A fresh report into Unity’s hugely-controversial decision to start charging developers when their games are downloaded has thrown fresh light on the situation.
MobileGamer sources say Unity has already offered some studios a 100% fee waiver - if they switch over to Unity’s own LevelPlay ad platform.
The report quotes industry consultants that say this move is an “attempt to destroy” Unity’s main competitior in this field: AppLovin.
I’m pretty sure that when Unity was headquartered in Denmark it made a profit. But I may be mistaken, because it was hyped as a danish enterprise success.
When they changed the license to be more Indie friendly a few years back, that too was hyped as a huge success.
But I can see on Wikipedia that Unity Software Inc. has a negative net income of $921 million on revenue of $1.4 billion.
That’s an insane loss, meaning that they basically operate at 50% loss! How or Why they ended up that badly is beyond me. It’s so bad it smells like something is not quite right with those numbers.
I took a look at some of their investor reports while trying to explain this earlier but couldn’t make heads or tails of what was additive and what was descriptive.
But at a high level: It is very believable
Let’s take a step back for a moment and look at nVidia. It is a VERY common statement (I think even Jensen has said it?) that nVidia is not a hardware company: They are a software company. They spend a LOT of money on Solution Architects/Engineers which are basically people that you buy the time of when you make a large order. They work with you to make your code more performant on nVidia hardware and are why so many games (and everything else) blazes on nVidia but struggles on AMD (less so these days) and Intel (ha!).
I believe Epic does the same with the Unreal Engine
And, presumably, Unity does the same for Unity.
And those people are pretty well paid and only have so many cycles per day. That drastically increases your Sales/Marketing department cost but is pretty much a necessity to function in a market dominated by… the companies who have been doing that for decades.
And then you just have product development. A LOT of money is thrown in to trying to make the next Nanite or whatever in an attempt to distinguish your engine and get market share when the next wave of games release… two or three years later. Which is the other issue. Every expenditure is about making profit 1-16 quarters later.
Another aspect people don’t really understand: The major middleware/hardware companies always have their eyes out for new tech. And it is not at all uncommon to give a professor (or even a grad student) a giant sack of cash to work for the company for a year or two to implement feature X. Which is in addition to the army of Software Engineers who make feature X stable and performant.
I wasn’t talking about whether they have expenses, If I recall correctly they have about 7000+ employees.
Generally that kind of company only collaborate on huge projects, smaller projects don’t get that level of service, bust are generally referred to a developer forum, where their questions may be answered by in-house personel. This is as I understand it common, but I’m not a pro gaming programmer, although I used to know a few decades ago.
Fun fact, the story now is that it was a Unity employee who made the death threat!?
It was a private company back then so I don’t think there is financial info available. But at least it seems that the reports they filed for IPO indicated they had made loss for a few years prior.