One year after increasing the costs of its enterprise and professional editions of its game engine, Unity implemented a new fee structure for smaller developers that exceed certain benchmarks for income and installs.
Any game that has surpassed a revenue and lifetime install threshold in the previous 12 months will be subject to a Unity Runtime Fee beginning January 1, 2024. This fee will be charged by Unity. In a typical scenario, the use of Unity Personal is completely free, whereas subscribers to Unity Pro must pay $399 per seat.
However, in accordance with the modifications that were introduced today, customers of Unity Personal and Unity Pro will be required to pay fees if they reach $200,000 in annual income and 200,000 lifetime installs. Those customers will be charged twenty cents for each application they install, regardless of how many there are.
"There will be an increase in cost. In an interview with GamesBeat, the president of Unity Create, Marc Whitten, recognized that this represents a shift in the company's economic strategy. "From our vantage point, we are seeking to ensure that Unity and its customers are engaging in an accurate exchange of value. Having said that, the vast majority of our clients will not be negatively affected by this price rise.
Responses from the developers
According to the replies on social media, this was not well received by developers, which is something that you could have expected to happen. "The Death of Unity" is the title of an essay that was written by Brandon Sheffield, who is an independent game developer working at Necrosoft and a contributor to Game Developer. The post discusses the fees and other issues with using Unity. When it comes to how the situation will play out for indie game creators, there is a great deal of suspicion about Unity's intentions and whether or not the impact would be as minimal as the business claims it will be. This story and many other responses on social media reflect this sentiment.
"My game company, Necrosoft, has used Unity for every commercial project it has ever made," Sheffield stated in his post about Unity. "However, at this point I am in a position to state categorically that you should not utilize Unity if you are developing a new video game. If you began a project four months ago, you should seriously consider moving on to something else. Unity is, to put it plainly, not a business that should be trusted.
Alex Nichiporchik, the CEO of TinyBuild, said the following in a message that was posted on social media: "There is not a single developer out there who would look at the announcement and think it was a good idea. When deciding which projects to work on, we frequently take the cost of the engine into consideration. If we take into account the fact that Unreal Engine offers free installs of demos, free versions that can be tested on iOS, and playtests on Steam, the arithmetic seems to favor Unreal Engine. It is quite difficult for me to think that this will truly go forward.
Additionally, the Chief Executive Officer of Tiny Rebel Games, Susan Cummings, stated in a post that "It's a poor move. Despite the fact that I've been a Unity partner for as long as I can remember, I was taken totally by surprise when I heard this announcement. For game developers, especially independent ones and especially those working in free-to-play, who are already suffering with serious UA issues and expenses, this is going to be yet another obstacle in their path. Imagine having to pay for a user who doesn't contribute to your revenue stream.
She continued by saying, "I understand that times are tough, but a revenue share similar to Epic's would without a doubt be the way to address." Particularly taking into consideration the fact that we already pay a hefty price per seat for our permits. It's beyond my comprehension why this decision was taken so hastily; wouldn't it have made more sense to talk with the people responsible for developing the game in the first place? I believe they have no choice but to reverse their decision on this matter; otherwise, game developers would migrate en masse to Epic and other middleware for future projects.
In a message on social media, Christopher Kassulke, the Chief Executive Officer of Handy Games, stated, "I sensed a big disturbance in The Force. "It was as if all of a sudden millions of voices screamed out in terror." And Vincenza Alagna, the Chief Executive Officer of Core Loop, inquired as to how an installation could be validated and what measures might be taken to prevent bots from skewing the counts.
Unity has responded by claiming that the criticism is unreasonably severe and asserting that it feels its requirements for paying are reasonable. The thresholds for Unity Pro and Unity Enterprise accounts are one million lifetime installs and one million dollars in annual revenue respectively.
Unity Pro customers are required to pay 15 cents every install, regardless of the number of downloads. After that, as their volume increases, they pay a lower price each installation. They pay an additional 7.5 cents for each installation that is between 100,001 and 500,000. They pay a rate of three cents for each installation between 500,000 and one million times. They pay a rate of two cents for each installation once the first million are completed. Users of Unity Enterprise are charged according to a pricing structure that is very similar to a sliding scale, in which the sum paid per install drops as volume increases.
According to Whitten, it is much simpler to monitor download and revenue statistics in the modern day due to the availability of corporate data as well as third-party sources that can verify the numbers.
The Unity Runtime, which is the piece of software that is downloaded billions of times every single month, serves as the center of attention for the counting. If you develop a game in the editor and package it together for release, the game will come with the Unity Runtime, which is used by the game to drive the game loop and all of the other logic for rendering the game on someone else's device. If you build a game in the editor and package it together for release, it will come with the Unity Runtime.
According to Whitten, prices are also reduced for developers operating in emerging regions. Unity Personal accounts pay 2 cents per install when they go beyond the thresholds, while business customers receive savings that are comparable to those offered to personal users.
The fees are imposed on both newly developed games and those that already exist. Unity has announced that it would stop offering the current Unity Plus subscription, and users who now have it will be given the option to switch to Unity Pro for a year at the amount that was previously charged for Unity Plus.
The producers of free-to-play games (which have gained a larger proportion of the total games industry) will have the opportunity to offset the cost by embracing additional services that create revenue for Unity, such as the LevelPlay ad mediation service. This will allow the developers to keep more of the money they make from their games. Whitten stated that the goal of Unity was to provide developers with alternatives.
According to Whitten, the majority of users of Unity Editor (which has restrictions on publishing on platforms) do not pay, and Whitten believes that this trend will continue when this adjustment is made. Customers that have reached a significant size in terms of downloads and revenue are often the ones who are affected by this change. And so, you know, when we put the model together, for us, it was really about providing a low or no cost for artists who have not reached scale success and providing a modest one-time compensation for those who had.
He explained that the one-time fee would not have any effect on transactions that had place in the past because it would not take effect until January 1st.
Whitten explained that "we worked to make sure that there were a bunch of thresholds, and then other ways so that customers could get the fee as low as possible and all the way to zero."
That is to say, if you have a million downloads on mobile but nobody makes any in-app purchases, you won't trigger the threshold and you won't be responsible for the price. There are, without a doubt, a few notable exception. Unity has stated that Xbox Game Pass games would not be subject to the same type of thresholds in the future. Demos as well as Humble Bundles do not result in the thresholds being triggered.
Additionally, Unity raised the prices of its Unity Enterprise and Unity Pro editions of its game engine during the course of the previous year. And as a direct result of it, there was a large rise in revenue. For instance, in the second quarter of 2023, there were 1,330 customers who paid Unity more than $100,000 annually, which is an increase from the 1,075 consumers who did so in the second quarter of 2022.
In the second quarter of 2023, Unity's total sales was $533 million, which was up 80% from $297 million in the second quarter of 2022. At the same time, the company turned a profit for adjusted EBITDA, which is a measure of profitability that includes profits before interest, taxes, depreciation, and amortization, moving from a loss of $38 million in the second quarter of 2022. As a result, Unity is in a stronger position financially to weather the storm that is currently raging.
According to Whitten, the price for the Unity Runtime is intended to assist pay some of the costs associated with employing the 7,000 individuals who work at Unity and contribute to the development of the game engine and other services. Back in May, the corporation made layoffs of around 600 people.
According to Whitten, the decision to raise prices was not made hastily or without adequate forethought.
"For something that is as complicated as this is, it's a pretty big change," said Whitten. "It's a pretty big change." "We've been working on it for quite some time now, analyzing both the ideas and the input that has been given on it. The majority of our clients now have additional time to make preparations and comprehend how this change will affect their plans.
Increasing access to game creation tools?
When questioned if it was stepping back from its objective to "democratize game development" with this new price, Unity responded in the negative. However, Whitten stated that this indicates Unity is placing an even greater emphasis on that purpose. He mentioned that this was the reason the thresholds existed, as Unity wants you to continue try your hand at being a creator even if you haven't had much success in the past.
"These fees do not apply to you in any way, as we want as many people to be able to pick up game creation, game development, and learn and determine how to be successful on Unity as we can," Whitten said. "We want as many people to be able to pick up game creation, game development, and learn and determine how to be successful on Unity as we can." "Another thing that comes along with this is the fact that it really makes our free version of Unity more versatile than it was in the past. Because of this, there are no seat license costs connected with the Unity Personal edition, which is the version that can be downloaded by everyone. Before this particular alteration, you were unable to ship games that generated large income of more over one hundred thousand dollars by making use of it. If you believe that you are close to shipping, you will need to make the decision to upgrade to Unity Pro.
Since free-to-play games typically produce a significant number of downloads, Whitten observed that the charge per download decreases at an increasingly rapid rate as the number of downloads for successful games increases. Regarding the advertisement services, Whitten was quoted as saying, "We want to have a balanced value exchange and make sure that we can continue to invest in all of the things that we want to do — both the game engine and other services and everything else — so that we can make it even better for game creators making their games."
Even though there were a lot of people who were grumbling about it yesterday, Whitten stated that the company's primary emphasis was on communicating with game developers and ensuring that Unity was providing the value that game developers require. He stated that the organization would keep working to answer problems.
He responded, "There's always more that Unity can do," and he was right. If you look at the conversations we've had throughout the year, especially at events like GDC or Gamescom, you'll see that they've been extremely upbeat and encouraging.
He also stated that the organization would have its first in-person Unite event in November, which will be the first in-person event held since the year 2019. And Whitten expressed his excitement about future services, including cloud DevOps, artificial intelligence, and storage services, as well as the Weta Tools, which were introduced at Siggraph in August. According to him, Unity Enterprise is equipped with features such as high-end support and source code, and it offers several tiers of service.