Unity annoys entire games industry with destructive price plan: Video Games Industry Memo, 14/09/2023
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The big read - Unity annoys entire games industry with new pricing structure
It’s been a while since the games industry had a good self-inflicted “put the spade away, lads” drama to really annoyed about. But, oh boy, have we got an excellent one for you to enjoy this week.
Unity, the company responsible for one of the biggest games engines used to make and scale video games, announced a change to its pricing structure that achieved the unenviable double whammy of annoying both its customers and the wider games ecosystem - putting it firmly in the line of fire.
Democratising development
For pretty much all of its history, and with a handful of exemptions such as parts of its pay-to-play asset store, Unity has used a classic software-as-a-service business model that kept its user base broadly happy.
Developers who were just starting out in game development have been able to access Unity and its suite of development and monetisation services for free, provided that they don’t earn more than $100,000 and agree to some Ts&Cs like displaying a ‘Made in Unity’ splash screen on their products.
But if they cross the $100k mark, developers have either had to pay for a ‘plus’ programme at a rate of about $40 a month until they earned $200,000 and then $185 a month once above it.
This model, for the most part, worked effectively for Unity. It meant that it’s comparatively accessible toolset felt reasonably priced for its audience - which includes a hefty contingent of independent game developers and mobile games companies - and helped it to hoover up approximately 30% of the market.
Unity, however, has moved to break with that model. On Tuesday 12th September, the company released a blog to say it was instituting a new install based Runtime Fee on top of its existing subscriptions if a game hit a certain commercial or install threshold from January 2024.
For smaller developers, that amounts to a starting charge of $0.20 per install if a game hits either $200,000 in revenue or 200,000 installs within a 12 month period.
And for larger companies using its newly named pro tier, Unity says they will have to pay a downwardly sliding $0.15 per install after crossing either the million dollar or million install mark in a year.
All these changes were made without communication or consultation with industry. And, well, can you guess what happened?
New Model Barmy
If you guessed “caused an immediate shit-storm”, then congratulations! The announcement sparked an immediate and ferocious backlash from developers, who were immediately resistant to Unity’s proposal and described it in some quarters as a bait and switch. Ouch.
In particular, the decision drew resistance for a couple of reasons. At a micro level, developers are livid because they feel they have been blindsided by the addition of a new development cost without due process or respect to their ongoing arrangements with Unity.
While the cost sounds on paper to be low, the ability for the cost to scale as considerably as $1,500-$2,000 per 10,000 installs - a relatively small number in the context of games accruing downloads relatively speedily in a three billion strong consumer market - has spooked Unity developers from an impressively wide range of backgrounds.
This includes independent developers such as Tom Vian of SFB Games, who expressed concern that the new charges clashed with the company’s careful budgeting for its self-published titles. It also included Sergio Veranda, Senior Vice Executive President at MiniClip, who showed how the new tithe could essentially make free-to-play hyper-casual games - simple one mechanic experiences funded by advertising - commercially impossible to succeed with.
And while hyper-casual might be particularly affected, the issues Veranda identified were indicative of developers wider concerns about the impact it could have on the industry at a macro level.
This included its possible impact on specific economic models (such as lower value subscription installs), on games growing in developing markets (such as South East Asia) and whether it could account for industry tactical questions (ranging from whether there would be exemptions for demos or charity games and whether it would count fraudulent installs).
While Unity took to its comms channels to try to answer these questions, it was clear that it couldn’t reassure developers for one simple reason: it couldn’t provide a transparent explanation of how it plans to count installs citing proprietary reasons.
This turned an already unpopular decision into one that is attracting outright derision from industry figures - obliterating industry confidence in Unity along the way.
Reverse ferret?
So, will Unity change course? For now, it is holding fire and praying that its comms team can dig it out of the hole it has made for itself.
It has released a rather short - and frankly - brusque response to the crisis on its forum that has taken a ‘most of you are fine, what are you complaining about’. It’s an approach drawn from the same school of thought as the UK Government’s plan for dealing with the presence of crumbly concrete in schools and we think it’ll hold up just as well as that did.
However, the speed with which public figures and company comms have claimed that charity bundles, demos and fraudulent installs will not be counted by the system - irrespective of the technical challenges in doing so that Unity has chosen to ignore - suggests it could move quickly to back down.
Ultimately though. irrespective of whether it reverses course or not, Unity has fallen into a trap of its own making.
By eroding trust between itself and its development community over the course of a number of years including through poorly consulted price hikes, it has lost its reputation as a pillar of the games community.
Instead, the company is now seen as one in ever desperate pursuit of the stated mission of “we want more money”, as one unfortunate spokesperson said out loud in an interview earlier this week when trailing the policy change.
I mean, hey, who doesn’t? But when a business forgets who has made its fortunes, it will more often than not run into serious trouble. And with Unity now on the receiving end of stinging attacks and promises to abandon the service from some of its biggest success stories, it must decide quickly whether the short term cash grab is worth blowing the last parts of its long-won, but increasingly fragile, reputation.
News in brief
Get into Gearbox - Embracer Group is reportedly considering selling off Gearbox Software, creators of the Borderland series, as it continues to reel from its failed effort to receive a multi-billion dollar cash injection from Saudi Arabian publisher Savvy Games. Tiny violins at the ready…
EU-bisoft questions - Reuters reports that the European Commission is seeking feedback on Microsoft’s decision to flog distribution rights for its cloud-gaming service to Ubisoft as part of its ongoing efforts to push through its acquisition of Activision Blizzard. It’s unlikely to spark a fresh investigation but it is nevertheless something worth watching.
Forsaken? - Square Enix’s prospects for long term growth look weak, according to Bloomberg. It has an extensive, and pessimistic, report on the company’s economic prospects citing poor quality new releases, underperforming legacy franchises and scraps between production teams as reasons to feel woeful.
Vamos a la Playables - PG Biz reports that YouTube’s Playables programme, which will allow people to play games on the platform via a browser or mobile app, has gone into a phase of public experimentation. Google Stadia is dead; long live Google Stadia.
E-See ya? - US video game trade body The Enterainment Software Association (ESA) and games event organiser Reedpop have parted ways over the organisation of next year’s E3, casting further doubt on the future of the event. While ESA has said it plans to deliver a show next year, the loss of its space at the LA Convention Center suggests the long-troubled event is on the rocks.
Ins and outs
Louise Blain has become the creative lead of the games division for noted TV and film horror peddlers Blumhouse…Donald Mustard is leaving his post as Chief Creative Officer at Epic Games to spend time with the family…Johannes Mang is taking the lead at Rovio Stockholm.
Events and conferences
Tokyo Game Show, Tokyo - September 21st - September 24th
EGX, London - October 12th - October 15th
GamesAid Gala Dinner, London - October 17th
Scottish Games Week, Multiple locations - 30th October - 3rd November
Paris Games Week, Paris - 1st November - 5th November
Games to watch this week
Monster Hunter Now - Niantic’s latest outdoors ’em-up aims to be a marriage made in heaven with monster-slaying Capcom IP.
Pokémon Scarlet And Violet: The Hidden Treasure Of Area Zero – The Teal Mask - First part of DLC has almost as much content as it has sub-headings in the title.
Dune: Spice Wars - New Funcom strategy game set on Arrakis hopes to be more Denis Villeneuve and less David Bowie.
Ad Infinitum - WW1 tinged horror title has us reaching strongly to “press F to nope”.
Gunbrella - New Devolver release that has the most delightfully ‘90s throwback manual that you could possible imagine.
Before you go…
A Pokemon Red speedrunner has retired because they think their recent record-breaking run is too good for them to break.
Don’t drop your crown on the way out, (Nido)king.
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