The latest unity-related drama
Well, Unity’s new pricing has set a fire in the game development world - again.
It shouldn’t really be much of a surprise though. Unity has done this before, but did it comparatively “better”.
A bit of History
For years, Unity developers would pay once to get a version of the engine they can use ‘forever’. Then in 2017, Unity announced that new versions of Unity will use a subscription model. Developers were most certainly unhappy, calling Unity out for being the corporate robber barons and such things. Many spoke of how this was the start of a slippery slope to squeeze every possible penny out of developers, and how they will never trust unity again.
Then, the rage subsided and everything went back to business as usual.
The New ISsue
Now, Unity is at it again, introducing new pricing on the game runtime installs, payable by the developer, should certain thresholds be achieved. It’s worth noting that these thresholds are quite high, and the vast majority of Unity customers will never hit them. I think that is important to keep in mind, and I’ll get back to that.
As many of you know, Unity’s new pricing triggers when a game hits two conditions. The first is a revenue threshold in sales made over the the last 12 months. The second threshold is a number of total lifetime installs. BOTH conditions must be met before runtime licensing kicks in, and licensing applies to all installs and revenue made above the threshold. The bad news is that installs and revenue from 2023 are going to count when this kicks in in January 2024, and will apply to installs going forward. Reinstalls, WebGL clients, and streaming apparently do not count (anymore).
There are many concerns about this approach, especially when it comes to piracy or the ability for hackers to just spoof the install metrics for a game in order to hurt a developer - and we all know this will definitely happen sooner or later.
Who is Actually Affected?
The pricing model is targeted at big earners. Selling a game through steam can net an indie a lot of money well below the Unity Pro install threshold of 1 million installs. In fact, there are very few Unity games that achieve numbers beyond that - BattleBit being probably one of the most recent and memorable. The revenue per install is great when each install is a full retail sale. Mobile games, on the other hand, have a must larger install base and make a meagre amount of revenue per install, for the most part. There are exceptions of course, like Genshin Impact which are purported to make $15+ per install.
So Unity seems to want a piece of miHoYo’s and SgtOkiDoki’s windfall. They seem to be happy with keeping their hands off of the windfalls of smaller developers - well, except for Unity Person/Plus users where the thresholds are so low they can’t amount of much for Unity, but take a lot away from people trying to succeed with the engine.
Which brings me back to the thresholds. The high threshold requires a game to sell 1M units or more. If it is a game shipped on Steam, such as that $15 BattleBit, that is $15M in gross revenue at 1M shipped units. The install royalty will then trigger charging from $0.02 up to $0.20 per install - or 0.1% to 1.0% of gross BattleBit revenue applying too new installs until the revenue threshold is no longer met. This is cheaper than Unreal, which would take 5% of gross revenue over $1M until you trigger a quarterly exclusion condition of making less than $10000 in a quarter.
The impact on Genshin Impact would likely be %0.01 or less. Maybe much less as they may negotiate a specific deal with Unity.
Smaller mobile studios will not fare so well. If any studio has a LRPU less than $1, then royalty becomes significant. Ad-supported games in particular will be suffer as they can have LRPUs in the pennies. That said, perhaps those low LRPUs are low because the game just isn’t that good, or can’t maintain its popularity. I would expect this case to be rare, as such games are probably less likely to trigger the thresholds to begin with.
People using Unity services, or switch to Unity services, get reduced royalty fees. This is a clear attempt to pull business away from competitive offerings or bespoke player data solutions and ads platforms. Vendors who occupy the same space as Unity should take heed to make sure they carry a significant competitive advantage, or at the very least support other engines.
Could Unity have Done it Better?
This is not our first rodeo. However, this change could have been done in such a way that would’ve drawn less ire: Apply to royalty to the LTS next version of Unity and onwards. This would give developers the option to stay on their existing engine version, and new projects needing new features would be affected by the royalty. Also, it would be helpful to not count 2023 installs towards the threshold - that just leaves the impression of some money-related desperation on Unity’s part. This approach would have been more inline to the approach they took introducing subscriptions. Instead, they did something that seems… impatient.
Also, I think that the $200k/200 threshold shouldn’t exist. What good can come from charging more from developers who are unfunded but are talented and develop a successful game? This is just too greedy.
Trust
The other issue people are discussing is one of trust, and this is a big one. Not only did they introduce this change, which raised the slippery slope concern, but they appear to have changed their TOCs and removed licensing history tracking from the github repository.
Unity is definitely eroding their trust capital, which they should definitely look to minimize by acting quickly and maybe capitulating.
Keep in mind, changing terms like this is not a capability that is unique to Unity. Any provider can do this at any time. It’s competition that will keep this behavior in check. Unity cannot make itself more expensive than Unreal unless it offers something quite outstanding that makes it worth your while. I don’t believe Unity is any more valuable to developers than Unreal, and so long as Unreal keeps their pricing where it is, Unity will compete.
Remember, Epic introduced a 5% revenue share on Unreal Engine back in the day. That is more expensive than Unity’s new pricing for many games. This kind of price change is not something unique to Unity. Granted, Unreal was also released as source code at the time. At the moment, it seems Unity is upping the pricing but not giving any such additional consideration.
Is This the “End of Unity”?
No, definitely not. The impact of these changes ranges from nothing to very small for the vast majority of game developers.
One thing is for sure - Unity will lose developers to Unreal, Godot, and other game engines. I think what it comes down to is what you really believe the risk is. For most developers, the impact will be small if anything. It is really a business decision at the end of the day: Does the cost and impact of switching engine technologies merit your perceived risk of Unity getting more expensive in the future? It will vary from developer to developer. In any event, I would urge people to let things calm down and see how this plays out. My money is on Unity making some changes to abate some of the concern, and then very little changing in the long run.
Regardless of how you feel on the matter, it is still a great time to be a game developer in terms of the options available to you. Every now and then something like this serves to help remind us all of that.