Can Unity reclaim its lost customers?

It's going to be difficult for Unity to regain the trust of its customers even if they changed the pricing structure now. Unity was leaking users like nobody's business, some were transitioning into Godot for less ambitious projects, and some going for Unreal. The previous pricing scheme that upset developers not only brought a lot of backlash and churn to the company, it also made the engine directly compete with Unreal.

Before the change in pricing strategy Unity was chosen over Unreal for price reasons, however, in recent times Epic has launched many new features for Unreal  that speed the development time and, with this, can bring significant savings to development budgets, making it more appealing to developers than Unity with its new pricing strategy before the change back. - Malize Evans, Co-CEO & CMO, Raftur Games

Unity sabotaged its own success

Unity in recent years has been the example of ‘what not to do’ from a PR and comms standpoint. To the industry it has built a monopoly position as a development platform but it wasn’t making any money. Everyone now knows what it did to try to change that position was flawed and how that was communicated was even worse. Why this was such a disaster for the company is yet to fully come out but at the time I remember speaking to a number of my friends in Unity about the introduction of the Runtime Fee and it was sprung on them as unceremoniously as it was on the industry and the aftershocks continued for months. The then CEO John Riccitiello (whose derogatory remarks prior to this had made his position tenuous) bullied through the new pricing structure, in a speedy attempt to satisfy shareholders and push his users to adopt Unity’s ad solution.

The way it was done was (textbook) wrong and everyone paid the price. There were many factors to blame. 

First, the Runtime Fee was fundamentally flawed and very poorly thought through as a product: it had clearly not been discussed, tested and worked through with Unity’s client base. As a result of this any messages that were used to accompany its introduction were dictatorial and instructional - there was absolutely no other way to message this change. Big mistake: A fundamental change which will affect hundreds of thousands of people has to be messaged clearly, carefully and positively. 

Second, the internal communications piece was entirely missing: Unity’s own people had no idea what was going to happen and were not prepared for the ensuing onslaught.

Third, the press announcement and how that was handled was woeful. The messaging was terrible, there seemed to have been little to no planning and the way the aftermath was handled… well it wasn’t handled at all.

Fourth, and in my opinion the most important, Unity’s leadership was clearly disengaged from its client base. A wall of silence went up as developers suffered. JR had already done a great job of alienating his customers by previously calling them ‘fucking idiots’ and then what followed was turmoil and chaos as he bullied through revenue grab. I have been incredibly critical of JR on my podcast The Rest Is PR and in articles such as the one I write in Pocket Gamer. I stand firm in my belief that it was JR’s leadership that was to blame for everything that has gone down in the last 2 years: his unsophistication in thought, process, deed and words came to be exposed when the company needed a sophisticated solution. 

Now: JR is gone and his senior team of fat cat yes people have gone too: Carol Carpenter, the CMO has ‘resigned’ and in her last year she took over $4 million in pay - none of that pay, unsurprisingly, was a bonus! The incoming new CEO Matthew Bromberg has to undo all the wrongs. He has consulted with the industry and taken his time to revert to the seat-based pricing model. And fees have predictably risen: Unity still has to make money!

I think Bromberg deserves our support as he is doing his best to listen but he equally has to steer the Unity ship to profit: the signs are good in that he is listening to the feedback he gets and a bit more attention is being paid to not only the ‘what we do but how we do it. - Jacki Vause, Founder & CEO, Dimoso 

The runtime fee is a costly miscalculation with long-term consequences

Unity's decision to remove the run time fee was driven in large part by how stupid of an idea it was in the first place. Adding a user tax on your largest customers so late in the product life cycle is never going to be well received. Simple questions like how will they track ad revenue from non-Unity-owned entities and webshop revenue were never addressed.

The comms around the "Unity Tax" as it came to be known was botched from the start. On release developers were furious since no one knew what they would be paying and when. Months were also spent negotiating individually with developers for discounts from either moving to LevelPlay or spending on other Unity products. Word quickly spread that different developers would pay different rates which only served to infuriate their customer base even more. 

In short, the run time fee was destined to fail as soon as it was rolled out - had the unity tax been implemented in 2004 there would have been no problem but pricing is hard. Unity's hire of Jim Payne (founder of Mopub and MAX) as its CPO about a month ago shows that they are doubling down on their ad tech business. One has to assume that the removal of the run time fee was driven in large by this. - Felix Braberg, Founder and Host, two and a half gamers

Trust has been shaken as studios look to alternatives like Epic Games

Unity can’t be successful if it destroys its own market. The U-turn was very much expected, partly due to the vocal backlash from more or less everyone in the industry, partly because it would have put too many games into an economically impossible situation. The player that suffered the most damage in this case is Unity itself.

Sure, they changed leadership and are seemingly on a more customer-centric track now, but the trust has been shaken. Game studios are being enticed by alternatives. Epic Games is offering better pricing in the Epic Games Store for Unreal-built games. WebGL and browser-based gaming is growing in popularity (although remains niche).

The reversal was a clear, necessary step, but Unity is unfortunately still in damage control mode. Let’s hope they are able to articulate a compelling proposition to the industry soon. - Ben Cousens, CSO, ZBD

Unity's leadership has taken a pro-developer approach

It's encouraging to see the moves that the Unity team has made recently to be more pro-developer. I think a lot of Unity's aggressive decisions were the product of old leadership, outdated ways of looking at the market, and a huge paradigm shift in becoming a public company that can't go on forever operating at a loss.

Game developers are struggling, and their partners can't treat them like it's still the zero-interest rate, growth only environment anymore. Luckily it seems like the new C-suite at Unity understands their customers better and is making more customer-friendly decisions. -Tanner Hanson, RevU President

The focus will shift to add-on services for Unity

In the world of free-to-play and razor-thin UA margins, Unity’s Runtime Fee was simply the wrong pricing model. My prediction is that they will look for opportunities to ramp up income from their add-on services to compensate.

- Teemu Haila, Co-Founder and Chief Product Officer of Metaplay

People looking to alternatives to solve their problems

Actions like these throughout history show that people have more power against companies than they realise. When the powers that be push too hard, and the people push back with the same voice, they can defeat anyone. As Unity gets greedy with its pricing as their share prices tumble, the people look for alternatives to solve their problems. - Gavin Grady, User Acquisition Expert