on the adoption of Unity services beyond the Editor, such as Unity Gaming Services or Unity LevelPlay mediation for mobile ad-supported games."

Cash total for both of those deals was $1B, rest was just stock.

They're still trying to roll out the new pricing scheme, they only backpedaled on it being retroactive. They still haven't:

1. Actually scrapped the install fee

2. Scrapped their ads product that this bullshit was all supposed to push

3. Made a binding commitment to not try this shit again in the future

4. Fired the board that hired JR

> Actually scrapped the install fee

Didn't they cap it by revenue? That's the impression I got.

They did.

What ...encouraged the initial decision to increase the price? Because I can think of a few examples of discouragement, such as the backlash against Reddit, that should have given the executives an idea of what could happen as a result. Yet they went through with it which makes me think:

a) the company truly believed people would pay;

b) They believed that the fallout would not be that bad; or

c) Worst case, they did not consider fallout at all and just said raise it.

Or, the alternative was somehow worse? Run out of cash and fail to get more investment?

Companies can't just continue raising and burning money forever. At some point they have to charge an amount that's worth the value they provide. We're weirdly not used to that concept after a decade or more of low interest rates, but it's something we're going to need to get familiar with - paying for things we use that save us or make us money.

I agree. People seem to imagine there's some evil cartoon character twirling a moustache figuring out how to comically oppress them, when the reality is usually a lot more mundane.

Ehh threes a bit of mustache twirling. Unity isn't profitable becsuse it didn't charge enough. It's not profitable because it was focused on growth and promising big profits later. A strategy that worked for some of the largest sites out there.

This generates bad pr with customers becsuse customers just want their (very long standing) issues fixed and instead they announce a billion dollar acquisition-merge with ad tech and a bunch of other new products for different industries. So when the pricing changes hit these already frustrated customers, the backlash was severe. You don't fix the core issues and charge more for the engine you broke in some places?

If we had shareholders happy with steady profits we wouldn't be in this mess to begin with. They'd focus on the core product and have much leaner teams that do R&D for maybe 1-2 new products. But that's now how the stock market works. .

Or, we decide that at the price of free it was worth it, but we don't like it enough to pay anything. There are certainly things like that for me.

I do agree with the sentiment that we have become too accostumed to not paying for certain things. The question is whether I like it enough to pay to keep it around.

Honestly, Reddit just kind of sat out the backlash and at least in the short term got their way. So it's one loss for wizards, one win for Reddit, I could say them rolling the dice on 50/50.

But they overestimated how locked in their customer base were and how much more resourced game developers were to challenge them on their shenanigans than third party Reddit app developers.

For Reddit the alternative is non-existent so people had no choice but to stay and Reddit knew this very well. It's also something that's tied into the human reward system and fosters a sort of addiction which makes any attempt to leave even harder.

Unity has none of those things. It's a stone cold tool designed to make money for game developers and there are clear alternatives in Unreal and Godot. Now sure there are people who've based their entire career around knowing Unity, but those skills are reasonably transferrable.

Lemmy has a surprisingly active community that has stuck around after leaving reddit.

Eh, Lemmy is only Reddit in terms of its thread layout, but overall it's set up far more like Discord. Lots of loosely coupled small servers with no overall aggregation since federation is entirely optional. Reddit's main process of aggregation and subreddit discovery, i.e. the "front page", is afaik not a concept on Lemmy. HN is far more like Reddit than Lemmy, and probably has more users too.

They were unfortunately also caught completely unprepared at the time and fell flat on their face when it was time to scale up to accept Reddit's migratory mass. I'm still not sure if I actually have an account or not because the registration process was half broken. Time will tell how prepared Godot was, but at least they released the somewhat more stable 4.1 recently.

I've largely left Reddit since they backstabbed third-party apps and frontends, and seized subreddits and banned moderators protesting their decision. Checking https://subredditstats.com, many subreddits (ranging from smaller ones like CRTgaming, to larger ones like funny) have had comment volume drop off by 75-90% in July 2023 with no sign of recovering. So assuming Reddit isn't throttling/blocking subredditstats from viewing comments (and making itself look bad), I'd say people are leaving Reddit, but unfortunately I'm not sure if any of the community-run alternatives are as popular as Reddit is now (or was before the user exodus).

I'm one of those left that also deleted their years long accounts, and if I have to visit Reddit for something (as in, via search results), it's with an adblocker on.

I was planning to ditch it originally, but with a huge chunk of power mods gone I've actually found there to be a noticeable improvement in discussion quality within the subreddits I care about. It's nothing amazing, but it's the return of a casual feel I had been missing for some time. This has made me hesitant to check out lemmy, since I presume that's where they have retreated too. Think I will probably stay until they finally kill old.reddit.com.

It's a conflicting feeling since I'm still pretty bummed out by the api changes, but also recognize that much of the power mods capabilities were fueled by it.

> I'm not sure if any of the community-run alternatives are as popular as Reddit is now (or was before the user exodus).

This is the key for Reddit - there are no good alternatives.

Specifically for entertainment. That subreddit about the book series you're reading, the show you're watching, the video game you play, and the sports team you cheer for is hard to replace.

Reddit and twitter imploded at the same time interest rates skyrocketed and vc money dried up so there was nowhere to run

Keep in mind that some reddit mods have said thar site has incorrect numbers since June. I don't know how they get their stats but the api throttling may have affected the data. That assumption may be to the contrary.

>, I'd say people are leaving Reddit, but unfortunately I'm not sure if any of the community-run alternatives are as popular as Reddit is now (or was before the user exodus).

Well, I'm here on HN :). There is no perfect community driven alternative, but between HN, Tildes, and various Discords I get most of what I wanted. Also keeping an eye in the long term on certain forming sites.

But there are a few niche subjects I use reddit for so it hasn't been a complete migration. Once I find any community talking about mobile gaming scene I should be fully set.

There's Lemmy. Some of the Reddit third-party apps have converted to Lemmy apps - Sync for Lemmy and Boost for Lemmy notably. Sync was my to-go Reddit app, so I'm happy to see it resurrected.

lemmy.world is the instance I chose, and I'm having a fine time there. Things could be a bit more livelier, and I'm sure it'll happen with time.

I think reddit is also inflating user numbers a lot. People that have been there longer mostly notice the drop in engagement. Could be that there are new subs that have distinct user bases that are buzzing along. But the perception of less content is more or less universal for users I know with few to no exceptions.

This was a process that already started before the policy changes around API access though.

> So it's one loss for wizards

I'm not quite sure about that.

A lot of groups who defaulted to Reddit actually got off their ass and set up a Discourse or Discord. I consider Discord a huge step backward, but those who set up Discourse groups are now in a much better place.

So, a lot of the technical people who made Reddit the "go to" place for searching are now gone. As that half-life of the knowledge of those groups kicks in, the usefulness of Reddit is going to slide down.

I do wish more groups sought an actual alternative and not a closed down server. But I suppose for a mod (who would lead that charge) that closing down is a benefit. They don't necessarily want every random troll to pop in and ask the same rage bait question for the 1000th time. I guess that +popularity is why many moved there.

Still am hoping for a true replacement one day. Keeping eyes on what communities popped up when the next surge inevitably happens. The real issue is grabbing the right power user who will generate a bunch of content to engage with, and that's hard to do.

I imagine seeing money-printing machines like Genshin Impact ("HoYoverse [2022] revenue was around 3.844 billion USD and their overall net income was around 2.27 billion USD") run on Unity was a great source of encouragement.

Mihoyo specifically has a separate license for the Unity engine and the source code of Unity itself IIRC, meaning that Unity likely already struck a separate deal with them on that matter.

But yeah, the revenue on everyone else is likely what they were after.

It’s systemic.

If you look around lately, everybody is desperately scrounging around for more revenue and fewer free tiers/accounts/features/etc. Many of the strategies to do so will falter or fail, as here, but they’re being made all over the place.

Either a wave of greed culture happened to spontaneously wash in, or an investment economy built around perpetual exponential growth and potato-tossing is preparing for a bleak future.

It's due to the higher interest rates

A higher risk-free rate of return from e.g. Government bonds entails higher 'required rate of return' for all other investments in the economy

Suddenly, all companies need to increase their profits by 3-5 percentage points, while their costs are increasing across the board. So they need to increase sales (hard/expensive), reduce costs (might not be possible), or raise prices ('easy' to do, but customers might not accept it)

Gacha games and mobile games in general were the target. Remember that all the install fee waivers that they announced initially were dependent on developers using Unity's own ad broker for mobile games.

Fate/Grand Order is one of the most profitable games on the mobile phone market, it literally makes millions and it's written in Unity. As far as I'm aware, Lasengle (the developers) don't actually have a Unity source license so they'd fall under this deal.

The console/desktop market just... was not a consideration.

> Fate/Grand Order is one of the most profitable games on the mobile phone market, it literally makes millions

Small correction: FG/O makes billions. Over 7 billion, in fact. https://gameworldobserver.com/2023/09/11/fate-grand-order-hi...

How is it possible? The game looks horrendous. I can understand Genshin Impact, Supercell games or even Candy Crush but this? What am I missing?

To put it simply: really good writing, Fate in general being a super-franchise in the audience of anime viewers and a lot of whales willing to spend money for jpegs of their favorite anime girls.

Fate is part of the "Nasuverse" which has been around for a long time (Fate Stay/Night dates to 2004) and has the exact kind of superfan whales that leave mobile game developers salivating.

Japan is very very weird in mobile games.

Western games basically never pierce in Japan, not for lack of trying.

Japanese mobile games extend from their life and media consumption habits

FGO is a bit outlier. Every FGO imitated games fail because no one can copy the core value: the scenario writer. Every other parts of the game has been often blamed but the writer Nasu's work is cultic popular.

Pretty 2D graphics of anime girls, good story. They are pretty close to Visual Novels, just with more gameplay.

> What ...encouraged the initial decision to increase the price?

Probably money. You don't seem to have considered the alternatives, one of which may have been mass layoffs or even total failure. Asking for more money is never easy, but I don't think that means companies just shouldn't do it.

Reddit is a frivolous time waste, video game backlash is a frivolous time waste.

A game engine is fundamentally a year of learning investment on the side of the game dev before employment. For a business a game represents half a decade or more of an investment, and several man-centuries oinvested.

The Unity team severely misunderstood what the liability of being an unstable partner would look like. And did so by trying to extrapolate based on a gamer/redditer not being entertained as long/efficiently as expected.

I'll be curious if they can unring this bell.

If nothing else, this reminded small developers how vulnerable they are in terms of negotiating power.

If they bring back Unity's original co-founder and CEO (David Helgason) and restructure/debloat the company, they might have a chance of reacquiring some of the goodwill. People still want the "old", pre-IPO and pre-Riccitiello Unity back.

They can restructure the company, but they can't restructure their incentives.

It would really turn the energy around to cut the bloat, bring in Helgason as CEO w $1 salary but boatload of call options, have him explain a model that encourages indie devs while milking cash from gaming giants, and works towards a sustainable income statement for Unity.

Unironically the best thing that could have happened to Unity.

The dude is the definition of short-sighted management that caters to short-term shareholder gains at the expense of long-term value.

Now if only they could undo their acquisition of IronSource...

Is this one of those things where the previous leadership does something awful (retroactively change pricing schema), then they quickly enact new leadership to distance themselves from their actions?

Oh no I'm sure this is 100% unrelated!

Well, the transition in leadership is uncommon but they don’t officially give us a reason, so we’re left to speculate until someone inside gives us more info.

But from a purely speculative standpoint, it seems very possible that they were ousted because of the pricing debacle. I could see a world where the stakeholders aren’t thrilled with the damage the pricing changes did to their brand and took action.

I find myself wondering if Apple applied some kind of back-channel pressure to oust Riccitiello.

With Unity at such a privileged position in the developer ecosystem of the upcoming Apple Vision Pro, I can imagine that Apple execs were pissed off that Unity would do something so stupid and shortsighted to jeopardize their developer ecosystem.

I haven't heard anyone float that idea yet, and the term "Apple" doesn't appear anywhere (yet!) in the comments of this post, so it doesn't seem to be on most people's minds. But still, I wonder...

I mean FWIW, they also probably really aren't thrilled with any game engines likely handing market share back to Epic, who is trying to put them in front of the Supreme Court for antitrust.

an important theory is that Unity's initial actions were prompted by Apple's App Tracking Transparency changing the gamedev market and jeopardizing Unity's recent ad-driven monetization strategy, and that's how Apple's on everyone's mind around those news

That's unexpected. The new CEO is a guy who led Red Hat (successfully) for many years.

Not sure how he'll turn the Unity ship around, but his outlook is likely to be 100% in the opposite direction to the previous (dodgy) CEO.

He's going immediately so its possible he was pushed by the board to resign or be sacked.

The only way Unity was going to be able to begin to recover from their recent PR snafu was for him to go. They needed a fresh start.

Given the transparency of the gesture of removing a person in power after a controversial change being an obvious and common scape goat mechanism, I'm not convinced this is Unity recovering right here. Pretty sure this is just Unity acknowledging they fumbled the ball and they're desperately trying to spin this as, "no, no, we're the good guys, that _one_ person in power was the one you had beef with." I say, why let them create that spin?

Both situations seem possible. I guess time will tell how Unity wants to move forward.

Others mentioned it earlier but it looks like Godot had a big boost in users from this fiasco. Perhaps Unity is concerned about real financial damages done to their bottom line because of all this? I’d expect them to try a lot of stuff and see what sticks to make sure they don’t miss their targets this year.

I contend that even if he is a scapegoat, this should be considered a good thing. It's not enough to let them off the hook, but I don't think anything would be. However, needing to scapegoat someone is a materialized cost to a verifiable person in power. It is a precedent the next CEO and chair will have to pay attention to. They will need to be more careful in the future when they try to rip off their business partners.

This situation is being watched by all the other executives out there at other companies, who are just waiting for a moment where they think they could get away with the same thing. This resignation is a loud and clear "don't you dare!"

I'm not so certain that the resignation is a loud and clear "don't you dare," though. Career CEOs will land on their feet by finding a new business to champion. In the meantime, I'm fairly certain they would have been granted a monetary incentive to resign that's probably paying for a sabbatical in a nice resort somewhere before returning to work with a "new vision as a changed person." Perhaps that's just my skepticism leaking out though. Obviously none of us know the exact details of their departure. Perhaps you're even right.

We'll just have to wait and see, remain vigilant, and become organized.

Right? We don't need to send a signal to unity a signal has to be sent to the industry at large. Unitys collapse is the signal we need to send. If history tells us anything it's that a company doesn't learn from its mistakes but the industry might learn from a companies demise.

It's not about recovery. The company wants to do the pricing. If they have to sacrifice a few CEO's to warm people up to idea then so be it. Companies don't walk away from this stuff.

Developers need to have a big think and should be managing their risk and exposure to potential price shocks like this to ensure their own viability.

He was probably set up to be the scapegoat from the board to begin with...

It strikes me that this Penny Arcade cartoon is more prescient that I originally gave it credit for: https://www.penny-arcade.com/comic/2023/09/18/undercraw

On the surface the cartoon is silly and extreme but speaks a deeper truth. Consider that SilverLake is the entity that has proven itself to care only about extracting profit and nothing about games as cultural expression of the community and welfare of those who make them. Riccitiello was incompetent in how he made the exploitation of game developers obvious but given Unity's funding structure they will keep doing the same. Maybe now they're scared that they are losing a valuable resource of developer trust, but they consider it only as far as it is a resource for profit extraction.

This is another example enshittification that Doctorow is popularizing (https://www.youtube.com/watch?v=rimtaSgGz_4) and is so well illustrated in the cartoon above.

that reminds me of the famous “don’t anthropomorphize Larry Ellison” talk

https://news.ycombinator.com/item?id=5170246

This is not bad news for once. A new CEO could really bring back some goodwill. He was going about it the wrong way and with a poor attitude (referring to the idiots incident), the malware company acquisition etc.

I'm not familiar to the idiots incident could you summarize?

https://www.theverge.com/2022/7/18/23269218/unity-ceo-john-r...

Yeah I know the overall context was not as negative as indicated.

But someone who thoughtlessly refers to their customers as "the biggest fucking idiots" really has an attitude problem that goes deeper than he claims.

Amazing to see a CEO paying the price. I wonder if he got some kind of golden parachute.

May be he doesn't know how to increase revenue without changing the terms and conditions and leave the position to someone else?

If I were on the board I’d vote he gets a golden cannonball to the nuts.

The board are just covering their own asses. I'm sure they were aligned on all the plans because the board represent the shareholders and those have super short term vision these days. It's a problem that plagues the whole industry.

Or a golden parachute that’s been slashed with a knife

Probably an unpleasant conversation with the board. Resign, or be fired.

This is very likely covered in the contract to begin with so there isn't much room for negotiation unless the board feels he's breached some significant contract term.

Nice to see a company really try to make it right.

All conversations with a board are possibly unpleasant, even successful moments, "why aren't you more successful."

Market economy. Bleh.

He’s sold over $400mn in Unity shares [1]. He’ll be fine.

1- https://www.secform4.com/insider-trading/1193857.htm

It's so messed up when you think about it. He made a decision (or at minimum allowed it to happen) that will most likely kill the company in the end. And he gets to profit handsomely from being fired for that bad decision.

The notion of consequences & responsibility at this level, which is often used to justify high pay (see also: the idle investor class—“oh, they deserve huge returns because of all the risk they’re taking!”) is so fake that the whole thing would be funny if people didn’t seem to think it’s actually real and meaningful.

“Oh no, I had a terrible outcome and so… me, my children, and my children’s children, at least, will continue to live among the oligarchs and attend oligarch schools and live in oligarch places and go to oligarch parties, being incredibly comfortable and wanting for nothing our whole lives.”

Please, give me those consequences. I promise it’ll make me take everything super-seriously and do a very good job. Lord knows I don’t want that to happen to me. How terrible.

I had people arguing that I wouldn't be able to do this job because of all the "stress" that executives suffer. Pay me $400M to fail and let's find out.

Stock price is down 22% in the past month:

https://www.google.com/finance/quote/U:NYSE?sa=X&sqi=2&ved=2...

This is it. Bad press? Developer feedback? These, by themselves, are no concern to the board.

But my man here lost three billion dollars of investor money and for that he needs to go.

what else would someone expect board members to care about? It's naïve to expect otherwise, really.

It's not that we're surprised, but rather that we're angry about how unsurprised we are.

Direct link to the Unity press release: https://investors.unity.com/news/news-details/2023/Unity-Ann...

Anyone else wondering if this was all planned? Maybe Riccitiello was planning to retire and the board asked him to play bad cop and announce the new fee structure. After he is gone they will announce something slightly more agreeable that will look good in comparison. Maybe I'm just too cynical...

I think you are, in fact, too cynical. They've already announced the new fee structure which is a lot more sensible. And before you go "that's how they wanted people to react to the final structure", there's no way how this thing unfolded came to the benefit of the company and they'd have been idiots if this was in any way the plan.

This is not cynical - it's a common/smart play with little downside taking advantage of a bad situation (e.g., like the CEO being hated in general by the community).

I'm hoping that in 20 or 30 years, maybe he'll be on stage at some business symposium or something and will share the background for the decision and how it went down. A while back John Scully was answering questions and he talked (with surprising candidness) about the Apple board firing Steve Jobs, and how he (in retrospect) thought he could've handled it better. These sorts of stories are always secreted away because (probably more than anything) the liability risk associated with sharing the information.

No mention of his “exit package” or “golden parachute”. Dude is going to be sitting pretty and then fuck over the next company.

I’m surprised the board actually did something and held him accountable. It’s a small step but this is a stain that won’t be washed off.

Like a caterpillar becoming a butterfly, an executive cannot graduate to an oligarch without failing upward into fabulous wealth. This is but another step on his beautiful journey.

> The news isn’t a surprise as Unity angered a lot of its loyal game developers a few weeks ago after pushing through a price increase based on numbers of downloads — and then retracted it after an uproar.

I thought they only slightly adjusted the new pricing scheme due to uproar, rather than retract it.

What feature can we develop, that developers can not do without? Thats the money question.

"A basic engine needing replacement for almost all components." is not a good answer.

Especially if you want to extract a fee for any movement within the eco-system. Its signialling a certain cluelessness about ones own buisness model.Extracting it, by inserting oneself in front of the producer to the player, is nothing that can work.

Lo and behold: he's out, Unity is saved! Where's my credit card? Restart your subscriptions, everyone!

When the news first hit (re. "pricing structure"), the unpaid Unity evangelists (and I use the term literally: Unity evangelists that are not being paid for their efforts) immediately leapt to the defense of the company, declaring its innocence and fingering the evil mastermind at the top. He did this! Yes, the problem was that Unity had a badman at the helm...

When Unity started moving decisively toward their IPO, the decision was already finalised: Unity exists not to make some money by building and selling a game engine, but to make all of the money, by whatever means necessary. It's not because of who the CEO is, it's their raison d'être.

Seriously, it's good to see that the immense backlash made at least some ripples. But wow are the standards low.

A startup IPO is just an exit event for the investors and founders. I wouldn’t expect anything positive for anyone else to happen in the median case

They need to rebuild trust with the developer community after the recent debacle, and the CEO seems to be most closely identified with unpopular changes. Whether this will work is debatable, too much trust has been lost. I cant really think of anything that could restore the trust.

It's weird, these days it seems no corporate position can endure more than one misstep or scandal. Everyone is one wrong foot away from stepping through the gallows trap door. Companies it seems are terrified of the internet lynch mob? Must be a tough gig. Can't afford to be wrong and grow in the role. Have to be pure or teflon.

This might have a chilling effect on risk taking and innovation for some, leading to the sclerosis Teflon Musk talks about afflicting companies that become afraid of taking risks--ultimately risking making companies less effective, and more prone to unimpressive results.

It's like these companies may meet their fate on the road they run to avoid it.

This seems like a pretty big misstep for which any sensible person could've predicted the outcome. Companies should think twice before deciding to retroactively change their terms.

Applying public pressure towards companies is good.

Applying pressures to companies can cause them to confront uncomfortable realities and consider the impacts of their choices. Undoubtedly this is good.

I'm not clear on the specifics of this case, but the idea that a mistake, however obvious it is to others, is intolerable and fatal, could be considered something toxic, because it seems to try to enforce an unrealistic standard of "no mistakes".

The perspective that the CEO is not sensible, or didn't think twice, because they failed to predict a pretty big outcome, is challenging to uphold in face of the reality that they became CEO in the first place, likely making a series of thousands of carefully considered choices that helped them accomplish that success.

It may be helpful to consider the internal calculus, both around the departure of the CEO, and also underpinning the justifications for the choice that upset the community, to gain a wider understanding of the situation.

There seems to be an expectation that corporate roles these days can make no mistakes. This goes against the reality of human imperfection, and seems overly onerous for people to live up to. Although it seems an extreme comparison, one possible outcome is a revolving door of leaders filling high profile roles, akin to the revolving cabinet of ministers in an authoritarian dictatorship, where mistakes are fatal, and often blamed on a scapegoat who must be purged to restore purity, and the illusion of perfection.

I'm not sure if that's quite what's going on here, but certainly seems like we're less tolerant of recoverable mistakes these days than in the past, where it seems as if leaders could survive multiple mistakes and scandals and still manage to find a way to right the ship. Throughout history it seems there have been periods where mistakes are more tolerated than others, and that less tolerance is associated with other undesirable outcomes, such as war and state failure. In a personal, and professional sense, an environment where mistakes are not tolerated is not one which is psychologically safe, and can not be said to encourage the best work of people involved.

It is absolutely false that this is the single only misstep of this particular person. He is exceptionally well known in the industry, both for his history before Unity, and also during his already 10 years old history in Unity.

This is not an isolated instance, this is not a weird decision that exists in a vacuum.

Your point may be interesting in other cases, but it totally misguided and out of place in this specific case.

Another way to see this case: This is not the first time he does take heavy advantage of his clients, but this is the first time he faces the consequences you can expect of heavily taking advantage of his clients. In other more crass words, this is the first time his clients don't eat his shit big time.

Good to know an overview of the specifics a bit more, thank you!

Just to ensure that I'm hearing you, this guy, the CEO of Unity, managed to rise to that position, while at the same time, consistently making bad choices and treating his clientele badly, for more than a decade? How does that work? As in, how did he manage to be successful if he was so badly behaved?

Would it be impossible to provide a reference article to get a good overview in detail of the events from his history that you mention? I'm fascinated!

BTW -- I love your username! Hahah so positive and lovely! :)

Riccitello is one of the most incompetent and anti-gaming game industry executives in history. Gaming is worse because of his exploitative tactics. Good riddance, let's just hope he goes play golf and stays clear of videogames.

Unity lacks good technical direction.

They are wasting so much money building and rebuilding the same features over and over again, or on half baked features that aren’t useful to 99% of their user base like DOTS.

Yes, their core offering is suffering from deep technical debt and glomming on weird services won't fix it. They need a hardcore engine team that's empowered to do real stuff for real games.

Probably because they are so large, there is a lot of variation in the quality of various features.

I think they did a great job with the new UI (quite old now)

The transition to prefabs inside prefabs seems to have gone smoothly for us, and updates to the editor itself seem well engineered.

It was probably a mistake to split the renderer. And its not great that it took _years_ to bring the URP back up to the level of the old renderer. We only just upgraded to the 2022 LTS and only just got shadows on point lights back. They have been missing for years!

The new input system works well, seems like good technology, but a little over complicated and documentation struggles because such a big system. I wish they were simply more prescriptive of how it should be used.

The addressables are a total fuck up. They push it very hard in the documentation but every time I have to interact with it I wish we had just dumped everything in a resource folder.

I can't comment on the DOTS because I never played with it.

My favorite parts of Unity are the oldest parts.

> The addressables are a total fuck up. They push it very hard in the documentation but every time I have to interact with it I wish we had just dumped everything in a resource folder.

At one point we finally gave up and just dumped everything in Resources and StreamingAssets.

And that's... it? We even removed the Addressable package completely from dependencies.

Nah, dots is crazy useful. Even if you're not making a large 3d game DOTS does wonders for simulation style of games. But yes, DOTS needs a lot of time to simply polish what is there instead of expanding on whatever they are doing.

Wow...I wrote up a whimsical account of what could happen after the price increases. I got the timing wrong (I thought it would take several months for the CEO to step down), but some of it is starting to come true: https://quiver.dev/blog/stepping-into-the-unity-ceos-calfski....

Too late. Unity is dead for the game developers forever.

"Unity would not be where it is today without the impact of his contributions."

something something damning with faint praise...

spending $4B for ironsource ads and $1B for weta authoring stuff was expensive and took lots of their more indie-friendly choices off the table. maybe the ipo path they took made these things inevitable. anyways, their choices are behind them now. godot and elsewhere are where the parade will move on to

How can we know if John Riccitiello was not basically told what did by major share holders?

"Ok, we are going try to push the envelope, if it does not work don't worry, you'll get a nice bonus while endorsing our despicable behaviour on you departure."

I don’t know if their brand can be salvaged, but if it’s possible this is a necessary first step.

Suda51's No More Heroes series has an antagonist based after him. It's Damon Riccitiello, CEO of Utopinia urban development corporation. By the time Riccitiello was CEO of EA.

The enshitification business model is like a gold digging spouse. Someone gets into a relationship with and makes a baby then once the person is tied down everything changes.

Finally...

He does not know what it takes to make a superior product. He attitude is towards monetizing a superior product without understanding why it was superior on the first place.

Unity didn't just screw the proverbial pooch, but dry humped the whole kennel.

Something (someone) had to pay for it.

Will he go back to EA, just like Satya Nadella did to Microsoft after he burnt Nokia's platform?

That was Stephen Elop. Nadella was against[1] acquiring Nokia. Elop was let go about a year after going back to Microsoft.

[1]: https://www.windowscentral.com/satya-nadella-confirms-he-was...

That was Elop. I used to for Nokia and (fun fact) have been in meetings with Stephen in person. He made no impression on me other than his amazing memory.

a LOT of the comments I saw rejecting the new Unity pricing format (which was walked back and is now not so bad) blamed John Riccitiello … I have to wonder, was he forced out by other Unity peeps who were unhappy with the surprise pricing update (and how bad it was)?

Didn't they only give some minor concessions, not actually roll back the pricing changes?

Well, what did you think was gonna happen...the stock tanked hard!!!

I was hoping to see Mike Acton become Dictator of Unity. Shame.

You can't have someone with passion in charge, they'd create great products that change the industry.

You need MBAs who eek out profit margins at the expense of the overall product and business.

You might already know, but he no longer works there: https://twitter.com/mike_acton/status/1654169432598478848

Johacim coming back would also offer a vote of confidence.

John Riccitiello was the CEO Silver Lake deserved.

Sadness for the rest of us.

I'm just amazed it took this long.

Can anybody give me a TLDR; on the "Unity crisis"? It is mentioned in several comments but as I don't work in games I'm out of the loop.

Even if nothing actually changes, this is what happens if you try to turn your customers into the product by unfair gotcha capitalism. The problem is that most customers, especially Americans, rarely push back, so product managers incorrectly assumed their customers wouldn't complain.

Finally!

and find out

I'm so grateful to John Riccitiello, without his pricing changes, not as many indie devs would have jumped on Godot.

The extra funding alone is fantastic for Godot. The next year is going to be really exciting, with console support via W4 Games, ironing out some rough edges and missing pieces in C# support, renderer improvements, etc.

It's already a great engine for a lot of games, but very soon it's going to be a really serious alternative for most small teams. It was already on a strong trajectory since Godot 4, but yeah John helped.

I doubt this will end the scummy money grabbing thinking.

https://old.reddit.com/r/unity/comments/16j23ci/i_know_peopl...

The actual people who should be removed is probably the incompetent board of directors who signed on in 2020.

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