It’s been a bad run of weeks lately for the company behind game engine Unity, stemming from a ham-fisted plan to drastically alter its pricing model for developers. When that plan was announced, which involved previously free tiers of the engine going away or being changed, per-install fees to developers that could essentially bankrupt a successful game company if it charged too little for games, and other concerns, the backlash from the dev community was swift and severe. Plenty of developers swore off the platform entirely, while others talked about how the trust between the company and the dev community had been shattered. Obviously when things go that poorly, heads are going to roll.
Earlier this week, Unity CEO John Riccitiello announced his resignation as CEO and Chairman effective immediately. Precisely how voluntary that resignation actually was is anyone’s guess, but we can at least be confident that Unity was hoping that the news would be well received by developers and that trust could start to be rebuilt between both sides of the equation. And, on the first of those points at least, it certainly worked, as developers reacted positively to the news.
“Long, long overdue,” Gloomwood developer Dillon Rogers wrote, summing up joyful reactions to Riccitiello’s departure from across the game development community.
Necrosoft Games’ Brandon Sheffield (Demonschool), who was one of the most outspoken critics of Unity’s initial install-fee plans, wrote on social media that he “truly did not think [Riccitiello’s departure] would happen.” The CEO’s apparent ouster “is the main thing Unity needed to do to start rebuilding trust, so… it’s a start,” Sheffield continued.
There’s more like that from other developers, but please note that that’s about as positive as it gets from the dev community. What you’re not seeing is any developers suggesting that Riccitiello’s exit fixes all of Unity’s problems, nor that the trust between it and the developers has been repaired. In fact, many developers are saying the exact opposite, pointing out that the CEO may be gone, but many of the influential voices that caused this whole fiasco still remain.
And sometimes that is put in quite colorful terms.
Other developers see Riccitiello leaving as positive but insufficient as long as the Unity board members who also approved these business changes are still at the company. “The position was completely untenable and I hope everyone in the c-suite and on the board who were advocating for install fees have the wherewithal and grace to step down,” indie developer Leena van Deventer (Dead Static Drive) wrote. “There’s no path forward without removing everyone who had anything to do with it.”
“John Riccitiello sucks ass, but it’s also worth noting that Unity went public and now has a board of stakeholders who also seem to suck ass,” indie developer Dan Pearce (10 Second Ninja X) wrote. “Unless you see meaningful, long-term effort to nurture developers and rebuild trust, then it’s still worth keeping one eye on the door.”
Everyone “sucking ass” is not exactly an indicator that the door is open to rebuilding trust unless more changes are made. That being said, it was time for the CEO to go, so this is at least one good baby step in the direction of Unity making it as a platform. But it’s also the easiest of the steps to take.
Now the real work begins, with the platform having to demonstrate through actions, not words, that it will actually listen to its own customers.
Hoo-boy, if you pay even mild attention to the video game industry, you’re already going to be aware of the complete shitshow famed game-engine Unity has on its hands right now. By way of throat-clearing, you need to know how Unity got to where it is to understand what’s happening now. The game engine has enjoyed a successful rise in adoption and popularity in no small part because developers, regardless of size, could produce games based on subscription tiers without having to worry about or project just how successful those games would be. In fact, CEO John Riccitiello made some explicit comments as to the business model and why it was so great for smaller developers.
“There’s no royalties, no fucking around,” Unity CEO John Riccitiello memorably told GamesIndustry.biz when rolling out the free Personal tier in 2015. “We’re not nickel-and-diming people, and we’re not charging them a royalty. When we say it’s free, it’s free.”
This was a major differentiator from other game engines, such as Unreal, where subscriptions weren’t a thing at all, but royalties for games were. It was a major draw for Unity, particularly for, but not only for, smaller developers.
Well, that all changed recently. Unity unveiled its new business model and pricing plans and they are designed to milk money from developers, particularly smaller developers using the lower-tiered subscriptions for the engine, not for every copy of the game sold, like a royalty, but for every unique install.
The newly introduced Unity Runtime Fee—which will go into effect on January 1, 2024—will impose different per-install costs based on the company’s different subscription tiers. Those on the Unity Personal tier (which includes free basic Editor access) will be charged $0.20 per install after an individual game reaches $200,000 in annual revenue and 200,000 lifetime installs.
Users of Unity’s Pro and Enterprise tiers (which charge a separate annual subscription for access to a more full-featured Unity Editor) will pay slightly smaller per-install fees starting at $0.125 to $0.15 after a game reaches $1 million in annual revenue and 1 million total installs. The per-install fees for the paid subscription tiers are also subject to “volume discounts” for heavily installed games, going down as low as $0.01 per install for games that are installed 1 million times per month.
All of the sudden, once the threshholds are met, developers are essentially being punished every time a game is installed by being hit with a non-royalty royalty. Oh, and the pricing changes are retroactive, meaning that if you built and sold a game based on the old pricing model, it gets ported into this new model. It’s actually worse than a royalty, as several game developers have explained.
Beyond anger over retroactive changes, many developers also see the potential for player abuse and mischief in a world of “per-install” fees. Groups of gamers who are already liable to “review bomb” games they don’t like could theoretically start “install bombing” Unity games by repeatedly installing and deleting a game, costing the developer money with each new install. Pirated copies could also be included in the fee calculations, imposing a direct cost for illicit downloads that don’t provide any revenue for the developer.
Unity initially told Axios’ Stephen Totilo that the “per-install” fee applies even if a single user deleted and re-installed a game or installed it on two devices. A few hours later, though, Totilo reported that Unity had “regrouped” and decided to only charge developers for a user’s initial installation of a game on a single device (but an initial installation on a secondary device—such as a Steam Deck—would still count as a second install).
Sheffield points out that a success story like Vampire Survivors—which leveraged a 99-cent price to help achieve viral liftoff—would be much harder to pull off under the new Unity structure.
“Imagine releasing a game for 99 cents under the personal plan, where Steam takes 30% off the top for their platform fee, and then Unity takes 20 cents per install, and now you’re making a maximum of 46 cents on the dollar,” Sheffield wrote. “As a developer who starts a game under the personal plan, because you’re not sure how well it’ll do, you’re punished, astoundingly so, for being a breakout success.”
When it comes to all of this being retroactive to already released games, Unity may have a problem on its hands. While the company is claiming that it’s Terms of Service allow it to change the fee structure however it wants at any time, the company said the exact opposite, publicly, a few years ago.
That change in developer expectations is especially galling in light of a 2019 Unity blog post in which the company seemingly pledged that any changes to its Terms of Service would not apply retroactively to games made on older versions of the engine. “When you obtain a version of Unity and don’t upgrade your project, we think you should be able to stick to that version of the TOS,” the company wrote at the time.
Developers are pissed and it’s not difficult to understand why that would be. This is throwing every developer that built their games on Unity into chaos, wondering what fees they will be hit with, when they will be hit with them, with many of them either praying there aren’t more sales of their games or actively telling the public not to by them.
Some developers are going so far as to urge players not to install their games in light of the new fee. “Everyone buy Venba. But don’t install it,” developer Abhi wrote of his delightful cooking-based narrative game. “Come to my house and you can play it on my pc. I’ll serve Idli or Dosa for lunch.”
And angry developers and a completely broken system of trust isn’t the only trouble Unity is having as a result of all of this. It hasn’t escaped the industry’s attention that several Unity executives had the foresight to sell off a not-insignificant amount of the company’s stock just before this new pricing plan was announced.
According to Guru Focus, Unity CEO John Riccitiello, one of the highest-paid bosses in gaming, sold 2,000 Unity shares on September 6, a week prior to its September 12 announcement. Guru Focus notes that this follows a trend, reporting that Riccitiello has sold a total of 50,610 shares this year, and purchased none.
Riccitiello isn’t the only executive at Unity to sell a bunch of stock the week before the company’s Runtime Fee announcement. According to Unity’s market activity on the Nasdaq, several other Unity board members sold significant numbers of shares leading up to its “plan pricing and packaging updates.” Chief among them being Tomer Bar-Zeev, Unity’s president of growth, who sold 37,500 shares on September 1 for roughly $1,406,250, and board director Shlomo Dovrat, who sold 68,454 shares on August 30 for around $2,576,608.
Is any of this illegal? I have no idea, but I sure as shit wouldn’t be surprised to read in the coming days that the SEC would begin looking into all of this trade activity to see if any of it was undertaken in coordination with the business model change. And even if it’s not illegal, it sure is an awful look for the company. The feedback on the new pricing plan has been almost universally and angrily derided by the company’s customers and just before that predictably happened a bunch of execs sold off their stock. Stock that, as it happens, had been up nearly 40% year to date, only to suffer a 7% dip this past week. How convenient.
And that is all separate from Unity having to close two of its offices this week after threats were made to employee safety by what appears to be an out-of-state worker. Did this have anything to do with the new pricing plan? Who knows, but once again, the timing is convenient.
At the very least, Unity is having itself a very bad week. And the reasons for that are obvious. Surprise announcements of new pricing models that completely upend its customer base, the strong-arming pointing to a ToS to force older games into the new model with no heads up to previous customers that it was coming, all culminating in this breaking the promises the CEO previously made while that same CEO and other executives are making bank on stock sales leading up the announcement, and it’s obvious why developers are saying that there is zero trust in Unity moving forward.
Garry Newman, creator of Garry’s Mod and the Unity-based Rust, also announced Wednesday that “Rust 2 definitely won’t be a Unity game,” because “Unity has shown its power. We can see what they can and are willing to do. You can’t un-ring that bell… The trust is gone.”
And it’s unlikely to ever be regained. Bang up job all around.
After last year’s Spore DRM fiasco, EA and its CEO John Riccitiello seem to have learned that the stick approach to dealing with pirates backfired badly, and it was time to try out the carrot. It started, earlier this year with Riccitiello talking about how they were trying to view pirated software as a really good demo product, with the impetus then being on them to convert those users into paying customers. Later, they started actively embracing the claim that their pirated software could lead to additional sales of in-game content and offerings. The latest, as sent in by william, again has Riccitiello in an interview saying that he now sees “pirates” as a new marketplace, again with the emphasis being on how it’s EA’s responsibility to give those users something to buy. He still says that he wants people to buy the legit versions of the game, and he thinks it’s very wrong to make an unauthorized copy, but he says that reality dictates that they should embrace those users, rather than attack them, and look for ways to make money off of them:
“There’s a sizable pirate market and a sizable second sale market and we want to try to generate revenue in that marketplace.”
Furthermore, he notes that this approach seems a lot more reasonable than the music industry’s approach of just trying to punish people:
He said the music industry erred in “demonizing” its consumers rather than reacting to them. He believes that EA has an obligation to make it enticing for people to play games legitimately. And he hopes that services such as EA Sports’ community hub or the BioWare social site that hooks into Dragon Age will make it so alluring that it will be “increasingly less likely that people will pirate because there is so much value on the other side of the door.”
None of this necessarily addresses some of EA’s past sins relating to aggressive use of DRM, but it does suggest that Riccitiello (or at least his savvy PR staff) have recognized that giving people a reason to buy is a better way forward than trying to attack those who use unauthorized copies of the games.
Could it be that EA is actually figuring this stuff out? It’s been one of the most maligned video game companies when it came to mistreating fans with things like draconian DRM — but perhaps that’s changing. Earlier this month we quoted EA’s CEO, John Riccitiello, putting a positive spin on the fact that people had downloaded and shared unauthorized copies of The Sims 3, finally recognizing that it was like a demo version of the game. Reader Jim alerts us to the news that Riccitiello was apparently so happy with the response to The Sims 3 sharing, he’s now going even further, telling people to “please pirate our games”:
“By the way, if there are any pirates you’re writing for, please encourage them to pirate FIFA Online, NBA Street Online, Battleforge, Battlefield Heroes… if they would just pirate lots of it I’d love them.”
It’s not clear Riccitiello is totally comfortable saying these things. As with the quotes earlier this month, you sorta get the feeling that there’s a lot of nervous laughter around the quotes — but at least he’s trying. And part of it is because EA is, in fact, putting in place smarter business models, such that unauthorized downloads can actually lead to more sales:
“Because what’s in the middle of the game is an opportunity to buy stuff. I increasingly believe that’s the way the market’s going because that’s how the consumer wants to consume. And by the way, [regarding] my competitor, do you think Blizzard gets upset when someone pirates a disc of one of their online games? While we don’t want to see people pirate Warhammer Online, if they’re going to give us a year’s subscription it’s not exactly a total loss.”
Indeed. He’s getting there. If the real opportunities to make money are from buying stuff within the game, then you want the game itself to be as widely spread as possible…
