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.

The unity devs at my last game were constantly providing feedback and fixes to Unity. That’s a lost resource I haven’t seen anyone mention.

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.

> 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.

I'm not a gamedev, but I am hoping one of the actionable things from this situation is a call to action from the gaming community to put together more open-source game engine platforms, and for them to be more easily sharable.

I am sure there are reasons this is difficult, but with so many industries built on open-source compliant tools, gamedev feels like a no-brainer for it as well.

Unreal is virtually open-source anyway, it doesn't make any sense for anyone to invest the billions of dollars you need to even come close to it.

And so far as I’m aware Epic is pretty dev friendly.

> they'll remain a relevant game engine

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.

This is exactly what’s happening. Studios’ strategies are moving off of Unity. None of the ones I know are going to do any further development in the engine on any future projects. One studio is rewriting their game right now to run on Godot. It’s been the biggest exodus I’ve ever seen.

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.

At least with revenue share the amount you owe is bounded by the revenue you've realized from sales.

If we are being real, and not assuming abuse, at ~$5 or up, you are going to be better off at .20 install than 5% of revenue.

$0.20 is the minimum, you pay for every device they install on every time. Anytime they offload and reinstall, you pay again. Every additional device, upgrade, or replacement, you pay again. You’ll also pay then current rates, whatever Unity decides those are.

No abuse needed to lose money with this, I’ve probably installed the same games 20+ times over the years.

That's not what Unity is saying - they are saying reinstalls do not count. From their faq:

Does a reinstall of an app on the same device count towards the Unity Runtime Fee?

No, we are not going to charge a fee for reinstalls.

https://unity.com/pricing-updates

That's a change from what they said before for one, but there's also no real way to accurately measure "installs" anyway at a technical level.

They can probably track accurately enough to identify that 90% of games aren't worth billing. Then once they are working with the top 10%, they can negotiate something that makes sense, like submit your monthly sales number, and Unity will use that as a limit on install count.

I agree what they are saying isn't workable, but that idea of install based fee could work, and would be better than a royalty for many.

> on the same device

This is the issue.

The problem with install fees is that it's a potentially unlimited financial risk.

Not unless you are giving away your game for free. Otherwise your limit is some small multiple of sales. They have said demos don't count, webgl doesn't count, piracy doesn't count, etc..

It would be easier if Unity just said they won't charge for installs past the number of sales. But most of the nightmare scenarios people are coming up with are not real.

Unity has been very inconsistent about communicating what will and will not be counted. I've seen two different channels from Unity saying that demos will or won't be counted. And practically, Unity has no way to verify what is and isn't a fraudulent installation (or if they do, they're not telling us). Imagine the pain in the ass it's going to be too contest this bullshit. And the risk remains unlimited because installs on new machines count.

Ultimately the main issue is that people made business decisions about using Unity under the assumption that the license and payment structure they were using could not change. That is no longer true by demonstration. I'm sure there's a lot of devs who are simply unwilling to deal with a vendor who changes the terms like this.

IMO the problem is more the arbitrariness of the change than the specific fee structure. It applies to games that are already in development, it applies to games that already shipped. Even if it's strictly legal to pull that rug (I have my doubts), no one wants to build a business at another company's whim. Everyone is wondering if Unity just turned X% of their customers into sharecroppers, who's the next Y%? For indies that will be an especially acute concern since they have very little leverage.

Better fixes in no particular order: a grandfather clause, delay the new fees, fire the CEO.

Would it be any better of it there was retroactive revenue share? I agree it is shittily rolled out, but things like the retroactivity are the issue, and the ability to actually count install. Not the install fee itself. I am responding to the "it should have been rev share" mentality, which is totally grass is greener.

Right, I'm in agreement. I didn't downvote you.

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.

I wonder what they are thinking in making this move then. Someone mentioned Genshin as the big legacy customer and someone answered on why it doesn't make sense. So why do they think this is a good move? Is there really enough profit to be made off legacy customers?

The license pre-October 2022 actually explicitly allows you to continue using older versions of the software under the original licensing terms when you released back then. So there is no money in legacy customers, except Genshin-scale ones. And I doubt those guys are paying up anyway.

That's even weirder then. Is it like when Blizzard decided they wished they had owned DotA money and enforced new ownership rules for mods for their new games but ended up just getting bad press?

> There's just no way this change is actually gonna happen.

You under-estimate the degree to which companies can be driven by an exec determined to have their way.

Unity want a cut of Genshin Impact and see everyone else as a rounding error.

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.

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.)

> 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.

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.

they really always have been when you think about it. shame about the engine being a causality of war

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.

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.

Unity does make games, but they are codeveloped with external studios and not branded as being made by Unity.

There was a fear in upper management of labeling these projects as having been made by Unity because customers might perceive Unity as competing with them.

These services are still referenced obliquely on Unity’s public website: https://unity.com/solutions/accelerate-solutions-games (check the FAQ for a question about IP ownership with Unity doing “full development”)

While $340 million is nothing to sneeze at it would only make up 18% of Unity’s revenue if that’s what they’d make off of ads.

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.

The $340 million is from the last quarter, you were probably looking at yearly revenue.

I was looking at yearly revenue and I assumed you were talking about yearly revenue as well, point taken.

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.

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?

> 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.

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.

Definitely: the kind of people on corporate boards are definitely looking for candidates like themselves. The rest of us should factor that in to decisions and avoid being dependent on companies with warning signs like this unless it’s something easily replaced.

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.