This really does seem like Unity is destroying their business for pennies. Mobile game display ads seem like a very, very low value business to be in and I would imagine rates are going down all the time. Unity may manage to wipe out AppLovin by burning down the rest of their business, but winning king-of-the-hill on top a pile of ashes does not seem to be a high value position.
Edit:
It's as if Unreal wants to be king of glossy, fancy, high value brochures, magazines, and books. Unity wants to be king of phone book yellow page ads.
> Mobile game display ads seem like a very, very low value business to be in
Might be much less prestigious than selling games that aren't predatory, but Unity does in fact make a lot more money from selling ads in mobile games than licensing and by a very wide margin.
The sad truth is that for every "real gamer", there are 10+ regular mom and pop playing candy crush and buying boosts every other day.
> Create Solutions (Game engine) second quarter revenue of $193 million was up 17% year-over-year.
> Grow Solutions (Ads) revenue of $340 million was up 157% year-over-year
And an even better exerpt:
> This quarter we partnered with
one of the leading dating apps in the world, Tinder, to power their video ad monetization. Expanding
beyond games is part of our goal of providing the most comprehensive platform for the App
Economy, adding value to customers.
Customers are not players here, they are the companies using Unity.
I wish they'd go the way of Epic and make an actual game with their engine. Maybe they could make some extra income if they made anything good.
They've tried a few times and given up each time. It's pretty embarrassing when they've done things like released a fully featured multiplayer FPS demo that doesn't actually work out of the box and has a custom editor tool manager, custom scene loader, and custom networking layer that were never merged into mainline unity. Meanwhile they still have no official stable networking module. The old functional one was sunset and the new ones are still in beta.
> NOTE: Due to a bug in Unity 2018.3, you have to take the following step right after the initial import: 1 Search for Firstperson_Projection in the Project search field. Select the 4 shaders, right click and reimport them. 2 If you have script compile errors related to entities, you need to remove and re-install the entities package.
> One day soon we will remove this note and there will be cake.
> Once the editor is ready, open the Project Tools Window by navigating to FPS Sample > Windows > Project tools.
> Keep this window docked as you will use it a lot. From here you can open the levels, build assetbundles and build standalone players.
So Unity is a digital ad company that gives away a game engine, or sells it at a loss, as a way to sell ads targeted based on what they know about the people playing the game. Ad revenue is in decline across the whole industry, so now Unity is looking to get a bigger slice of the pie by displacing AppLovin as the data harvester/ad provider
Aside: I wonder how much user data Unity-based games harvest from mobile devices. This may shed some much-needed light on privacy, advertising and mobile games.
There's just no way this change is actually gonna happen. Many prominent indie developers have already announced they'll be switching away from Unity for future projects, and you have to think that larger studios are drawing the same conclusions. The ship is sinking.
Unity will retract this. Switch to revenue share or whatever. They'll eat a huge loss of trust because of this idiocy, but they'll remain a relevant game engine. I just can't see any other scenario.
I think "loss of trust" is understating it. This is an existential threat for lots of studios, and I can't imagine them placing future bets on the platform.
They've gotten commodified. It's going to be like being Oracle in a Postgre/MySQL world. You'll have some big legacy customers who just can't switch. But the market as a whole was primed to pack up and leave anyway. Gamedev has high turnover, and what the new kids are going to gravitate towards is what works immediately for them, which Godot superseded Unity on out-of-the-box experiences a long while back, and now has the tutorial content to accompany it.
What Unity has in its favor is mostly in the Asset Store, but that's shifted towards being a commodity as well.
> but they'll remain a relevant game engine
For a little while. The problem is that Unity is a public company, merged with a malware company, and (currently) headed by somebody with no understanding of their own customers. But nobody looking to make games right now is going to start using Unity. Many indie developers are going to transition off, and the major players who still use it are likely going to find that Unity is going to start squeezing them to keep any semblance of profitability. Maybe big games like Genshin/Cities Skylines/Pokemon Go stick with it, but Unity doesn't survive that transition.
Revenue share is going to be worse for most indie developers - the .20 install fee is only bad for extremely high volume, low ARPU games. Basically mobile F2P. They deserve a different payment option, but switching everyone to revenue share is would be much worse for a typical Steam, $5+ indie game.
Their current CEO is one of those generic executive types with a background selling snacks, sporting supplies, and private equity investments. His prior game industry experience was running Electronic Arts so well that the board forced him to resign. This does not sound like the path to anything other than short-term “number go up” management.
I don’t disagree but in this day and age, this kind of uninspired management is all most corporations care for.
The days that, say, a company whose main bread and butter is engineering is seeking out an engineer to lead their company are well and well and true behind us.
Nowadays most companies are looking for a “number go up” guy.
It's kind of amazing just how big a Rubicon they crossed. Like, they're going to walk the changes back at this point, I don't think that's even in question anymore – but it won't matter. They have broadcast loud and clear that they can and will alter the deal.
This is the biggest issue. Unity have clearly signaled that the previous and current user agreements to use their software are useless as they may be retroactively changed at any time.
What company would put their bottom line at risk dealing with these terms?
Unity is already making more money from ads than from engine license sales. Most developers don't pay for using the engine. Ad sales pay for engine development.
I'm not an industry expert (mobile gaming) but currently (14/09/2023) App Lovin (NASDAQ:APP) is worth more than Unity (NYSE:U) and they make twice as much in revenue with a higher profit margin (less negative).
Its seems like advertising is where its at with mobile gaming and I don't why that will change anytime soon.
During his tenure at EA, Unity CEO previously floated cash micro transactions to purchase in game ammo if a player ran out but could not find any.
Generally speaking it’s not hard to argue corporate leadership has lost the fucking plot altogether and are steering everything in to a stone cliff face.
Data driven fiat economics and viral media is being weaponized as a mathematical minority hallucinate they are some essential element of reality itself and not just a few meat bags LARPing hand me down spoken tradition.
It's like the classic startup ideas around "People need to organize their consumption of X, so if we just put in a button allowing them to buy X next to their lists they'll buy it from us!"
Missing the point that most people don't want that.
Except that Genshin will not be subject to it. Genshin Impact is made by Mihoyo, a Chinese company. In order to sell Unity licenses to Chinese customers, Unity Technologies created a joint venture called Unity China, and, as is standard Chinese government policy, it must be majority-owned and controlled by Chinese entities. The majority owner of Unity China? Mihoyo.
(On top of that, it makes no sense — Genshin would be a poster child for revshare: a single entity that has made billions off microtransactions and that can be easily audited in one go.)
That explanation makes no sense, because their changes were achieving the exact opposite. Genshin has a high ARPU, $0.01 per install will capture basically none of that. (Yes, $0.01 because the Unity fees are regressive, the fewer installs you have the more you have to pay per install. Genshin Impact obviously will fall into the bucket with the lowest cost.)
If the goal were to get a cut of Genshin while treating everyone else as a rounding error, they'd have changed the contract to be a revenue share. Or they would not have made the install fees regressive.
> Mobile game display ads seem like a very, very low value business to be in and I would imagine rates are going down all the time
You'd be incorrect. It's a huge business. Less ads in general more paid install services as a result of ads for games, but both are huge businesses tbh.
It's a huge business, but it feels like it's much more of a commodity business.
Changing out the ad network is probably a matter of a fairly simple swap out of highly componentized components. I'm sure devs bounce from network to network fairly quickly chasing better revenue or support experiences.
Changing out a game engine is much heavier plumbing.
From that perspective, Unity might be going for a tail-wags-the-dog approach: making their ad platform stickier by tying it to something sticky, but then you'd expect to see something more direct towards that goal like "we don't allow use of other ad platforms in Unity projects".
They also went for a lot of splash damage on non-mobile scenarios-- ad-supported games don't really exist on the desktop (yes, a modest exception for some casual titles, typically stuff like Facebook-based games)
As I understand it they have been losing money for years at ever-increasing rates so it's not like what they were doing before was working. Maybe they are doing the wrong thing now but business as usual probably had no future.
if thats all it is, then it seems a simple solution... split the product up into two. One for mobile game development and the other for PC/Console game development.
Charge them separately at different schemes best tailored for those markets.
What a lovely way of saying that everyone who doesn't leave the platform is about to become a Ubisoft tier Developer filled with spyware. Burning even their users that don't quit the platform. How absolute this decimation of their user base will be is almost impressive in how destructive this move has been. I almost have to commend it's comprehensiveness.
Unity may have damaged themself enough with this that AppLovin might get another chance to buy. Unity’s stock price has dropped 8% since this was announced.
Another fun fact, the Unity CEO and several board members sold some of their stocks a few weeks ago. [1]
It is not the same. D&D fans can of course shit on WotC and Hasbro, but they would still be D&D fans in the end of day even if changes were not reverted. Fans can't just go and become fans of "free and open source D&D".
Individual people are weak and not rational. Majority will always continue to pay for entertainment companies products and bring money no matter how bad they treated by said companies. Think of Disney or Electronic Arts games.
Unity Technologies is a B2B software and service provider. Their decision to do a rag pull under 10,000+ of businesses will force everyone in industry to diversify. Unity not going under anytime soon, but now every single CEO and CTO in gamedev will be doing research on alternatives simply because pricing Unity come up with is not viable for a lot of games.
It's a lot easier, I think, to switch from D&D 5E to Pathfinder 2e than it is to switch from Unity to Unreal/Godot or whatever. The stakes are a lot lower, that's for sure.
You're talking about the consumers, and you're 100% right in regards to them. But you seem to be equating D&D fans to the game studios, and I see that as a false equivalency.
Consumers of Unity games == consumers of D&D
Companies based on the OGL == Companies based on Unity license
WotC/Hasbro == Unity
D&D consumers =/= companies based on Unity license
In both cases, a large corporation (WotC/Hasboro, Unity) captured the space with promises that their platform would be free to use in perpetuity. In both cases, smaller companies were built around this garuntee; they naively thought that in perpetuity meant in perpetuity. In both cases, these smaller companies that popped up grew the large corporations to what they are today.
In both cases, the corporation tried to sneakily revoke the older agreements to trick these smaller companies into a terrible deal. In both scenarios, the corporation displayed rent-seeking behavior and proposed changes that would destroy the companies that helped them become what they are today.
> Fans can't just go and become fans of "free and open source D&D"
Not sure what you mean by this, but my friends and I are and always have been fans of "free and open source D&D" because that's literally what D&D has always been. That's why so many were angry with the OGL changes; thats why the OGL changes got dropped. And, once Hasboro tipped their hand, many did transition to free and open source tabletop games that respect their third party creators and consumers alike https://www.polygon.com/23587624/non-dnd-dungeons-dragons-og...
To clarify my analogy: D&D == gaming, WotC/OGL == Unity, Pathfinder == Unreal. You can still work in the "gaming" domain, but switch from Unity to Unreal. Similar to how some D&D tabletop studios are switching from OGL to Pathfinder while staying in "D&D" domain.
Wondering if Microsoft shouldn't have bought Unity, It could have made sense, because of its focus on developer, because of its interests in gaming and because it's a huge showcase for C# and .Net as many of the features of unity could have been folded into regular .Net or there could have been an opportunity to have a '.GameNet' version, maybe.
Monogame came in to fill in the XNA gap to a certain extent. Works pretty well as long as you're making 2D games. I'm trying to make a 3D game in it right now, and it's...okay, not great.
> I guess this could also be a play to make Microsoft interested in buying them out when money crisis hit.
That would be a stupid idea. Companies that are in financial trouble tend to be cheaper to buy, typically a lot cheaper if there’s only one serious buyer candidate.
If they think “when we’re almost broke, we can sell out to Microsoft for X million”, certainly they can get at least the same amount now that they aren’t?
Xbox doesn't provide a game engine, just lower level APIs. Unity is a popular way to get games on Xbox for folks who can't build their own engine. Further, things like HoloLens run Unity as a first class dev environment.
I used to work on both Xbox and HoloLens at Microsoft, but this is all public info.
I've been a pro Unity dev, as an employee and then a freelancer running a small team doing contracts for 10 years. I think this was in the back of my mind for a long time but yesterday a switch just flipped in my head and I decided Unity are just not to be trusted anymore, the company has lost all credibility and I never want to use Unity for another project. I'm learning Godot atm.
"Make your apps have a shitty UX, and sell your user's data without their consent, or we'll force you to discard all the work you did under our previous license"
In other words, any unity products going forward should be considered suspect. Any new games should avoid the entire company as they are clearly dishonest and have no interest in maintaining whatever contract terms you might agree to today.
Readit News
Edit: It's as if Unreal wants to be king of glossy, fancy, high value brochures, magazines, and books. Unity wants to be king of phone book yellow page ads.
Might be much less prestigious than selling games that aren't predatory, but Unity does in fact make a lot more money from selling ads in mobile games than licensing and by a very wide margin.
The sad truth is that for every "real gamer", there are 10+ regular mom and pop playing candy crush and buying boosts every other day.
> Create Solutions (Game engine) second quarter revenue of $193 million was up 17% year-over-year.
> Grow Solutions (Ads) revenue of $340 million was up 157% year-over-year
And an even better exerpt:
> This quarter we partnered with one of the leading dating apps in the world, Tinder, to power their video ad monetization. Expanding beyond games is part of our goal of providing the most comprehensive platform for the App Economy, adding value to customers.
Customers are not players here, they are the companies using Unity.
They've tried a few times and given up each time. It's pretty embarrassing when they've done things like released a fully featured multiplayer FPS demo that doesn't actually work out of the box and has a custom editor tool manager, custom scene loader, and custom networking layer that were never merged into mainline unity. Meanwhile they still have no official stable networking module. The old functional one was sunset and the new ones are still in beta.
https://github.com/Unity-Technologies/FPSSample
> This project is based on Unity 2018.3
> NOTE: Due to a bug in Unity 2018.3, you have to take the following step right after the initial import: 1 Search for Firstperson_Projection in the Project search field. Select the 4 shaders, right click and reimport them. 2 If you have script compile errors related to entities, you need to remove and re-install the entities package.
> One day soon we will remove this note and there will be cake.
> Once the editor is ready, open the Project Tools Window by navigating to FPS Sample > Windows > Project tools.
> Keep this window docked as you will use it a lot. From here you can open the levels, build assetbundles and build standalone players.
https://github.com/UnityTechnologies/open-project-1
> Note: As of December 2021, Open Projects and Chop Chop are not in development anymore.
Aside: I wonder how much user data Unity-based games harvest from mobile devices. This may shed some much-needed light on privacy, advertising and mobile games.
Which makes me wonder where the rest of their revenue comes from, but I’m too lazy right now to go through their financial statements to find out.
Unity will retract this. Switch to revenue share or whatever. They'll eat a huge loss of trust because of this idiocy, but they'll remain a relevant game engine. I just can't see any other scenario.
I think "loss of trust" is understating it. This is an existential threat for lots of studios, and I can't imagine them placing future bets on the platform.
What Unity has in its favor is mostly in the Asset Store, but that's shifted towards being a commodity as well.
You under-estimate the degree to which companies can be driven by an exec determined to have their way.
The days that, say, a company whose main bread and butter is engineering is seeking out an engineer to lead their company are well and well and true behind us.
Nowadays most companies are looking for a “number go up” guy.
What company would put their bottom line at risk dealing with these terms?
Its seems like advertising is where its at with mobile gaming and I don't why that will change anytime soon.
Generally speaking it’s not hard to argue corporate leadership has lost the fucking plot altogether and are steering everything in to a stone cliff face.
Data driven fiat economics and viral media is being weaponized as a mathematical minority hallucinate they are some essential element of reality itself and not just a few meat bags LARPing hand me down spoken tradition.
Missing the point that most people don't want that.
(On top of that, it makes no sense — Genshin would be a poster child for revshare: a single entity that has made billions off microtransactions and that can be easily audited in one go.)
If the goal were to get a cut of Genshin while treating everyone else as a rounding error, they'd have changed the contract to be a revenue share. Or they would not have made the install fees regressive.
You'd be incorrect. It's a huge business. Less ads in general more paid install services as a result of ads for games, but both are huge businesses tbh.
Changing out the ad network is probably a matter of a fairly simple swap out of highly componentized components. I'm sure devs bounce from network to network fairly quickly chasing better revenue or support experiences.
Changing out a game engine is much heavier plumbing.
From that perspective, Unity might be going for a tail-wags-the-dog approach: making their ad platform stickier by tying it to something sticky, but then you'd expect to see something more direct towards that goal like "we don't allow use of other ad platforms in Unity projects".
They also went for a lot of splash damage on non-mobile scenarios-- ad-supported games don't really exist on the desktop (yes, a modest exception for some casual titles, typically stuff like Facebook-based games)
Charge them separately at different schemes best tailored for those markets.
Dead Comment
Another fun fact, the Unity CEO and several board members sold some of their stocks a few weeks ago. [1]
[1] https://kotaku.com/unity-developer-fee-installs-john-ricciti...
Individual people are weak and not rational. Majority will always continue to pay for entertainment companies products and bring money no matter how bad they treated by said companies. Think of Disney or Electronic Arts games.
Unity Technologies is a B2B software and service provider. Their decision to do a rag pull under 10,000+ of businesses will force everyone in industry to diversify. Unity not going under anytime soon, but now every single CEO and CTO in gamedev will be doing research on alternatives simply because pricing Unity come up with is not viable for a lot of games.
Consumers of Unity games == consumers of D&D
Companies based on the OGL == Companies based on Unity license
WotC/Hasbro == Unity
D&D consumers =/= companies based on Unity license
In both cases, a large corporation (WotC/Hasboro, Unity) captured the space with promises that their platform would be free to use in perpetuity. In both cases, smaller companies were built around this garuntee; they naively thought that in perpetuity meant in perpetuity. In both cases, these smaller companies that popped up grew the large corporations to what they are today.
In both cases, the corporation tried to sneakily revoke the older agreements to trick these smaller companies into a terrible deal. In both scenarios, the corporation displayed rent-seeking behavior and proposed changes that would destroy the companies that helped them become what they are today.
> Fans can't just go and become fans of "free and open source D&D"
Not sure what you mean by this, but my friends and I are and always have been fans of "free and open source D&D" because that's literally what D&D has always been. That's why so many were angry with the OGL changes; thats why the OGL changes got dropped. And, once Hasboro tipped their hand, many did transition to free and open source tabletop games that respect their third party creators and consumers alike https://www.polygon.com/23587624/non-dnd-dungeons-dragons-og...
They literally smoked all their goodwill in a day with their retrospective revise the terms to something that fucks over ever dev thing
Also if Microsoft is going to buy Unity, it's better to wait until the stock plummets.
Especially after the bruising FTC for from the Activision fight. Unlike Activision, the FTC actually has a case here.
But I don't know, it could just be an ordinary bad bussiness decision
That would be a stupid idea. Companies that are in financial trouble tend to be cheaper to buy, typically a lot cheaper if there’s only one serious buyer candidate.
If they think “when we’re almost broke, we can sell out to Microsoft for X million”, certainly they can get at least the same amount now that they aren’t?
see reply comment
I used to work on both Xbox and HoloLens at Microsoft, but this is all public info.
Either way, I want to get in on the early Godot waves while I can.
In other words, any unity products going forward should be considered suspect. Any new games should avoid the entire company as they are clearly dishonest and have no interest in maintaining whatever contract terms you might agree to today.