Unity announces layoffs despite increased revenue and reduced losses | Hacker News Reader

Unity announces layoffs despite increased revenue and reduced losses

gamesindustry.biz

129 pointsmyth_drannon140 comments

Such a misleading headline, "despite... ...reduced losses".

The Unity Corporation is a machine that literally vaporizes money.

They need to find a way to profitability. Reduced losses aren't good enough. Layoffs should not be shocking. This is not an example of a company making tons of $'s and then laying off people.

Anyone who wants to use Unity long term should be supportive of them achieving profitability, because the current position is not sustainable.

Unity is a good "poster boy" for the unprofitable, bloated, economic value destroying tech company that was created in a ZIRP environment.

Many of these companies should start going bankrupt before too long as their debt hits their maturity dates and their interest expenses balloon.

And to try to survive they will have to aggressively cut R&D and SG&A. And as everyone cuts those budgets it will impact the revenues of who they do business with (and Unity's customers will similarly be doing the same thing, with fewer developers needing licenses and fewer games being sold due to less disposable income in the consumers).

The FAANG layoffs that we had over the past year or so weren't the real tech recession, that's still to come.

Between this and their license change fiasco it seems like they're trying to speedrun their way to "company most hated by developers". That said they're apparently making a lot of money doing it, so what do I know.

>They're apparently making a lot of money doing it.

No. Unity is not making money, they are losing money. That's the problem.

"Reduced losses" means they are losing less money than they were. That's still losing money.

Unity was losing money before the licensing fiasco. It's still losing money.

That's a better frame. The lay offs were necessary.

The title frames it as if the layoffs were unnecessary. The title is technically true but the way it's worded is manipulative.

There's a lot of companies laying off people even though they're making increasing profits.

Unity isn't one of those (even if the C suite was being paid $0 since some are arguing that the top brass salaries are too high).

It doesn't make sense to hold them up as an example of a company doing bad layoffs, especially since there's many other very obvious things to criticize them for.

According to the article, they have half a billion dollars in revenue (with currently $154 millon in losses), and that seems plenty to run a company like Unity. Lay-offs are rough, but looking at the numbers, they make sense in a cold-hearted capitalist sort-of way if the goal is to reach profitability. Certainly much more so than the runtime fee thing.

It really depends. A company has to at least break even for longterm success. Otherwise, there won't be enough money to pay workers.

Tell that to the entire tech sector pre-2020.

It's still the truth, even if the tech sector forgot the truth.

$921M loss in 2022.

https://www.macrotrends.net/stocks/charts/U/unity-software/n...

$570M loss just through Sep 30.

https://d18rn0p25nwr6d.cloudfront.net/CIK-0001810806/19c9981...

That form says that out of 570M loss, 250M was from repurchase of stocks, but maybe they then spend it on RSUs for employees.

Yes, share buybacks for the purposes of returning cash to shareholders (and dividends) are not expenses on an income statement, hence they are not included in the calculation for net income.

In this case it is on income statement

No, it is not. Page 6 has the breakdown for operating expenses, which probably means it was for compensation to employees.

There is no reason to incorporate distributions to shareholders on an income statement. The whole point is to figure out how profitable the business is, and how much is left for the shareholders.

Do you know the difference between revenue and profit?

OK imagine you have $500 million in revenue and $154 million in losses.

That means you've been selling $1.00 for 70 cents.

Not sustainable. If their customers don't like what they're doing, it's not surprising. Because anyone buying $1.00 for 70 cents is going to be angry when it ends.

If their developers don't like what they're doing, it's not surprising. Anyone benefiting from a company paying them more than they can afford is going to be angry when it ends.

> According to the article, they have half a billion dollars in revenue (with currently $154 millon in losses), and that seems plenty to run a company like Unity.

This can be true when investment/debt money comes cheap and you're company still looks like a rocket in its launch stages. Investors and lenders are happy to pile money in and expect to cash out while you're in steady orbit, or at least not be the last holder of the hot potato if you don't.

But money is no longer cheap and Unity no longer seems to have startup-like growth ahead of it. New fuel isn't coming and the rocket either needs to level off and coast into a steady orbit or come crashing back to earth. Raising revenue and cutting costs is how executives try to stabilize the darn thing.

From the outside, it's looking doubtful that they'll be able to do that, but they don't have many alternatives.

They're still at a net loss.

TFA says they are losing 125 million.

Yes, but the top brass are racking in tens of millions.

> Yes, but the top brass are racking in tens of millions.

I agree that leadership should lead by example. However, tens of millions represent a small fraction of the > 100 million hemorrhaging that the company is reporting.

10% is not a small fraction

Most of it is shares, not cash. Shares aren't comparable to cash here at all.

That tens of millions is supposed to be each, isn't it?

It describes the one individual getting the most, but I don't know how it falls down through the hierarchy.

If you look at the total compensation of top 5 earners at Unity, it's damn close to 100 million.

https://www1.salary.com/Unity-Software-Inc-Executive-Salarie...

The CMO alone makes 32 million? Absolutely wild.

CMO is the best paid by far, and while it's still a big number, it's only $500k in salary - about the same as a senior Netflix engineer. All the rest is equity, which is only valuable if anyone wants to buy it.

> CMO is the best paid by far, and while it's still a big number, it's only $500k in salary - about the same as a senior Netflix engineer.

But is the CMO adding that value to the company? Based on their most recent big project being the licensing guffaw that has them hemorrhaging users, I would kind of say... no?

How much value do you think you add to your employer? Your value is based on how the market values you, not a specific dollar amount that your lines of code generate (if you are a developer). Similarly the CMO’s compensation is based on how the market values that job. Does the person make more than CMOs of similar companies?

If you suck at coding, you’d likely have a hard time landing a new job. If the Unity’s CMO sucks at doing their job, it’d be a stain in their resume, although it’s likely that they can still have a lucrative job in the future (Unfortunately that’s the reality)

> But is the CMO adding that value to the company? Based on their most recent big project being the licensing guffaw that has them hemorrhaging users, I would kind of say... no?

Maybe, but that's a totally different topic.

I dunno kinda seems like even if they sold the equity at a fraction of the value they could still easily double that salary or more.

Yes, but that isn't money that can be used to rescue the company. It only materialises if people think the shares are worth buying. If a company is selling its own shares to prop up operational costs, those shares will be worth very little very quickly.

If my understanding of finances is correct, the total compensation numbers you're citing are almost meaningless from a cash flow perspective. Most of the compensation is in stock, and issuing new stock as compensation doesn't really cost the company anything. Buying back the issued stock is where the stock compensation would have a negative impact on cash flow.

I guess it DOES cost company something.. goes directly to their profit/lost statement (of course if they are sincere to follow GAAP standards).

And I do not understand the rationale when people say salary alone matters and stock compensation does not matter until the gains are realized. It still is an asset even if the values fluctuate. I will be very happy to take the risk of having no salary and millions of stocks as compensation, especially for a well established market leader like Unity.

And then you look at your balance when you go to sell and realize it is not worth much.

https://www.macrotrends.net/stocks/charts/U/unity-software/m...

-28% annual return since going public.

https://dqydj.com/stock-return-calculator/

A relatively riskless investment in sp500 would have earned 11%+ per year since 2019.

https://dqydj.com/sp-500-return-calculator/

"However, tens of millions represent a small fraction of the > 100 million hemorrhaging that the company is reporting"

So it's not a big deal if I embezzle a few million dollars. It's just a very small fraction of the overall loss of the company so there is no need to look at that.

Their salaries are in the $250k to $500k range.

The rest is stock. Unrealized gains that may or may not be realized in the market.

Stock-based compensation is counted as an expense in the accounting rules used by public companies (GAAP).

So if they give $100M in stock awards, that’s a negative $100M on the company’s profit & loss statement, even though it’s not actually paid in cash by the company.

For that reason many tech companies also report non-GAAP numbers where the profit looks nicer because they can leave out stock-based compensation (and anything else they feel like they can get away with).

Compensation is compensation. Stock has value even if that value is constantly changing. If they disagree, I'd happily take their worthless millions of Unity stock off their hands for them.

The point is how does an executive team who together makes on the order of $100M/yr justify its own compensation if the company is losing on the order of $100M/yr?

If they keep screwing up the company, that stock may not be worth much.

Business 101 is that all funded companies aim to lose money in order to grow. As long as the growth rate is sufficiently high to justify the losses, this is considered good performance.

However, if that ratio goes the wrong way, then companies need to make internal adjustments to bring it back in line. That could be new or different pricing strategies, but it also usually involves some efficiency improvements and cost cutting.

This is why you have scenarios like this where the company is yes overall losing money each year (as intended), making more revenue than last year (good), and still cutting jobs (because they are still not at the right ratio of revenue growth to losses).

So the executives could be doing a completely fine job bringing the company back to the right path. With only trivial high level information like we have we can't tell. To really know if they are doing well or not you'd need to dive into the finances.

Going to the public markets and saying "we're selling $100M worth of stock to fill a gap in our revenue" is basically suicide. This is essentially what happened to SVB earlier this year; its different because they're a bank and there's bank runs to consider and the FDIC and etc, but they said "we need liquidity so we're selling a bunch of investments" and everyone went like "huh? are y'all ok? screw that we're out" and they died a week later.

SVB literally would have been fine, if you remove market psychology from the picture. But, that's a fallacy that everyone from You to highly experienced banking professionals make; ignoring market psychology.

People have this idea of stock having value; but it only has market value. Its a similar fallacy as believing that your investments are protected because you have stop-losses set; stock only has value because people believe it has value, and if corporate leadership takes action that would cause a lot of people to stop believing your stock has value, that stock doesn't have value anymore. Its not a house; its fairy dust.

"stock only has value because people believe it has value"

Unless this is an indictment of all pricing, it seems short sighted as companies have assets and cashflow that exist beyond belief. When you buy stock you are buying a (small) percentage of everything that company owns.

I mean, look at SVB, only as the most recent example. They went from an extremely valuable company to being worth zero over a weekend, despite having billions of dollars in assets (even minus liabilities). Their shareholders also went to zero with them.

You can argue that SVB is weird because they're a bank and their assets had to be liquidated to service banking customers; but that's basically how all companies work. Assets get liquidated to service debtors, generally at a significant discount on the value they reported the asset to be worth to the government. Usually; "believe has evaporated" happens to companies that, right before the belief evaporated, had to take on significant debt to survive another quarter, so that liabilities number is high. Lawyers and gutters get paid. Maybe insiders get priority liquidation.

You can reasonably philosophically view corporate shares are partial ownership in the assets of a company. Realistically; if there's been one instance in history of a share converting into liquid capital after a "belief has evaporated" event, that resulted in more than, like, I can buy a coffee with this money, I'd love to hear about it.

tf? Unrealized gains don't count? Then why don't you give me your unrealized gains?

niceice did not write that they did not count.

> Yes, but the top brass are racking in tens of millions

This characterization is obviously not accurate.

How much unrealized gains do you think Unity executives have from their stock compensation if their market cap graph looks like this:

https://www.macrotrends.net/stocks/charts/U/unity-software/m...

Why are you trying to handwave away the biggest part of compensation? Yes, losses happened, no this does not make the amount small. Not on an absolute scale and not compared to salary. Lol.

What makes them unrealized? They are selling and realizing all the time, and get the massive unfair tax advantage of capital gains instead of income like for people that work for a living.

Err equity compensation is not taxed as capital gains unless there's growth.

Depending on how things are structured you pay taxes at different times but the value at grant is taxable as ordinary income. The only taxability difference is what to do with growth between grant and vest (and depends on when you pay the grant value's taxes).

This is a common misunderstanding and sometimes causes people working at big companies to hold onto their RSUs needlessly even though they've already been taxed as ordinary income. In the RSU case you can't elect for different treatment on grant-vest gains, and it's very unclear if you would even want to.

Equity compensation for earned income is subject to ordinary income tax, not capital gains tax.

The charge per install fiasco seemed like a last ditch effort. I have no doubt that Unity has been having financial issues for a while, and they were looking for a way to bump the needle.

Yeah, the issue is one of:

1 - Unity has an unprofitable Business model

2 - Unity chose their business model

3 - Changing the business model will, as we have now seen, require time.

This is the startup trouble I see in that all the promises of the previous decade are void in the fave of financial hardship.

I feel like at least they tried a pricing change before going to layoffs. A lot of places would have gone straight to cutting people.

They could have also tried cutting top management salaries before laying off developers.

Maybe, that seems extremely rare though. Didn't they already roll some upper management heads?

They fired one person (CEO) and probably proceeded to hire someone else at a higher salary.

Of course it's rare, upper management will never decide to make less money personally in the short term. The only time I've heard of this happening is in some Japanese companies.

Would have been much healthier for their business to cut people before they burn their customers.

Based on the leaks in the Ars article, it seems like their real focus is to use Unity and Unity changes to bolster the ironSource ads side of things, and they were/are? willing to slash and burn a lot of the core Unity engine business to do so.

I thought the backlash was a bit greedy by the devs? Unity is a great tool that you don't really pay for compared to foundational software in other verticals? It was like installs over 1 million (so over 1 million in revenue), which functionally netted out to about 10k - 20k per company. That seems... OK?

Was it? Where was this idea that you owe library developers a % of your full revenue (vs. licensing costs) automatically come from? That sounds exceptionally greedy, especially since it wasn't negotiated with individual developers like most of similar contracts.

Agreed. The retroactive revenue cost was illegal, so it wouldn't have gotten past the courts. Unity execs probably thought devs were more locked into their platform than they actually are, so it wouldn't be challenged.

There’s multiple aspects.

1. It retroactively applied to existing licenses. So was a bait and switch to many

2. Installs are a terrible metric for revenue. A lot of Unity based games are F2P, where installs would then turn into negative revenue.

3. They didn’t outline any of the edge cases of users getting refunds. That would allow a user to be a negative revenue suddenly.

Their change as it was first announced was really out of touch with their own community of developers, and failed to even encompass the most basic of real world details that a developer may face.

At the end of the day, the model itself isn’t really bad, but all the implementation details, or lack of, were.

Internal Unity staff had raised all these issues with leadership and been ignored.

Counterpoint: if you don't have a longterm contract w/ a foundational piece of software for your business, that's kind of on you too.

That’s a ludicrous take.

Significant parts of many businesses have no way to make a contract agreement beyond the terms and services agreement they agree to

And even with a contract, you may not think of every loophole. That doesn’t mean that you can’t then argue that the loophole is a violation of the previous agreements spirit.

The idea that “well you didn’t think of all of these things ahead of time so it’s okay that you get tossed around” is just so incredibly broken and flawed. No legal system is that binary, and very few businesses are either.

In Epic's license:

> 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.

ie unlike Unity, once you agree to this, you may continue using the engine you licensed permanently under the current fee structure. Companies should prioritize stability like this.

The major problem was the retroactive aspect and the very short amount of notice.

Part of choosing your engine is selecting the appropriate licensing costs for your games business model. After spending 2+ years working on your product, the business model completely changes, without the ability to opt out. It also affected already released games, and wasn't even a rev share, it would cost money just for downloads.

This also occured 4 years after Unity publically stated that developers should be able to stay on the version of terms of service they already agreed to.

If a company wants to have that business model, go for it - but don't bait and switch, don't go against your word, or else you've torched all trust between you and your customers

Most devs I am aware of were horrified by the "Fuck you, pay me" nature of the new terms. Unity would tell you how many "installs" they claimed to have seen, and you had zero way to interrogate their data. It also made it clear that the Unity runtime was probably phoning home more than most devs realized.

So you're a small time indie who agreed to the terms to "pay your fair share", Unity says you owe them $100k, and you know that doesn't make sense, but can you prove that in court? Can you pay for that court case in the first place?

> Unity says you owe them $100k, and you know that doesn't make sense, but can you prove that in court? Can you pay for that court case in the first place?

Virtualbox all over again?

The licensing model as originally announced had three problems:

1. The fees were to be retroactively applied even to games that were already released and may have ended development. That alone would have been a dealbreaker for trust, but...

2. Unity was incorporating a price-per-sale fee model when its original sales pitch was all about how it was never going to go to such a model.

3. The changes were interpreted in the greediest way possible. It's not price-per-sale, it's price-per-install (so if I buy it once and install it on all three of my computers, it's 3 times the price to the developer), etc. And when the inevitable backlash of "are you really this colossally stupid?" came back, the company doubled and tripled down on it.

After the immense backlash, Unity did eventually backtrack to a more reasonable and typical price-per-sale model, but not without colossal and perhaps fatal damage to their reputation.

I will be incredibly shocked if they come out of this alive. How's that old saying go? "Trust takes years to build and seconds to break." I wouldn't touch Unity for a new project now, especially since corporate America has demonstrated so many times as a culture that when they do something, get backlash, and back off, it's extremely rarely a permanent back-off; they just do it again, get smaller backlash, back off, do it again, smaller, back off until they've gone through enough news cycles that nobody gives a shit, and then do what they wanted to do anyway.

And even more than that: that their management structure saw this as anything besides shooting developer trust in it's head and watching it hit the ground paints a picture of leadership that is astonishingly out of touch with their customers, to a degree rarely seen even lately. How do you know so little about the people you're selling to where this looks like anything but the worst idea in their company's history?

Been a Unity developer for years. Was shocked and dismayed by the runtime fee announcement debacle. Was pleased at the result with JR leaving. The new CEO seems okay so far. I'd initially though of him as a hatchet man who will let the next CEO come in with clean hands, but maybe not. He seems to be talking to developers and listening.

The company NEEDS to reduce its headcount and its monte carlo solver approach to growth and profitability. They have not made meaningful progress on the Unity Editor in several years. Most pros use the old systems and those that bet their company on the new engine systems pay a heavy price. The amount and variety of debt that has piled up is staggering. They have to start servicing it.

So, the company will look like it is bleeding but I honestly think it's about time. It needs an intervention to find a way forward.

On this news I bought Unity (U) stock for the first time today. It was a token amount because I want to get insider comms, but I have never considered buying it at all before.

I've been finding it challenging to get a new job this year.. it's been painful with all the layoffs and increased competition. Jobs coming through now are reduced on salary too :(

What type of job are you looking for?

Full stack developer here. I concur with parent.

I would even add that companies willing to take distant remote has drastically reduced.

Tech has become the type of job where people are ordered to abandon family and friends to keep insecure management happy by relocating closer to offices. Not a viable career if you want a life.

Have you ever looked at a career in medicine or national defense? If your job is actually important to the functioning of modern civilization then you should expect sacrifices. If your job is just a cash grab and nothing is impacted whether you do your job or not then I suggest you re-evaluate what's important in your life.

Yes, those people earn far more than software workers. Perhaps not early in their career but over time they do. Are you actually the type that tells an employer that “money isnt everything” while that employer splashes on things such as you know a home and a family, working from home, while you’re ordered back to an office?

> Yes, those people earn far more than software workers

You are seriously ill-informed. Very few people working in medicine make as much, let alone more, than software developers. Many software developers even make more than primary care physicians!

And national defense? You have to be kidding me! Software developers live like kings compared to those defending the country. First responders in general are in the same boat. Most of them would love to make the money an entry-level software developer makes!

As far as being ordered back to the office, it's been nearly four years since everybody was sent home. Many employees have been hired since that time. "Return to the office" is a change in the employment contract. Many states, though not all, prohibit termination due to a post facto change in the employment contract.

But don't expect the people I mentioned above to cry about our having to return to the office. What we should be doing is pointing out to them that our WFH is making their commute easier, lowers their car insurance premiums, improves their air quality - in other words, how it benefits them.

Right, I mean it's understandable that fields like healthcare, construction, food service all physically demanding, stressful, and have lower pay, because they can all be remote right? We work in one of the most privileged fields ever. We should never forget how lucky we have it.

Here in the UK tech workers are clustered around parts of London. You can count on your fingers how many own a property, let alone have a family. You see full grown adults living with housemates and their only financial asset is a macbook pro and an iphone, with occasional holidays in cheap countries.

Remote work allowed some to buy property but are struggling after being ordered to return to work. Those with kids basically leave children in nursers to be raised by the state.

How lucky do you think they are? And how lucky are you knowing you have nothing to your name but a jira case and a manager to remind you of your place?

I don't have to clean up and slog through fecal matter, which I've done. I don't have to pull electrical wire and get shocked, because it was still live, which I've done. I don't have to work in a kitchen that's 100 degrees and hope that I don't slip and spill 300+ degree oil on me, which I've done.

My friend almost got Hepatitis C, because he was trying to save someone's life. My other friend got Covid during the pandemic, because he was trying to save lives in an emergency department.

My career isn't over, because I broke my hand too many times and I can't lift a 14 inch skillet. I have heat, because I make more than $12.00 an hour. I have health insurance (I'm American).

Yeah, I count myself really lucky.

I am sorry, but that's not how this works. Both software developers _and_ the jobs your described should benefit from better conditions. It would appear that you think that since other have it worse so should tech workers.

Most people on HN who speaks about how good tech is usually live in the US or Eastern Europe, where tech salaries are relatively high for relatively little upfront requirements.

On an unrelated note, I've had a former coworker who lived in the UK and was contracting to mostly US companies for this exact reason.

Yeah the UK is bust in terms of tech pay and conditions. But most tech workers have been in favour of hybrid or onsite. No wonder since the UK is rather under skilled, not just in tech. And usually it's those who can't work without endless talk due to lack of experience that want to be ordered back into offices. A shame, the UK used to be the lead in tech in Europe. No longer it seems - neither pay nor skill.

Tech is full of the softest people on earth. Unbelievable. Some people abandon their entire community to come to America for the privilege of working 80 hours a week washing dishes.

Soft how? For wanting to live in a house they own, and not wasting away hours on the highway, or to see their kids at dinner? I agree it is good to appreciate how good we have it compared to others, but that doesn't make our particular negative situation okay, when it doesn't have to be that way.

Hmm I have friends that work in construction and landscaping, even in bone chilling winter they are building shit outside. But those guys are tough…

Maybe they could start paying top management like normal employees.

But then how are they going to stay motivated and perform to their best??????? /s

If your CEO is a MBA you will have 10% layoffs every year, with hiring happening simultaneously.

It is called the vitality curve.

They believe that in a given workforce, 10% are non-producers and have to be put in a PIP or laid off.

https://en.m.wikipedia.org/wiki/Vitality_curve

These layoffs usually happen at the same time during the year.

Yup, and I find it incredible that seemingly very intelligent people make absolutely insane decisions like this. Is this short-term greed that makes MBAs do dumb stuff?

MBAs do not use the scientific method. They do whatever has worked before even if the understanding of how it worked is incorrect.

In other words, they keep cargo-culting it, claiming responsibility for the wins and blaming staff, the economy, etc. for the losses.

Yes. That is why AI will outperform them.

would be funny explaining to the markets that the company is doing a double blind experiment with layoffs.

Well, when the observed conclusion can't absolutely follow from the premises, you are supposed to reevaluate your premises.

I'd start with that "very intelligent" one.

I don’t get why everyone is so skeptical of this. It makes sense to me based on my experience. Everywhere I’ve worked has had an obvious bottom 10% that was low or negative productivity.

I think stack ranking is bad, but accelerating un-regrettable attrition is a no brainer if you want high performing teams.

It says they made a loss of $125 million this past quarter. That would have been fine a couple of years ago, when interest was zero and cash basically free. This is not ok in 2023 (and actually most points in history).

They'll probably open source Unity someday. There's not much money in selling dev tools, just ask Borland, Sun, or Microsoft.

Are Visual Studio Professional and Enterprise not profitable? Not bashing just curious.

They do give away VS Code and VS Community is free so I guess tgat must cut into profits...

I don't think the dev tools division has ever been profitable. It's always been done to support their platforms & operating systems.

Microsoft's DevDiv has been a billion dollar a year business for the past 20 years (I know, revenue != profit, but that's a big number to work with)

VS community came out right about when small businesses started really jumping onto LAMP/WAMP for LOB apps.

Not hard to draw the line from there to 'keeping people on IIS and MSSQL'

Not sure if it was the original plan, but vscode is now a sales vector for SaaS.

Yep. Doing Azure-related things is way easier in VS Code than other IDEs because so much deployment functionality is built in. It's still needlessly convoluted though.

Not just that, but “cloud” dev instances in the browser. Push a button, get your dev env set up in a container on Someone Else’s Server, presented through in-browser vscode (though I assume you can connect with regular vscode, too), is the promise.

I think jetbrains is doing a good job making and selling dev tools. But yes, very few in the world have been successful at it.

Jetbrains has been doing fantastic work for a long time now. I hope they stay private and profitable.

JetBrains have fantastic tools/products and a very pragmatic business model that is easy to understand. They spot real developer issues and solve the basics, that's why they are successful.

You won't find startup-y inflated delusions and useless-crap features there.

(disclaimer: I use their paid tools but I'm not associated the JetBrains in any way)

Sublime and Microsoft also are making it work - as are a number of smaller IDEs. Editors and dev tools tend to be pretty profitable as long as you remember the golden rule - let the small fish pirate freely, charge nothing for college students... and go after any of the large corporations using it - those are the people who subsidize the entire tool.

There's a lot of money selling dev tools, but not necessarily Microsoft levels of money. Also, Sun was actually a hardware company if you looked at where their revenue came from.

Cadence, Synopsys, MATLAB, Mathematica, JetBrains, Windriver, and many others make a ton of money selling specialized dev tools. The key in that market seems to be specialization, though, so most devs don't see their work.

On the other hand - ask Epic. Yes, their fortnite income dwarfs everything else - but the engine is still highly profitable.

Hi, do you have a source for the "engine is highly profitable"?

>There's not much money in selling dev tools, just ask Borland, Sun, or Microsoft.

I think that's not the case for Microsoft -- GitHub, Azure, OpenAI, Visual Studio etc. The make lots of money selling Dev Tools.

They appear to be making themselves more attractive for a sale lately. Do the unpopular stuff in advance, so the new company doesn't get blamed. Change the licensing, optimize revenue, expenses, and head count to make the book look a little better on paper..

Maybe they're heading to a chop-shop soon.

Reduced losses still means losses though.

Slightly off topic, but for those unhappy with Unity, I highly recommend Godot:

https://godotengine.org/

It's open source and constantly improving. It's missing some features from Unity, but it's still highly capable.

In 2021 they spent $1.6B to buy WetaDigital (founded by Peter Jackson among others)

At least they laid off the CEO that nearly managed to torpedo the entire product.

I'm of the opinion he was a scapegoat to draw the ire of the decision. The board were going to try to make that change anyway. If it went well enough that they didn't have to fire him, they'd still have him as a buffer for another unpopular change.

I think it's fair to target the board with a large amount of blame as well - but as CEO it's your responsibility... if the decision is going to torpedo the company then refuse to carry it out or leave.

I'm of the opinion it was his idea, he convinced the board it would be a change with some pushback but he'd get it across the line. He has a history of these changes (he worked at EA Games previously) while the board do not have a history of these changes. Thus I'm prepared to give the board the benefit of the doubt here and it was the board alone who could oust the CEO which they did so there are some small redeeming qualities here.

Boards don't make decisions, the executives do.

Unity needs to lay off about 6500 people and replace the remaining 1000 employees with individuals worth about $500k/year. There is nothing comprehensible about employing 7500 people for a software program. How would they even understand the codebase with almost ten thousand developers making changes every day?

Bad leadership always seems to result in heads rolling first before leadership is replaced

The CEO did step down already: https://techcrunch.com/2023/10/09/john-riccitiello-steps-dow...

CEO John Riccitiello has already lost his job [1]

[1] https://www.theverge.com/2023/10/9/23910441/unity-ceo-presid...

He wasn't the only member of leadership.

I'd be happy to fuck up this badly and get fired for $12M. In fact, I'd do it for $11M!

https://www1.salary.com/John-Riccitiello-Salary-Bonus-Stock-...

Let's keep the bidding going. I'd do it for $10M!

$9M or I (don’t) walk!

As a counter example, Flexport recently fired its CEO, then did layoffs after.

> reduce our office footprint

Haven't these geniuses ordered their workers back into offices?

they're still losing money.. it's inevitable...

> layoffs despite increased revenue

Why despite? Layoffs are here for more profit!

more short term profit...

Firing some could also bring a long-term profit.

Unity lost $921M in 2022.

Crap article. Doesn't state how many layoffs, from which business/product unit, etc. Par for the course from gaming industry news which tend to focus less on gaming, and more on executive pay, unionization, identity politics in gaming, etc.

“Clickbait”

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