In case anyone is interested in my opinion on the whole Unity situation (I guess I need to state that I am a biased source since I have an interest in unity not doing well because I make tutorials on using competing products).
Even with Unity reversing the fee disaster (www.theverge.com/2023/9/22/23882768/unity-new-pric…) and basically charging 2.5% of a game's revenue I think Unity is going to struggle quite substantially long term.
Since Unity went public in 2020 they pursued an aggressively expansionary strategy with revenue growth between 25% and 48% per year. At the moment Unity has a revenue of half a billion dollars. The issue is that profits did not keep up with that growth. Not even close: In their Q2 2023 shareholder report they list a loss of 193 million and that they would lay of 8% of the workforce. They also lost equal amounts in earlier periods.
My guess is that the original plan was for Unity to become the default game engine for anyone but the largest AAA studios (who'd have their own engines or work with Unreal) and eventually grow into becoming profitable by being ubiquitous. Adobe did that strategy really well: If you want to do any creative work for business you will use Photoshop/Premiere Pro/Illustrator etc not necessarily because these are the best tools but because literally everyone is using them.
This is the context that is crucial to understand why Unity did the fee change in the first place, their company is wildly unprofitable. What makes things even worse is that there doesn't seem to be an easy path to profitability. Since Unity adjusted their fees they can be certain that they won't see significant improvements from that. Since they merged with ironSource they could also offer more stuff for in-game purchases but I don't see that making the big bucks. On top of that, given how much trust and goodwill they lost - on top of competitors like Godot gaining a lot of extra funding and interest - I think that unity will have a really hard time to attract new developers or even keep existing ones.
Just place yourself in the position of the CEO: Your company has lost hundreds of millions, you laid off nearly a tenth of the workforce and the strategy to become profitable has failed unimaginably hard. What do you do? My guess is that they won't touch the fees for a while which means that they either try to get into other money making ventures (in-game purchases, asset stores etc) or cut down on Unity development (high end devs are really expensive). No idea how any of that could generate the amount of money they would need.
From a unity user perspective this is quite rough: There is a non-zero chance that unity goes bankrupt (although this is very unlikely) or that it is forced into unpopular strategies again. I would not be surprised if they try again to mess with the fees in a few years or that they slow down engine development considerably, i.e. fire people.
In comparison, unreal is known as being the premium option that is becoming really popular with AAA studios (CD Project red switched to it for their upcoming games) and their parent company has enough money from Fortnite to be very flexible. Godot, on the other hand, is completely free but gets money from sponsors and the community via donations. Their income from that has doubled in September from 25k to 50k and they also get grands and they have an army of volunteers that basically work for free. Basically every competitor to Unity won with Godot being the main beneficiary (double the income, lots more people working on the engine, grants etc).
That got a bit longer than expected, I am on a boring train ride :D Hope it wasn't too biased in favour of Godot, would be interesting to hear what you guys think about the future of Unity!
Clear Code
In case anyone is interested in my opinion on the whole Unity situation (I guess I need to state that I am a biased source since I have an interest in unity not doing well because I make tutorials on using competing products).
Even with Unity reversing the fee disaster (www.theverge.com/2023/9/22/23882768/unity-new-pric…) and basically charging 2.5% of a game's revenue I think Unity is going to struggle quite substantially long term.
Since Unity went public in 2020 they pursued an aggressively expansionary strategy with revenue growth between 25% and 48% per year. At the moment Unity has a revenue of half a billion dollars. The issue is that profits did not keep up with that growth. Not even close: In their Q2 2023 shareholder report they list a loss of 193 million and that they would lay of 8% of the workforce. They also lost equal amounts in earlier periods.
My guess is that the original plan was for Unity to become the default game engine for anyone but the largest AAA studios (who'd have their own engines or work with Unreal) and eventually grow into becoming profitable by being ubiquitous. Adobe did that strategy really well: If you want to do any creative work for business you will use Photoshop/Premiere Pro/Illustrator etc not necessarily because these are the best tools but because literally everyone is using them.
This is the context that is crucial to understand why Unity did the fee change in the first place, their company is wildly unprofitable. What makes things even worse is that there doesn't seem to be an easy path to profitability. Since Unity adjusted their fees they can be certain that they won't see significant improvements from that. Since they merged with ironSource they could also offer more stuff for in-game purchases but I don't see that making the big bucks. On top of that, given how much trust and goodwill they lost - on top of competitors like Godot gaining a lot of extra funding and interest - I think that unity will have a really hard time to attract new developers or even keep existing ones.
Just place yourself in the position of the CEO: Your company has lost hundreds of millions, you laid off nearly a tenth of the workforce and the strategy to become profitable has failed unimaginably hard. What do you do? My guess is that they won't touch the fees for a while which means that they either try to get into other money making ventures (in-game purchases, asset stores etc) or cut down on Unity development (high end devs are really expensive). No idea how any of that could generate the amount of money they would need.
From a unity user perspective this is quite rough: There is a non-zero chance that unity goes bankrupt (although this is very unlikely) or that it is forced into unpopular strategies again. I would not be surprised if they try again to mess with the fees in a few years or that they slow down engine development considerably, i.e. fire people.
In comparison, unreal is known as being the premium option that is becoming really popular with AAA studios (CD Project red switched to it for their upcoming games) and their parent company has enough money from Fortnite to be very flexible. Godot, on the other hand, is completely free but gets money from sponsors and the community via donations. Their income from that has doubled in September from 25k to 50k and they also get grands and they have an army of volunteers that basically work for free. Basically every competitor to Unity won with Godot being the main beneficiary (double the income, lots more people working on the engine, grants etc).
That got a bit longer than expected, I am on a boring train ride :D
Hope it wasn't too biased in favour of Godot, would be interesting to hear what you guys think about the future of Unity!
sources:
unity revenue growth: www.macrotrends.net/stocks/charts/U/unity-software…
shareholder report: s26.q4cdn.com/977690160/files/doc_financials/2023/…
unity job cuts: www.cnbc.com/2023/05/03/unity-layoffs-company-to-c…
1 year ago | [YT] | 345