Unity just destroyed the mobile gaming industry with their new pricing update — But I will continue to use it!
Earlier yesterday, the leading game engine — Unity, introduced a new pricing plan effective from 1st January 2024.
13th September 2023
Earlier yesterday, the leading game engine — Unity, introduced a new pricing plan effective from 1st January 2024.
Based on this new model, if your game reaches a certain number of downloads and generates a certain revenue number, you would be forced to pay Unity a fee per every install.
Which sucks, to be honest, here is why:
Segmented Global rate, not separated
Regardless of where the installation came from, you would pay a segmented rate. So if the installation came from an emerging GEO (India/Brazil) you would pay a different rate, than an install coming from the USA. But eCPMs in India are way less compared to Brazil. Every country has its own economics for advertising and monetizing. Mobile games rely on different GEOs to generate revenue.Revenue-based and not profit-based
A huge chunk of mobile games relies on running performance ads over Meta/TikTok/Applovin/Unity etc. networks to obtain players and in return, generate a % of profit. The revenue generated from these mobile games is huge — but the profit is not so much.
Mobile games will suffer due to this new pricing model by Unity.
Sérgio Varanda, Senior Executive VP at Miniclip, explains a scenario on Linkedin
Under Unity’s new pricing model, consider this scenario:
A company invests 1 million to attract 10 million users to their hypercasual game. If they’re fortunate, they might earn 1.2 million in return. They’ve made a profit of 200k.
Let’s assume this company possesses a Unity enterprise license. They must now pay Unity for the 9 million installs beyond the set threshold. The breakdown is as follows: 46.5k for the first million installs and 80k for the subsequent 8 million. This sums up to 126.5k. Additionally, if we factor in the cost of an enterprise license for 5 developers at 3k each, that’s an added 15k.
In essence, from the 200k profit, Unity claims 141.5k, leaving the developer with just 58.5k to cover salaries, overheads, and other expenses. One can’t help but wonder what we’re they thinking when they came up with this pricing model.
Kim Sorares, pens down his thoughts on Linkedin
Unity will start charging up to 0.20$ (yes, 1/5 of a dollar) for every single install of a game built on their engine 💸💸💸💸 Lot to unpack here so:
1) This is not really that big of a surprise because Unity desperately needs to get profitable. Q4/2022 was the first profitable (non-GAAP) quarter in the company’s 18 year history.
2) They are now in such a dominant position, around 40% of all games made use Unity, that they can do what some could describe as a d*ck move.
3) This is bad news for players in low revenue countries. Adding up to 0.2$ per install can make some countries just plain unviable for developers/publishers. Example: If average LTV per player is less than 0.2$ + mean average CPI then you do not want your game to be available at all in such a country.
4) What about small devs, maybe just a single person, who happen to have their game blow up big time and they get, say, 10 million downloads but their monetisation is next to non-existent. They will get 2 million dollar bill from Unity and spend rest of their lives in debt?
5) Yes, there are different tiers and if the developer 100% integrates with Unity’s ads and other systems the cost goes down to 0.01$. So points 3&4 were maybe more dramatic than what reality will end up being.
6) Prediction: Unity’s long term game with this move is to create their own app store.
To be honest — I still think we are missing some points or maybe Unity has not disclosed all of the points? Because what they have mentioned seems to affect A LOT of mobile studios and developers and I am not sure if that is what they wanted in the first place 😅 So maybe there would be a follow-up announcement!
14th September 2023
After giving a lot of thought, I decided I would actually continue to use Unity. I do not condone any of their actions and their new pricing policy, however, as a developer I have my reasons:
Would I still use Unity? Yes.
I run a gaming studio building browser games. According to their latest update, WebGL/Browser games would not count as an installation.
I am working on premium games for mobile/Steam as well. These are the games for which you have to pay an upfront amount to play the game. The margin would be justified in this case.
Porting to a new engine can be a hassle in the beginning. Producing an engaging game is my focus at the moment. I can worry about the scale later.
If my games do pick up pace amongst the audience, I might port it out to Godot or any other engine.
I believe things can change, the game dev community is fighting back really hard to revert this.
Friday, 15th September [Update]
Azur Games, a leading mobile games publisher, collectively with other mobile publishers, decided to write an open letter to Unity. Below is a post on their LinkedIn page:
This post is about the recent announcement by Unity.
We all got into game dev because we love crafting new worlds. But it’s the community — friends, partners, and you — that makes this journey worthwhile. Core to this community are values like openness, collaboration, and shared expertise.
But let’s talk about Unity’s September 12 announcement. The company’s intention to charge developers for every installation of a project that uses its engine isn’t just a ‘policy update’; it’s a game-changer that could shutter studios — big and small — that have been Unity evangelists for years. This will ripple through our industry, putting thousands of people at risk of losing their jobs.
That’s why we’ve penned an open letter — alongside various game dev companies — to express our collective concern. This letter is for Unity, sure, but it’s also for all of us in the industry.
Your voice matters in this. Check it out and consider joining our call to action. The rules are shifting too dramatically for us to stay silent.
Saturday, 16th September [Update]
I am seeing plenty of publishers group together to boycott
Unity. They have all penned an open letter (as in the update above) and publicly calling out Unity over LinkedIn and other platforms.
I will make more edits and updates to this page as I discover more important news from the industry. Stay tuned!
Industry leaders are voicing their concerns as well: AppLovin CEO urges Unity and Riccitiello to ditch Runtime Fees or risk ‘tearing the industry apart’
Sunday, 17th September [Update]
We are slowly starting to see repercussions across the digital space.
Monday, 18th September [Update]
Unity FINALLY responded to all the ongoing noise against it’s runtime-fee policy!
Was it only last Tuesday that they announced the policy? It feels like a while ago!
6 days and the pushback from the Game Developer community has been hard and strong 💪
Companies and indie devs came together and stood strong. Azur Games posted the following on their LinkedIn:
In just three days, more than 400 companies and indie developers have joined in on the collective letter addressed to Unity.
The numbers are growing so rapidly that, alongside other industry representatives, we’ve launched a dedicated website where everyone can openly show their support.
Visit unitedgamedevs.com.
And a heartfelt thank you for all the words of encouragement we’ve received so far. Thousands of emails, comments, and messages from the entire industry — from game designers, artists, producers, solo developers to anonymous Unity employees — have reached us.
We truly believe that the world of game development is where we can bring not only our own dreams to life but also the dreams of millions of players.
I will be back with more updates on this article as I discover them!
Maybe Unity will revise its policy, maybe not. But one of the reasons why I like the gaming industry is the community — Publishers are essentially competitors to each other, yet they are standing together in #Unity against Unity.
The Gaming Community is one of the most non-toxic industries I have come across and seeing the community stand against something toxic proves that this is an industry that will not stand down.
What are your thoughts on the latest announcement by Unity? Will it affect your gaming business somehow?
And let’s not leave without my meme generating capabilities
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I am Anul 👋
👨🏻💻 I post insights, memes, and how-to’s around the games industry
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