October 09, 2023

Witnessing a moment of clarity... Unity edition

I hadn't spent much time commenting on Unity's attempted self-immolation of last month, mainly because I didn't really have much to add to the conversation.

Unity, for those that still somehow don't know, is the single most-used engine for game development, with something like seventy percent of Steam games being based on Unity, and an overwhelming presence on Android and iOS. Unreal, the second-most-popular game engine, has less than half Unity's presence on Steam, and no presence at all on iOS anymore, thanks to their "Project Liberty" stunt, and the Epic v Apple lawsuit which followed.

In fact, it could easily be argued that Unity have a monopoly on game development, since they're well clear of the sixty percent market control threshold that the "rule of reason" normally considers to be the bar for monopoly. So, when they decided to abuse their monopoly position by by rewriting the terms of service with govern access to, and monetization of, the engine, unilaterally, retroactively, and without any notice at all, it sent shock waves through the games industry.

Unity eventually (mostly) backtracked, declaring that their new rules would not apply retroactively; that the per-install fee would only apply if it was less money than the new 2.5% revenue share; that the revenue share would only apply if a project had sufficient sales in the previous twelve months; and so on.

But all was not well in the Unity developer community. Trust between developers and Unity had been completely destroyed, with no obvious way to restore it as long as the current leadership team remained in place.

And so, after dragging their feet on the issue for weeks, hoping that game developers would simply roll over in the same way that game consumers have done so often, that leadership team announced today that changes were coming, starting with the man at the top.

From VentureBeat:

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.

Meanwhile, hoping to avoid a stock panic, Unity said that it is reaffirming its previous guidance for its fiscal third quarter financial results, which will be reported on November 9.

John Riccitiello had managed to alienate basically everyone in video games, both in Unity, among Unity developers, among the gaming media, and among gamers, pretty much entirely by being a complete asshole. I suspect he will not be missed.

Whether his departure alone is enough to being restoring trust with Unity developers remains to be seen. I expect that most of Riccitiello's C-suite lieutenants will be following him out the door, as any new CEO will likely want to put as much distance as possible between Unity and Riccitiello going forward. 

And there's still the matter of those members on Unity's board who pushed for the acquisition of IronSource, enriching themselves at the expense of shareholders, and whose malign influence may have been partly to blame for Unity's monopolistic cash grab; I don't see how trust can be restored by any CEO who still answers to a board that is pushing the material interests of a few of its members over their fiduciary obligations to shareholders. 

I don't think this story is going away anytime soon. Even with Riccitiello and his henchmen out, and the former IronSource executives off the board, I don't think this story will be anywhere close to over. But at least Riccitiello has had his necessary moment of clarity, accepted the inevitable, and fallen on his sword for the good of the firm, which was clearly what circumstances demanded.

Watch this space...