What you need to know
- Unity is a popular engine often used by smaller teams, owing to its oft-comparatively lower fees.
- Today, the firm announced that it will follow other engines in charging a runtime fee, starting January 1st, 2024.
- The fee could potentially impact installs made via services like Xbox Game Pass, hurting the viability of business deals around the platform.
- Read on for more details.
Unity is a popular game and app development platform, often touted for its cross-platform friendliness and accessibility for smaller teams. Unity has been at the forefront of independent development for some time, although a string of unpopular changes in the past couple of years have dramatically battered its image. The changes coincide with its public stock exchange listing, generally speaking, as it seeks to compete with Unreal Engine and others in an increasingly competitive, and volatile market.
Volatile indeed, as these recent changes to Unity’s revenue models threaten to upend entire businesses, and plunge projects into turmoil before they’ve even gotten off the ground.
Unity’s new model will see developers pay a monthly fee per installation after a certain threshold. The breakdown of the fees per revenue thresholds are as follows.
The per-install fees don’t seem to account for game usage time, and there’s no information on whether these metrics will factor in pirated copies as well. The per-installation fee also threatens charity services like Humble Bundle, free-to-play titles, or even Xbox Game Pass — where games are less likely to go on to generate ongoing revenue via in-app purchases. If someone downloads a title on Xbox Game Pass and tries it out for just 15 minutes, with no intention to purchase later or get invested, this has some dire potential ramifications for developers who take on the Xbox Game Pass model. Unity has yet to really clarify how the fees may or may not be waived in certain scenarios.
One developer remarked that some metrics could see Unity stand to profit from a freemium game more than developers of certain sizes.
> make a game> game is fremium> game makes 200k from in-app purchases after being installed 3 million times > now owe Unity 20c per 2.8M installs, $560K> that’s 360K more than we made https://t.co/6fe6Ob35OjSeptember 12, 2023
Another developer, Tomas Sala known for the excellent The Falconeer, also expressed concerns about Unity’s handling of this quite massive change. Games and projects that are currently in development will have not factored in the additional fees Unity plans to levy, throwing existing plans into turmoil.
What I also dislike also about this @unity debacle. I already committed to their engine for my new game. Put years and years of work into my pipeline. I did so under a simple per seat license I am happy to pay.Now while I am close to release they spring something new on me.…September 12, 2023
Unity as a business has not had many profitable quarters. For 2022, its operating income was negative one billion dollars, which is less than ideal by most metrics. In May of this year, Unity also announced it would commit to mass layoffs to reduce costs, shedding 6% of its global workforce. Unity’s share price is down 55% since its initial public offering, and down 10% for this year alone, as the platform continues to seek consistent profitability.
Disunity
Unity’s freemium model gave it a competitive advantage over Unreal Engine, which operates some similar fees for game developers using its platform. With that advantage being eroded, it remains to be seen if developers pack up and move to greener pastures. It also remains to be seen how it could impact deals for subscription services like Xbox Game Pass or PlayStation Plus, which often feature Unity-made independent games from smaller teams, often at lower prices.
Unity’s fees eating into the margins may make certain ventures increasingly unviable, in what is proving to be a particularly strange, volatile market. 2023 has seen studio closures and layoffs a’ plenty, as consumers feel the pinch of inflation and increased prices around the world. Unity is potentially playing a dangerous game here, but it remains to be seen what impact this could have at scale, once it rolls out.
