Unity’s plan to charge developers per install has the mobile games business reeling.
In a set of changes to its pricing structure announced yesterday, the software giant plans to add a per-install charge for games that have passed certain download and revenue thresholds. It’s a move that many have suggested will nuke the hypercasual business overnight and potentially put some game developers out of business completely.
Our sources have even questioned the legality of suddenly changing the terms and conditions on products that have already been made. The Runtime Fee policy is set to take effect from January 1 2024, unless Unity moves to cancel its plans. Naturally, a multitude of game developers are calling for exactly that.
“Greatest bait and switch in history,” said one CEO we spoke to off the record. “Unity has gone into full exploitation mode.”
Another CEO told us: “If SKAdNetwork didn’t crush hypercasual developers, this probably will. It is incredibly hard to understand just how it is going to be legally enforceable for games developed and released before January 1 2024. In most justifications retroactive unilateral contract changes are not enforceable and possibly illegal.”
“On iOS and soon Android there’s no permanent device ID, therefore if someone deletes an app then reinstalls it, how are Unity going to distinguish between a new install and reinstall? How will a developer challenge the authenticity of installed app Unity reports? As it stands, it seems incredibly open to abuse.”
A third CEO told us: “Super aggressive move, I imagine it will trigger lots of behind the scenes deals for the big publishers ending up with the smaller studios getting burned.”
Another concerned CEO, again speaking to us anonymously, added: “Say that a developer has players that earn them a tenth of a cent. In those situations Unity is going to charge them, at best, five times more than what the developer would earn. It’s beyond comprehension and reason.”
“Unity’s fees could significantly outstrip a developer’s total revenue, posing an unsustainable and inequitable financial burden.”
As the Two and Half Gamers team suggest in their reaction video below, there may potentially be a way around the Runtime Fees, however.
Developers who use Unity’s Gaming Services and its LevelPlay mediation platform ”may be eligible for credits toward the Unity Runtime Fee,” says Unity. “This program enables deeper partnership with Unity to succeed across the entire game lifecycle. Please reach out to your account manager to learn more”. We assume those account managers have pretty spicy inboxes right now.
If Unity does offer a waiver for those using its broader suite of services, then that may be a way out of this – but it still amounts to strong-arming developers into using its services simply to dodge the Runtime Fee. It’s pretty aggressive stuff, to say the least.
The move is getting plenty of reaction across LinkedIn, Twitter and Reddit as mobile game developers continue to digest the news and its implications.
“This morning Unity sent a powerful message to all mobile game developers, and that message is ‘switch to Unreal, and do it immediately’,” said Damion Schubert, creative director at Netflix-owned studio Boss Fight.
Social First founder and CEO Kim Soares said on LinkedIn: “I’ve been waiting for Unity to do something like this for years, as they cannot very well just be unprofitable forever. 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 and publishers,” continued Soares. “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. Prediction: This is a move in Unity’s long term game to launch their own app store.”
Miniclip’s senior executive vice president Sérgio Varanda laid out the following scenario, also on LinkedIn: “A company invests 1m to attract 10 million users to their hypercasual game. If they’re fortunate, they might earn 1.2m 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 9m installs beyond the set threshold. The breakdown is as follows: 46.5k for the first million installs and 80k for the subsequent 8m. This sums up to 126.5k. Additionally, if we factor in the cost of an enterprise license for five 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.”
Colossi Games CEO Manuel Prueter said that Unity’s leadership has shown “blatant disregard for developers’ livelihoods”, and suggested the policy is a “short-sighted desperation move.”
HandyGames CEO Christopher Kassulke accused Unity of wanting to “destroy our games market”, while Immortality creator Sam Barlow ran the numbers and concluded that the Runtime Fees would have left his critically-acclaimed interactive movie “$300k in the red”.
Rival game engine Unreal stands to profit from Unity’s policies the most, with many developers stating that they’ll be switching to other engines like Godot and Cocos2D, too. Epic Games’ Unreal Engine evangelist Ari Arnbjörnsson was quick to jump on the news.
“We only succeed when you succeed,” he tweeted. “Our 5% royalty model only kicks in after your first $1m in gross revenue, meaning that if you make $1,000,001 you owe us 5 cents. And this is per title! Also, revenue generated from the Epic Games Store will be excluded from that 5% royalty.”
But let’s leave the last word to the brilliant designer of Spelltower, Ridiculous Fishing, Really Bad Chess and Knotwords Zach Gage, who said: “Fuck off Unity”.
