> Unity lit money on fire for decades to buy a market advantage that overrules the basic economic incentives that supposedly ensure free markets work best for customers. It was successful in doing that because it's very hard for a sustainable business to compete against one that is fine losing billions of dollars.
This right here is the most notable part of the article, and it is entirely correct - it has been for years. Venture capital is fine to use for actual ventures, to create new markets or hell, to break into a market with entrenched powers... but when it is used on a long time purely to undercut and destroy legitimate prior businesses (taxis/Uber, hotels/AirBnB, game engines/Unity), authorities should step in.
It's time to revive anti-trust, anti-dumping and other anti-predatory politics.
This part of the article needs a citation. Unity has been setting money on fire, but it hasn't been buying a market advantage. It's been burning money on highly, highly, highly questionable (at best) acquisitions like buying Weta and Iron Source as well an insane hiring spree and then paying those people for years for work and churn that Unity never actually manages to ship in the engine.
The other elephant in the room is that the owner of Unity's main competitor is quite a bit larger than it is. I can't say that anything Unity buys would give it a market advantage.
Uber isn't a good example. They came up with a business model that literally required customers to get into strangers' cars. Eighteen nanoseconds later, the taxi industry was dead.
There is no other possible conclusion to draw, except that the taxi industry had it coming.
Fast-forward to today. The venture capital has long since run out. Taking an Uber costs at least as much as the taxis ever did. Yet, do you foresee any way for the taxi industry to make a comeback, except by holding the rest of us at gunpoint?
Uber used VC money to heavily undercut the taxi rates, heavily inflate driver pay and decided to speedrun breaking as many laws as possible
As for getting into strangers’ cars, getting in a taxi is no different.
Do you think Uber was able to become as ubiquitous as it is if it didn’t heavily subsidize both sides of the equation and abide by the laws?
I doubt it.
Like you aptly describe now the fares as on par if not more than taxis, because now that they’ve attained dominance over the market by burning VC money, they can squeeze the customers and drivers alike.
I’m not even sure if they’re turning a profit yet.
I suspect it's still cheaper than Taxis would have been without it existing especially counting for inflation.
But then, the biggest issue being solved wasn't price it was availability. You could call for a Taxi at a craft-beer pub in Texas in 2010 and it was a crap shoot the thing ever arrived or if it did maybe an hour later.
> Yet, do you foresee any way for the taxi industry to make a comeback
Since the taxi industry is far from dead in a whole lot of places, absolutely. In my city, taxis offer a superior experience to ride-sharing companies and they're doing just fine. Uber and Lyft aren't grabbing much market share from them. I've been in many other cities where the story is the same.
> The immediate follow up question is can corporate support of open source projects count as product dumping?
For what it's worth, I'd classify true open source as the only exception to anti-dumping laws. If you want to burn money to fuck over everyone else, give up your competitive advantage.
They have won "market share" I'm not sure exactly which competitors they've undercut in the process? Are there any examples of a legitimate competitor that failed because they couldn't compete on price?
Everybody points to uber but uber won against taxis because they had an app and taxis had a phone number that often wouldn't even accept a downtown cross st.
As a seattlite who got tired of hunting for a building that still had a street number just to get a cab on 5th and Jackson or what ever I'm glad uber killed taxis
Because of ZIRP, there's an entire generation of business leaders that have mastered raising money but have no idea how to make it. Expect to see many more own goals like this in the next few years as they try to figure out how.
Also, this entire generation has no problems speaking about what make them successful, writing books/blogs about business, being keynote speakers etc when they would never be able to build a single business without massive financing. This is changing American entrepreneurship for the worse - in the past, the stories used to be all about someone starting a small business with no or limited seed money and slowly building an empire from scratch.
I feel like this applies to consumers too. We have a whole generation of people that don’t want to pay for anything (speaking generally, not just Unity related). People are building their businesses using tools that are free/near-free and that are losing vast sums of money. It’s created a broken market both from the supply and demand sides and it’s why businesses are having to resort to subscriptions. Almost none of the people using Photoshop would pay $1000 for it every time a new major update comes out, even though they use it daily in their business and generate their income from it.
This is just reality though. I know it really feels "wrong" that money was so cheap for so long, but in all likelihood, interest rates will return to close-to-zero in the long run precisely for the factors you call out.
Business investments are now overwhelmingly software; it doesn't take massive infusions of capital to make your business more efficient, because efficiency gains are achieved through acquiring a copy of an infinite resource -- software.
Sure software vendors can create artificial scarcity through licensing fees, but competitive market pressures will keep those down, and the floor of software fees is very low. As a result there has been less demand for money than there has been in the past. Hence lower interest rates. (Aging populations and slowing population growth also drive interest rates down.)
In other words, cheap money is an implication of the software-driven world we live in, not some sort of moral failing. It's not the result of policymakers doing something with punchbowls to prop up governments or whatever dumb metaphor gets thrown around.
- Unity itself can hire dark botnets to beef up their profits at any time
- game developers need to start selling with the caveat "5 re-installs included" and of course you change the price to over-sell how many installs the average person does
- game developers are now incentivized to make huge huge huge game downloads for no good reason other than to make people think twice about uninstalling and reinstalling later since it takes so long
- steam and game distribution platforms now need to start limiting re-installs and downloads for everyone, more complexity, more hassle, more bugs
- everyone needs to start running whitelist firewalls again, since automatic private data exfiltration is getting so out of control we need to block all internet access by default now
This exactly (minus the huge downloads, no point). If they were successful with their “trust us, we can magically figure out number of installs” game; the incentives of the entire industry would be reconfigured to the 2000s of EA downloader expiring your purchase after 5 installs.
We can thank the heavens for Steam to murder that in its crib and we can hope they, still privately owned, won’t be tempted by the ultimate sin here.
2023 has really been the year of established companies self-immolating in the name of more money. Is this the result of some new business strategy being pushed to high level execs? Or has the idiocracy produced by failing upwards finally come home to roost?
End of ZIRP is making them all suddenly have to actually make money instead of relying on loans and investments. Unfortunately two decades of ZIRP means that none of the current leadership knows how to make money.
Companies have been self-immolating for short term gains since basically forever, so that is nothing new. Raising interest rates have definitely pushed some long-term money losers over the edge though. Rather than subsisting on ever more funding rounds they now need to figure out how to make money out of their huge "free tier" subscriber base and the quickest way is to start charging them money. Predictably, the people who formerly got valuable stuff for free are not fans of this idea.
I think it would make more sense to take a cut of the revenue when a game is sold, as that is easier to calculate for the developers. I can understand why they chose installs though as that's easier to measure for them and they would need to trust developers with their revenue numbers as they don't own the distribution platform like e.g. Apple does, but honestly they could've just used the installation rate as a sanity check for the license numbers reported by developers.
As a game developer I would be very wary about signing such a contract as I'm sure these metrics can be easily gamed, so anyone with enough malicious intent could probably install-bomb my game and rack up large charges for me, and in the end I would be responsible for proving that those installs were malicious (which I imagine could be quite difficult).
Like, you better not make a good game that is installed more than once.
Pay-per-install seems like a really bad way to charge dev costumers by. E.g. a nice long lived game will be charged way more than shovelware, due to users reinstalling when they buy new machines.
I've installed Deus Ex probably 30+ times since I first played it at launch. Hell, sometimes I'll install it, decide not to play it, uninstall it, then reinstall it a week later. I've reinstalled it like three times this month because I can't decide whether I feel like replaying it or not. That would basically mean over 10% of the game's original full price going towards Unity with ongoing costs in perpetuity. That's without distribution (whether brick and mortar or Steam) and other costs, and without the developer further monetizing the game off of me.
As you can see, they have promised they would not take a cut of the revenue, as well as specified in their license that you would not have to accept the new license as long as you used an old version. Then changed the license and are now claiming that you can't do that.
People used to pay less-than-reputable businesses for services that would spam ad clicks on competitor's search ads, draining their advertising budgets. So I could definitely see the same "services" for installs.
Anyone who knows what’s going on in the Minecraft server scene knows it won’t even need competitors for that..
There is so much wrong here:
- “Trust us we figured our install measurements” is insane. We all worked on this for decades, it’s a dilemma with multiple axes, one being piracy.
- Everyone in games for a decade or so has been in a company that’s been screwed by publishers or partners on sales. Developers embraced unique activation keys and master servers to stop publisher fraud at least as much as as an anti consumer piracy measure.
- The only tradeoff to install transparency is surveillance and tracking which trades off against piracy. Most developers are not interested in pushing boundaries there.
Trust us with a company that now has broken every single promise they have made… I don’t think so
> After initially telling Axios earlier Tuesday that a player installing a game, deleting it and installing it again would result in multiple fees, Unity's Whitten told Axios that the company would actually only charge for an initial installation. (A spokesperson told Axios that Unity had "regrouped" to discuss the issue.)
There's absolutely zero chance that Unity can track such a thing precisely. To say nothing of their handwavey "proprietary data model" that uses nothing more than vibes to determine how much a developer is on the hook for. It's all corpo-speak nonsense from a clueless CEO who has no idea what he's doing.
Unity has no incentive to solve this. They’ll push it onto developers to provide a deduplication in a clumsy process after they’ve already been billed for the month
This is a bit naive. Lots of customers of unity have gone bankrupt. Did they retroactively waive the $2000/seat yearly pro subscription (5k for enterprise) or any other fees for those companies? Of course not.
That doesn’t seem to bother all the other businesses out there who are also the moderators of abuse within their own domain. Such as ad networks who include bots with their page impression statistics.
There's really no way for them to recover the lost trust. Even if they backtrack everything the mistrust will be there. The only way out in the end might be to open source the engine.
> There's really no way for them to recover the lost trust.
As many have discovered throughout the years, Companies don't need "trust" to be profitable
Ubisoft has been a laughing stock for a decade, EA still holds the record for lowest rated reddit comment (feel your pride and accomplishment), and "it just works" in Bethesda world
Bethesda you know what you are buying into, and at least, it is a simple transaction.
You know the game will run like ^$^@% for a while, if not for good.. You know the modders will fix it, and smart folks will wait for the sales on their titles, because by the time they go on sale, they'll be well supported by mods, and less buggy.
So.. I'd keep them clear of the other sleazoids ;).
That's because it's not the consumers who are the ones who hold the power, it's the labor force. If you're a conscientious engineer working as a game dev for EA or Ubisoft, you should reconsider your options. It's likely there are plenty of options for one of your caliber.
I don't think that would solve it for them at all. They'll still want to lock you in with their services and whatnot. Besides, they probably don't have the rights to open source the engine.
They should just cap their take at "up to 5% rev share". At least at that point there's no worry about runaway costs.
> The only way out in the end might be to open source the engine.
The problem for unity is that it costs a ton of money to develop the engine and not enough people pay them for it. Open sourcing the engine does not help with that problem and might even make it worse.
No one has mentioned Apple yet. Unity is Apple's exclusive partner on Vision Pro (for now at least). I can't see Apple being especially thrilled with this.
My pipe dream would be Valve buying unity, being a private company they would not have to deal with pressure from shareholders and they have a good track record with developers and customers.
But they already have their own Source game engine so no point in them doing that.
Microsoft is honestly a better fit given Unity's C# roots and Visual Studio integration. But I find it hard to imagine Microsoft being all that interested in Unity these days. They're already attracting intense antitrust scrutiny vis-a-vis their attempted Activision-Blizzard acquisition.
That would be quite something. Perhaps this would also result in Unity's ad business being shuttered or at least sanitized, similar to how Shazam shed all of its third party tracking junk after Apple bought it.
If Apple buys it, it'll quickly head down the path of exclusivity. They'll find some "security" excuse for it that'll be enough for their reality distortion field to do its thing.
Readit News
This right here is the most notable part of the article, and it is entirely correct - it has been for years. Venture capital is fine to use for actual ventures, to create new markets or hell, to break into a market with entrenched powers... but when it is used on a long time purely to undercut and destroy legitimate prior businesses (taxis/Uber, hotels/AirBnB, game engines/Unity), authorities should step in.
It's time to revive anti-trust, anti-dumping and other anti-predatory politics.
There is no other possible conclusion to draw, except that the taxi industry had it coming.
Fast-forward to today. The venture capital has long since run out. Taking an Uber costs at least as much as the taxis ever did. Yet, do you foresee any way for the taxi industry to make a comeback, except by holding the rest of us at gunpoint?
Uber used VC money to heavily undercut the taxi rates, heavily inflate driver pay and decided to speedrun breaking as many laws as possible
As for getting into strangers’ cars, getting in a taxi is no different.
Do you think Uber was able to become as ubiquitous as it is if it didn’t heavily subsidize both sides of the equation and abide by the laws?
I doubt it.
Like you aptly describe now the fares as on par if not more than taxis, because now that they’ve attained dominance over the market by burning VC money, they can squeeze the customers and drivers alike. I’m not even sure if they’re turning a profit yet.
But then, the biggest issue being solved wasn't price it was availability. You could call for a Taxi at a craft-beer pub in Texas in 2010 and it was a crap shoot the thing ever arrived or if it did maybe an hour later.
Since the taxi industry is far from dead in a whole lot of places, absolutely. In my city, taxis offer a superior experience to ride-sharing companies and they're doing just fine. Uber and Lyft aren't grabbing much market share from them. I've been in many other cities where the story is the same.
We live in very interesting times while all this unravels.
For what it's worth, I'd classify true open source as the only exception to anti-dumping laws. If you want to burn money to fuck over everyone else, give up your competitive advantage.
It can when the competitors are dead, and the patron yanks all funding and support from the project.
I can't imagine trying to prove that in court though.
As a seattlite who got tired of hunting for a building that still had a street number just to get a cab on 5th and Jackson or what ever I'm glad uber killed taxis
It would be like if no pizza place had mobile ordering and a new one started that had it; that was the killer feature.
Everything else (I personally believe) was hyped up by Uber so that the taxis wouldn't realize what the real competitor was until too late.
Now there may be taxi hailing apps, but nobody knows the name of them, and they're different for every city.
It had an app. It was like Uber, but worse in every way you can possibly imagine and outrageously priced.
I don't like an Uber monopoly either, but it doesn't mean the status quo was better before.
Also, this entire generation has no problems speaking about what make them successful, writing books/blogs about business, being keynote speakers etc when they would never be able to build a single business without massive financing. This is changing American entrepreneurship for the worse - in the past, the stories used to be all about someone starting a small business with no or limited seed money and slowly building an empire from scratch.
Everything is so exceptionally complex these days I just don't think it's feasible to bootstrap an innovative business from your garage.
Business investments are now overwhelmingly software; it doesn't take massive infusions of capital to make your business more efficient, because efficiency gains are achieved through acquiring a copy of an infinite resource -- software.
Sure software vendors can create artificial scarcity through licensing fees, but competitive market pressures will keep those down, and the floor of software fees is very low. As a result there has been less demand for money than there has been in the past. Hence lower interest rates. (Aging populations and slowing population growth also drive interest rates down.)
In other words, cheap money is an implication of the software-driven world we live in, not some sort of moral failing. It's not the result of policymakers doing something with punchbowls to prop up governments or whatever dumb metaphor gets thrown around.
- Unity itself can hire dark botnets to beef up their profits at any time
- game developers need to start selling with the caveat "5 re-installs included" and of course you change the price to over-sell how many installs the average person does
- game developers are now incentivized to make huge huge huge game downloads for no good reason other than to make people think twice about uninstalling and reinstalling later since it takes so long
- steam and game distribution platforms now need to start limiting re-installs and downloads for everyone, more complexity, more hassle, more bugs
- everyone needs to start running whitelist firewalls again, since automatic private data exfiltration is getting so out of control we need to block all internet access by default now
We can thank the heavens for Steam to murder that in its crib and we can hope they, still privately owned, won’t be tempted by the ultimate sin here.
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Dead Comment
As a game developer I would be very wary about signing such a contract as I'm sure these metrics can be easily gamed, so anyone with enough malicious intent could probably install-bomb my game and rack up large charges for me, and in the end I would be responsible for proving that those installs were malicious (which I imagine could be quite difficult).
Pay-per-install seems like a really bad way to charge dev costumers by. E.g. a nice long lived game will be charged way more than shovelware, due to users reinstalling when they buy new machines.
That's absurd.
How is it easier to measure? Bundles, sales, re-installs, charity events, Game Pass... There are a million ways to install a game.
There is so much wrong here:
- “Trust us we figured our install measurements” is insane. We all worked on this for decades, it’s a dilemma with multiple axes, one being piracy.
- Everyone in games for a decade or so has been in a company that’s been screwed by publishers or partners on sales. Developers embraced unique activation keys and master servers to stop publisher fraud at least as much as as an anti consumer piracy measure.
- The only tradeoff to install transparency is surveillance and tracking which trades off against piracy. Most developers are not interested in pushing boundaries there.
Trust us with a company that now has broken every single promise they have made… I don’t think so
They backtracked.
https://www.axios.com/2023/09/13/unity-runtime-fee-policy-ma...
> After initially telling Axios earlier Tuesday that a player installing a game, deleting it and installing it again would result in multiple fees, Unity's Whitten told Axios that the company would actually only charge for an initial installation. (A spokesperson told Axios that Unity had "regrouped" to discuss the issue.)
This is an important distiction.
Worse, apparently reinstalling a game also charges the developer.
As many have discovered throughout the years, Companies don't need "trust" to be profitable
Ubisoft has been a laughing stock for a decade, EA still holds the record for lowest rated reddit comment (feel your pride and accomplishment), and "it just works" in Bethesda world
You know the game will run like ^$^@% for a while, if not for good.. You know the modders will fix it, and smart folks will wait for the sales on their titles, because by the time they go on sale, they'll be well supported by mods, and less buggy.
So.. I'd keep them clear of the other sleazoids ;).
Unity's clients aren't gamers, they're businesses
you'd have to be insane to build a business on unity now
The average person either doesn't know who they are or recognises them as the company that made some prior game they enjoy.
They should just cap their take at "up to 5% rev share". At least at that point there's no worry about runaway costs.
The problem for unity is that it costs a ton of money to develop the engine and not enough people pay them for it. Open sourcing the engine does not help with that problem and might even make it worse.
Do you have faith they know to monetize an open source engine? Wouldn't that actually expedite the fall in their case?
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(edit: and iOS! Lol I always forget mobile gaming is a thing. Facepalm.)
I can see them make it apple exclusive and more integrated to the apple ecosystem though.
But they already have their own Source game engine so no point in them doing that.