Unity Runtime Fee
Unity Technologies (via Rune Skovbo Johansen, Hacker News):
We are introducing a Unity Runtime Fee that is based upon each time a qualifying game is downloaded by an end user. We chose this because each time a game is downloaded, the Unity Runtime is also installed.
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We set high revenue and game install thresholds to avoid impacting those who have yet to find scale, meaning they don’t need to pay the fee until they have reached significant success.
Emanuel Maiberg (via Hacker News):
Unity announced the new plan in a post on its website, but more details emerged on Game Developer, a site catering to people working in the video game industry. The new fees are in addition to the annual cost of making commercial products with Unity, which are available at a few tiers between $2,000 and $5,000 per year. According to Game Developer, these new fees will be collected from game developers on a monthly basis, charging them between $0.01 to $0.20 per install, depending on how many copies they sold, in what region (emerging markets have lower fees), and what Unity plan the developer is paying for already.
The video game development community is still scrambling to unpack how Unity’s new pricing scheme will impact them, but some developers who spoke to 404 Media said that Unity’s changes are a “disaster” and that they are already eyeing open source alternatives for their next projects.
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However, new installs on new games will apparently impact game developers, forcing a new business model they didn’t prepare for when they initially published the games. Regardless of when a game was released, it’ll be subject to these new fees starting in 2024.
Even worse, Unity later clarified that it will charge developers for multiple installs by the same user. This creates a nightmare scenario for developers where disgruntled gamers could install, delete, and reinstall games as many times as they can stand just to inflict fees on developers they don’t like, a scary possibility in an industry where users are known to review bomb and send death threats to game developers.
Unity seems to be backtracking on this part and on charging for trial downloads. It’s not clear how the data will be collected or reported.
“Devs not on the hook for Game Pass” means that they expect Microsoft to be on the hook for it, right? How does that affect deals?
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My biggest Q: we’re not about to update our Unity build for existing games. So does this mean that older builds ALSO phone home for tracking?
They’re also introducing new DRM requirements for the editor:
Starting in November, Unity Personal users will get a new sign-in and online user experience. Users will need to be signed into the Hub with their Unity ID and connect to the internet to use Unity. If the internet connection is lost, users can continue using Unity for up to 3 days while offline.
Karol Severin (via Hacker News):
When it comes to ‘fair’, it usually depends on who you ask. From Unity’s (and likely its shareholders’) point of view, it has technically been subsidising developers’ work (i.e., operating at a substantial GAAP-basis loss) every year since inception (despite posting a profitable Q4 2022). In the current macroeconomic climate, money is expensive, and investors are increasingly looking for returns rather than non-profitable revenue growth. Unity was able to rely on the growth narrative of the overall games industry propelling it to a sweeter future, but of course, the games industry declined in 2022, so that ‘brighter future’ argument became a lot tougher to buy into.
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To be clear, this is not to say that the approx. $200 billion games industry is going away. But, the growth hey-day of the games industry is over, and consolidation in the developer and publisher landscape is inevitable.
It’s not the fact that Unity wants to make more money from its engine that has gotten people so up in arms about it, it’s the way it was structured.
If they simply took a percent of revenue, everyone would have shrugged, you might have had some indies complaining, and the world would have kept on turning. Instead, they made a couple of compounding missteps. An install based fee creates a massive amount of uncertainty about how much you will owe at the end of the month, creating potential cash flow issues. You are at the whims of Unity in terms of how they calculate it, and praying that they properly handle all the edge cases and potential abuses, despite all their incentives giving them plenty reasons not to care that much. And then on top of all of that they made it retroactive to all existing games on the market using their engine. Companies had a very reasonable expectation that they could rely on the terms their games were released under. All that trust has now been upended. Unity has shown they are willing to change terms retroactively with little notice.
Joe Wintergreen (via Hacker News):
So You’ve Decided To Move From Unity To Unreal Engine
Previously:
Update (2023-09-18): Vincent L. (via Hacker News):
Following the update to its pricing plan that charges developers for each game install, Unity has seemingly silently removed its GitHub repository that tracks any terms of service (ToS) changes the company made.
As discovered by a Reddit user, Unity has removed its GitHub repository that allows the public to track any changes made to the license agreements and has updated the ToS to remove a clause that lets developers use the terms from older versions of the game engine that their product shipped with.
Hein-Pieter van Braam (via Hacker News):
This price change has some particularly grave consequences on mobile where revenue per install is highly variable. According to Ironsource (A Unity company) for example, the average revenue per ad impression is $0.02. Unity would like to charge $0.20 per install after your app has made $200,000 over the past year. What this means is that every one of your users has to see at least 10 ads after installing your app to not have it cost you money. These numbers are averages. If your app is more popular in emerging markets then the revenue per ad would be significantly lower, making the problem far worse.
To make matters (even) worse, this change will be done retroactively on existing applications as well.
Petter Vilberg (via Hacker News):
So if it’s not even going to affect that many developers, what is Unity’s plan here? How does any of this make sense? Well, the answer is that Unity isn’t particularly interested in keeping developers of premium games as its customers, especially not small ones. In fact, Unity doesn’t really care. Indie developers are merely collateral damage to this change.
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Unity is not a game engine company that also provides operating services. It is a mobile F2P services company that also provides a game engine.
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They are going after the publishers of hugely profitable, long-lived mobile games, for whom their cost to Unity (in the form of license fees) in no way scales with their ongoing revenue. Even talking about pricing things “per install” is a thing that sounds outlandish in premium game development, but is normal language in mobile user acquisition.
The real gotcha in Unity’s announcement isn’t that you have to pay a fee per install of “Unity Runtime”, it’s the fact that you can get a “Fee reduction for use of Unity services”. If you’re a big company concerned about the install fee, just use Unity’s advertising and monetisation solutions, rather than third parties, and you’ll get away for cheap. This way you’ll either put money in the pockets of the engine branch by paying the install fee on millions of installs, or you’ll put money in the pockets of the services branch by using their services.
I don’t think a lot of users of the engine understand that Unity the engine company doesn’t exist anymore.
Last year Unity merged with IronSource, a mobile ad network, which is much more profitable than Unity. In a public company, the profit drives the business. The company that’s called Unity is in the business of selling ads and showing lots of them to people on phones. They own a game engine as a delivery vehicle for those ads.
There was an unsolicited competing bid from another ad peddler, AppLovin, who also wanted to buy Unity. I guess the optics with the IronSource deal looked better because it could be called a merger rather than a straight-up acquisition. But the end result is the same.
We have heard you. We apologize for the confusion and angst the runtime fee policy we announced on Tuesday caused. We are listening, talking to our team members, community, customers, and partners, and will be making changes to the policy. We will share an update in a couple of days. Thank you for your honest and critical feedback.
This lacks specifics and sounds like too little too late, though switching engines is not an easy thing.
Tom Francis (via Hacker News):
We chose Unity for Tactical Breach Wizards over 5 years ago. The deal was, it costs $125 per month per programmer, but that’s it – they take no share of your income when you release. Unreal, a rival engine, has no monthly fee but takes 5% of your revenue when you release. If Unity wanted any part of our revenue, whether percentage or per-install, we wouldn’t have used it – I had more experience in Game Maker, which takes no rev share and has a lower sub cost.
So now we’ve spent 5+ years investing in Unity on that understanding:
- All of our coding and implementation work (about 70% of my job, and all of my programmer’s job) is in Unity, and could not be pasted into some other engine – it would need to be redone.
- To be able to even do that productive work, I spent a ton of this time learning Unity.
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In case we were worried about how much we were investing, in 2019 Unity went out of their way to say, and cement in their Terms of Service, that “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.”
Update (2023-10-10): Ash Parrish:
The new plan is a drastic departure from what was initially announced. Now, users on the Unity Personal subscription plan will not be charged the new fee, and Unity will increase the revenue cap on games made with that plan to $200,000.
Furthermore, any game made with Unity that makes less than $1 million in 12 months will not be subject to the fee.
The company is also changing what games can be assessed with the new fee. Previously, the fee would have applied to all games that met the specific download and revenue thresholds. This applied to games both in development and released. Now Unity is saying that the fee will only apply to games made with the next version of Unity that is expected to launch sometime in 2024.
Boston Unity Group (via Hacker News):
It is with a heavy heart that we are announcing Wednesday, September 27th as the date of the final Boston Unity Group event.
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Over the past few years, Unity has unfortunately shifted its focus away from the games industry and away from supporting developer communities. Following the IPO, the company has seemingly put profit over all else, with several acquisitions and layoffs of core personnel. Many key systems that developers need are still left in a confusing and often incomplete state, with the messaging that advertising and revenue matter more to Unity than the functionality game developers care about.
Recently, Unity unveiled a set of unthinkably hostile terms of service and pricing changes for its users. The resounding, unequivocal condemnation from the games industry was unprecedented and Unity had no choice but to rescind some of the most egregious changes. Even with these new concessions, the revised pricing model disproportionately affects the success of indie studios in our community.
Dean Takahashi (via Hacker News):
John Riccitiello, CEO of Unity, has resigned from the company in the wake of a pricing controversy that left developers in open revolt.
Unity said in a press release that James M. Whitehurst has been appointed interim CEO and president of the company.
Update (2023-12-29): Cory Doctorow (via Damien Petrilli):
“Shared success” is code for, “If you use our tool to make money, we should make money too.” This is bullshit. It’s like saying, “We just want to find a way to share the success of the painters who use our brushes, so every time you sell a painting, we want to tax that sale.” Or “Every time you sell a house, the company that made the hammer gets to wet its beak.”
And note that they’re not talking about shared risk here – no one at Unity is saying, “If you try to make a game with our tools and you lose a million bucks, we’re on the hook for ten percent of your losses.” This isn’t partnership, it’s extortion.
How did a company like Unity – which became a market leader by making a tool that understood the needs of game developers and filled them – turn into a protection racket? One bad decision at a time. One rationalization and then another. Slowly, and then all at once.
Update (2024-02-01): Dare Obasanjo:
Unity is a great example of the collateral damage of Apple’s ATT changes. Their business model was to give away the tools then make money on an ad network.
Apple killed that dream so they tried to pivot to a per install fee and devs got so mad the CEO was fired. Now the company is just screwed and is flailing including laying off a quarter of staff.
However, this wouldn’t affect their non-iOS revenue.
