Unity have said that they expect to lay off staff in the coming months, following the engine maker’s catastrophic rollout of their new pricing plan earlier this year and as they turn towards a more “focused” offering, including the likes of AI, for growth.
In their latest Q3 earnings report (via The Verge), Unity acknowledged the disastrous introduction of their proposed runtime fee announced in September, which was ripped to shreds by devs for its suggestion of charging them every time a player installs a game.
Amid widespread criticism, big-name devs quickly announced plans to move away from Unity as a result, prompting an apology from Unity that promised changes – including dropping the fee for devs using Unity Personal and those who don’t upgrade to the newest 2024 release of their Pro and Enterprise, meaning older games would be exempt. The changes also include allowing devs to self-report their install numbers – rather than relying on “estimates” feared to be open to fraud or manipulation by bad actors – and the option to instead pay a set 2.5% revenue share.
“At the end of September, we introduced runtime fees on the Editor to complement our seat-based subscriptions, a critical step to make Create a sustainable business,” said Jim Whitehurst, Unity’s interim CEO following the resignation of long-term chief John Riccitello last month, in the earnings report. “While we did not expect the introduction of the fees to be easy, the execution created friction with our customers and near-term headwinds. We expect the impact of this business model change to have minimal benefit in 2024 and ramp from there as customers adopt our new releases.”
The report revealed that Unity’s Q3 results had been “mixed”, falling within their expectations thanks to reduced overall losses but slow growth. Create Solutions revenue remained mostly flat despite a bump in subscriptions due to coming off record numbers in 2022 and a drop in revenue in China as the result of government restrictions on video games.
As a result, Unity said that they would “likely” join the number of video game companies making layoffs in recent months as they look to “become a leaner, more agile, faster growing company” via a number of “interventions”.
“This will likely include discontinuing certain product offerings, reducing our workforce, and reducing our office footprint,” Whitehurt confirmed.
The cutting of products, jobs and office space will accompany a tighter focus on what Unity called their “core” in the Unity Editor and Runtime, as well as what they refer to as “Monetization Solutions”. Among the “significant opportunities” Unity mentioned as being prime for growth is AI.
“Several weeks ago, we started a comprehensive assessment of our product portfolio to focus on those products that are most valuable to our customers,” Whitehurst said. “We are also evaluating the right cost structure that aligns with the more focused portfolio.”
Whitehurst said the “exact timing” of its interventions, including the possible layoffs, is “difficult to estimate”, but said that Unity “are acting quickly and expect to make final decisions over the next few weeks”, with changes in place before the end of the first quarter of 2024 in six months’ time.
Don’t expect the terrible news out of the industry to stop anytime soon, then; thoughts with those at Unity likely to be left in an awful limbo for a while yet.
