John Riccitiello probably saw the ire coming.
Mr. Riccitiello, a veteran of the video game industry, is the chief executive officer of Unity Technologies. Unity Technologies may not be a household name, but it’s an essential company for more than 2 million game developers who use their software to power their games.
For most of Unity’s 19-year history, its software business was relatively simple. All developers building software using Unity’s professional tools paid a fixed annual license fee. Software works like an engine. This is the underlying technology that developers use to build and run apps.
In mid-September, Mr. Riccitiello was suggested Sudden change. Instead of an annual fee, he wanted to charge developers a fee every time someone installed a copy of their game. This means that developers pay more as their title becomes more popular. This change in direction will be a big change for Unity, which has never made a profit.
But in an industry where gamers and small game development studios are reluctant to trust big companies and quickly resent the appearance of trying to shell out big bucks for them, the proposed fees are The changes are snowballing into a crisis.
Developers around the world who use Unity (including those behind hit games like Among Us and Slay the Spire) will see the new pricing model effectively wipe out their business if their games become too popular. They are threatening to withdraw from the platform as a possibility.
there was talk About a class action lawsuit. Someone went so far as to threaten Unity with calling federal law enforcement and requiring it to evacuate its San Francisco headquarters and offices in Austin, Texas, according to people familiar with the decision.
Developers said they felt betrayed. Many of us have spent years learning and coding in the specific programming language used in Unity called C# (pronounced “C-sharp”). Therefore, it was difficult to switch to a competitor. Developers complained that Unity executives were using their influence to push for digitalization. Looking for an apartment Action.
“They completely abandoned the creative, punk software developer community that was a big part of their continued success,” said Thomas Sala, an independent developer in Amsterdam. falconerBuilt with Unity.
The episode highlights the precarious position companies can be in when executives want to find ways to make more money while simultaneously trying to maintain the well-being of their communities.
Trip Hawkins, founder of video game giant Electronic Arts and an advisor to some game developers who use Unity, said the anger is understandable. He likened it to a hardware store selling a hammer and nails to a carpenter, then suddenly charging the carpenter for every nail he drove into the wall.
Hawkins, who left EA in 1994, said he was “finding out what people’s instincts feel is right and what feels wrong.”
Now, Riccitiello and his management team are scrambling to limit the impact. Unity has reversed some changes in a series of concessions aimed at placating developers.
Among other changes, the revenue threshold for games that charge per install will be increased, primarily to large developers, who will be charged a fee or 2.5% of their company’s monthly revenue. You can now pay for one or the other. lower. However, the company still plans to continue with the new pricing model.
In an interview with The New York Times, Riccitiello said he was “truly humbled” by the response and said he had spent the past two weeks talking with partners and indie developers. “He reminded us how fundamental Unity is to the developer community,” he said Riccitiello.
Unity’s engine is one of the few software development tool sets in the video game industry. Developers can use this tool to create 3D character models that can run, jump, and shoot enemies in-game. You can also use this software to design rich landscapes and textured environments. Every time your game launches, a software engine from Unity or another company runs underneath it.
Most of these engines charge companies that use their software a fixed amount per developer per year. Unity’s new pricing upends this predictability. Many developers felt that if their game became a hit, they would be punished and that Unity could make even more money.
“The new business model just doesn’t work for the rest of us,” said Sara, a game developer. “A lot of people feel we were just played.”
Unity was founded in Copenhagen in 2004 as a project of three developers who collaborated on an internet forum dedicated to coding. The premise was to “democratize” game coding tools, allowing anyone from high school hobbyists to professionals to build games from scratch.
“The key for me was the community and the resources around it,” says Will Todd, a 28-year-old developer. “If you go to the forums, you can get answers to your questions right away.” He and his partner in London indie studio Coal Supper, James Carbutt, used Unity to create a hit in 2019. I built the game “The Good Time Garden”.
Mr. Riccitiello resigned as chief executive officer of Electronic Arts in 2013 after facing criticism for poor performance. The following year, he joined Unity, when the company was relatively small.he brought be reputation For squeezing cash out of games in ways that sometimes angered developers and players.
Riccitiello uses Unity Successful initial public offering In 2020, the stock reached a high of around $200 by the end of 2021, but has since fallen to around $30. In its latest quarterly financial results, Unity reported revenue of $533 million. This was an 80% increase over the previous year, but the net loss was $193 million.Also fired Approximately 8% of employees as of May.
Unity is in the advertising business, allowing developers using its platform to insert ads into mobile games. This is the part of the business that accounts for about two-thirds of the company’s revenue. However, it is under pressure from changes to Apple’s software for mobile devices. limit data Unity’s system can collect from developers who use Unity to serve ads within mobile games.
Riccitiello told the Times that Unity’s software price changes have “nothing to do with” challenges to the company’s advertising business, which he said is healthy. He said the new model is “designed to be a fair and appropriate exchange of value” between Unity and its customers. In other words, Unity believes it can make much more money from its engine business than it currently does.
Behind the scenes, many employees were furious. According to three current and former employees, many of his Unity employees told management it was a bad idea and betrayed the small developers using Unity’s tools. As a result, several employees have left or are in the process of leaving the company, two people said.
In an interview, Riccitiello acknowledged that the new pricing model was poorly communicated and that some changes were needed. Mark Whitten, one of the company’s top executives, issued an apology. blog post.
However, the company has no intention of reversing the price changes.
It will take some time for Unity to know whether there is any permanent damage to its business. Sarah, developer of The Falconeer, said: upcoming matches is also built on Unity and said it will need support through software updates and expanded in-game content for at least two years. But after Unity made some concessions, Sara said they were welcome changes. He also notes that if he decides to switch to another engine, it could take months, if not years, to learn the software and reach the comfort level he had with Unity. I added.
Coal Supper Studio developer Karbutt said continuing to use Unity feels like an “operational risk.”
“They shattered trust with developers with this whole thing,” he said. “Irreparable damage has already been done.”