What is Unity’s new Runtime Fee and How It Will Change Game Development?

On Monday, September 12, 2023, Unity Technologies, the company behind the popular game engine Unity3D, posted a new pricing plan on their development blog. Aiming to go live on January 1, 2024, the open letter revealed significant changes to how the company will charge for using Unity3D to game developers worldwide.

This announcement is undoubtedly a game changer – if not for the most encouraging reasons.

Although the technicalities of this pricing plan may escape newcomers into the software and gaming industry, its reveal has generated a massive backlash for the company, with several developers and small studios threatening to stop using the engine altogether.

The reasons, you may ask? Most companies and individuals using Unity have decried these new rules as unjust and challenging for developers, particularly for indie and AA creators whose earnings have enough of a challenge between distribution fees and the market’s harsh competition to worry about additional expenses – particularly when not previously discussed with the scene at large.

In the days following the release of the initial letter, the company remained cautious about its public opinion setback, apologising and adjusting its course as the events unfolded. Its repercussions, however, quickly became part of a hot debate in the industry. What are these implications? Will this change game development as we know it?

If you want to find out more about these questions, keep reading.

‍

The emperor’s tithe

‍

As the company pointed out in its open letter on September 12, Unity3D is composed of two software components: the Unity Editor, which lets you create, develop, and edit all aspects of a game, and the Unity Runtime, which translates code, instructions, and assets into a playable game easily accessible and distributed over most gaming platforms today.

Unity Technologies chose against a revenue share to let developers keep the financial gains of sales and player engagement. Instead, they opted to add a fee to the Unity Runtime component that, starting January next year, will charge developers according to whether their games have passed specific thresholds and conditions.

All Unity Personal and any Unity Plus subscribers with games released before January 1 will pay $0.20 for each installation above a $200,000 revenue threshold and 200,000 lifetime instals total.

After January 1, 2024, the Unity Plus subscription level will disappear, forcing users to upgrade to Unity Pro.

Meanwhile, Unity Pro and Unity Enterprise subscribers will pay $0.01 for every $1,000,000 earned and 1,000,000 lifetime instals.

These fees are reduced for developers in emerging markets, with Unity Personal accounts paying $0.02 per install above the threshold and Enterprise accounts paying $0.005 per install.

Such conditions were already a tough pill for most indie creators and small studios, whose earnings they shared with publishers and distribution channels like Steam, Epic, online proprietary stores, etc.

But there was another nail in the coffin:

The new pricing structure would also be retroactive, considering past instals for every developer or studio meeting these entry points on January 1, 2023.

Saying that the announcement drew wrath from the Internet would be an understatement. In less than three days, most Unity developers vehemently disapproved of these measures. Some of them did it in a spicier way than others:

‍

- Cult of the Lamb creators Massive Monster encouraged players to buy the game before the dreaded January date, in which they would remove the game from all digital stores. Even though the studio revealed days later the threat was just a prank, the studio questioned Unity’s decisions nonetheless and said they would revise their options during the following months.

- In a rare occurrence, Slay the Spire developer Mega Crit announced they would migrate their new game to another engine if the Runtime Fee conditions – which they described as a “violation of trust” – stayed in place. They also had other colourful words to say.

- Among Us creators, Innersloth said they would inevitably have to delay all future content for the game to switch engines, wondering whether other studios could afford to do the same given their resources and release dates.

- Landfall Games – the studio behind Totally Accurate Battle Simulator – considered Unity’s decision a significant breach of trust towards game developers, giving a brief example of how the tech company’s decision would affect them retroactively.

- Wizard with a Gun developer Galvanic disclosed the soon-to-be-released online cooperative sandbox survival game would be their last game developed in Unity.

‍

Other individual commentators and analysts pointed out that some of Unity’s C-level staff and board of directors, like Unity’s CEO John Riccitiello, president of growth Tomer Bar-Zeev and director Shlomo Dovrat, sold significant percentages of their Unity shares shortly before the now-catastrophic report.

Such was the outrage that the president of Unity Create and de-facto speaker of the company, Marc Whitten, was forced to quickly address the situation a day after, on September 13. His statement included much-needed clarification about how instals count towards the threshold – only the first in any device – and stated that only about 10% of the current Unity developer database would have to pay fees.

But the damage was done, with more developers from all sizes and parts of the world joining the hunting party.

And then, the unthinkable but surreal happened:

Three days after the announcement, Unity’s central offices in San Francisco were forcibly closed following a “credible death threat” made on social media by none other than – allegedly – a Unity employee from another branch.

The storm was only beginning to unravel.

‍

The developer on their labyrinth

‍

As a young indie developer or small studio hot on the trail of releasing their first game, it is easy to point fingers and feel betrayed by Unity. If a game studio risks losing most of its forecast earnings as soon as it meets the threshold, it will naturally see such a measure as draconian.

However, Unity has also faced challenges for a while behind closed doors. Several outlets and experts have pointed out that the game engine developer has been operating at a loss for years, with rumours that the tech giant would be bought or subsumed by other companies.

After helming Electronic Arts for two terms, John Riccitiello, who worked as a consultant for Unity, was hired to become its CEO in 2013 following the resignation of former head David Helgason. The latter justified his decision to come back to what he truly enjoyed within the company and wished Riccitiello the best in the role while still keeping a significant say in Unity’s direction from now on.

But even then, most opinions about the change in the line of command were lukewarm.

Riccitiello’s no stranger to executive positions, having held the top post at EA during two terms. Recognised as a capable leader during his more than twenty years of career in video games, he nonetheless was behind controversial decisions during both of his tenures at the gaming giant.

FIFA 09 – the starting point of “loot boxes” for the sports game series – was developed under Riccitiello’s command. The former EA CEO was also reportedly keen on monetising weapon reloads on Battlefield 3, an idea he revealed during an investor call.

It is, therefore, easy to blame him for the eventual media and PR disaster this situation may have caused. After all, we live in times where CEOs and founders are increasingly falling under public scrutiny for their actions and starring a new “rich against the poor” crusade.

Riccitiello’s informal comments during interviews and panel discussions months before the Unity Runtime Fee announcement have not been the most appropriate to dispel such miasma either. In July 2023, he referred to the designers and developers who didn’t think about early monetisation of their games in an, well, let’s call it uninspiring light.

You better read that by yourself.

Even though he apologised for the remark, his public image has not fully recovered from the aftermath. Still, it is difficult to blame him alone for the tricky situation Unity has put itself in.

For years, Unity as a company sold itself as the game engine of choice for the entrepreneuring small developer out there, gaining a sizeable part of the indie market and becoming a valuable tool for newcomers into the industry. But an increase in users also means an increase in maintenance costs and R&D investments that, in the end, someone has to pay for.

With such a fee, likely, the top staff at Unity is not targeting exactly the run-of-the-mill starting developer but a much larger fish – namely, the power players such as Tencent, HoYoverse, and Riot Games, whose mobile games, like Genshin Impact, Honkai Star Rail, and League of Legends: Wild Rift were developed in Unity and are cashing massive amounts of money in the mobile gaming space.

And thus, the innocents could be paying for the sins of the guilty – but to what extent?

It is difficult to gauge how the Unity debacle will end. On one side, having backtracked most of these unconsulted decisions appears a good step in the right direction. On the other, many developers feel justifiably betrayed by the initial announcement, which probably shook stones not meant to be moved in the general state of affairs.

The ball is now on Unity’s side of the court.

‍