The Unity Runtime Fee: What a time.
The Unity Runtime Fee was clearly a boardroom decision.
Clearly, in that it was kind of announced in their August shareholder meeting…sorta?
"For revenue, we are increasing the low-end of the revenue guide by $40 million to $2,120 - $2,200 million, an increase of $52% to 58% year-over-year"
Q2 2023 Shareholder Letter
Clear as mud. Like the SEC Rule 10b5-1
The Unity CEO selling 2,000 shares September 9th, who has sold 50,610 shares total. Granted, 2,000 shares is a drop in the bucket for his 3,211,394 shares at the time of writing.
This happened before the fee announcement blog post. The CEO made a Rule 10b5-1 sale, along with several others, but not all. Which basically allows insiders to make these insider sales on a scheduled plan.
However, they get the choice when news hits the public they publish their own blog posts announcing their new Runtime Fee Schedule whenever they want…September 12th
That’s not helping their case.
This controversial new charge for games developed using the Unity Game Engine requires game developers to pay for each game download. It is currently only applied to games that surpass specific revenue and installation thresholds depending on the developers Unity subscription type.
The Unity Personal/Plus users will apply if annual revenue exceeds $200,000, AND if lifetime installs surpass 200,000 installs. Presumably, the install threshold applies to tackle freemium business models.
Unity Pro/Enterprise customers need to pass a higher $1,000,000 annual revenue, or 1,000,000 lifetime installs.
Let’s see how long this table remains accurate
Unity’s Structured Runtime Fee
> make a game
— michael j foxney 🌵 (@kurtruslfanclub) September 12, 2023
> game is fremium
> game makes 200k from in-app purchases after being installed 3 million times
> now owe Unity 20c per 2.8M installs, $560K
> that’s 360K more than we made https://t.co/6fe6Ob35Oj
Opinion time.
Look, games are already expensive to make, both for game developers, and for the engine developers.
Unity has been the little engine that could who fought the big AAA game engines. Unity provided a free game engine where Unreal and Cryengine were charging just to use theirs. Unity proved there was another way, and it showed as a barrage of Unity games found themselves on every game market on the planet.
It virtually spawned the entire Indie Game scene.
I’m racking my brain for a real reason to be upset about this, and I just keep realizing I’m nostalgic for those days when I first found Unity as a poor college student.
There wasn’t much of a choice at the time
I was in high school on a mac when I first found Unity in 2009, I hated it, and uninstalled it. I found it again later in College. My friends and I made little games with it that never made any money, but gave us hope one day we would.
Before Unity, the choice was:
Build it
Unreal or Cryengine (which was never really an option)
There were others, but come on, lets not split hairs.
Unity was the Free for the little guy, while providing a Pro version for the big dogs.
Simple Freemium model! Absolutely Radical at the time.
Unity was what the world needed at the time.
Unreal and Cryengine responded by providing their engine for free years later.
But that was Unity’s business model at the time, they needed growth. It fit for what they needed as a business.
At Digipen, toward my last couple of years, the developer students knew how to build their own engines, but in 2014 they needed to learn Unity/Unreal because that was just the state of the industry, companies were using Unreal, and Unity as a cost/time saving solution. The industry needed devs versed in the popular pre-built engines.
I’m excited about the future.
The industry is standardizing its business model once again. Unreal, Cryengine, and now Unity use a similar business model.
I can't see Unity backing down from this, only moving forward with the developers who stick around.
Maybe we go back to making our own engines again, maybe we look for alternatives, or maybe we pay the piper.
Cryengine:
Use CRYENGINE for free. 5% royalty applies when you ship your project. Your first $5K annual revenue per project is royalty-free.
Unreal Engine:
Unreal Engine is free to use for learning, and for developing internal projects; it also enables you to distribute many commercial projects without paying any fees to Epic Games, including custom projects delivered to clients, linear content (such as films and television shows) and any product that earns no revenue or whose revenue falls below the royalty threshold. A 5% royalty is due only if you are distributing an off-the-shelf product that incorporates Unreal Engine code (such as a game) and the lifetime gross revenue from that product exceeds $1 million USD; in this case, the first $1 million remains royalty-exempt.
O3DE:
Free and Open Source Software. Used to be Amazon Lumberyard, which was Cryengine.
Godot:
Free and Open Source Software. Looks to be Unity-Like
Others:
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