If you have a game development studio and you’re in the mobile game business, or you’re developing a multi-platform game, there’s a very good chance that you’ve come across Unity.
Unity offers support for multiple platforms and the ability to manage game elements such as graphics, physics, sound, animation, and AI, and services such as advertising, analytics, cloud builds, multiplayer modes, performance reporting, and partnerships. So, even though its share price has fallen from $195 to $40 in the last two years, Unity has a solid position in the industry, both in terms of a workforce specialized in its products and in terms of popularity.
One of the reasons why Unity was so popular was its pricing model because Unity offered developers a range of affordable or free options to suit different needs, and it was easy to find a suitable option, no matter the size of your studio or project.
Yesterday evening, however, Unity announced significant changes to its pricing model, and these changes have been met with outrage.
So what is Unity’s new pricing, and how is it different from the old one? Why did it get so much backlash?
Let’s start by comparing the old and new pricing packages without getting into the Unity Runtime “pay-per-install” model that has caused such an uproar.
Let’s start with the old pricing scheme
Unity’s old pricing model consisted of three main options: Personal, Plus, and Pro. The features and prices of these options were as follows:
- Personal: This option was free for developers with less than $100,000 in annual revenue and was enough to get access to basic game engine features and services. Of course, this option had some limitations. For example, Personal users had to display the Unity logo at the start of their game. Personal users also had limited access to the cloud service and couldn’t access certain features, such as performance reporting.
- Plus: This option was available for developers with less than $200,000 in annual revenue for $35 per month or $420 per year. The Plus option offered more features and services than the Personal option. For example, Plus users could display their own logo at the start of their game, utilize the cloud build service, and access performance reporting.
- Pro: This option was available for $125 per month or $1500 per year for developers with unlimited annual revenue and gave access to all the features and services Unity offers. For example, Pro users could use the cloud build service unlimited and track performance reporting in real-time.
We’ve briefly gone over the old pricing, and it’s worth noting right away that the renewal of these packages was clearly not going to start a revolt on its own, so we’re getting there.
Unity has changed the name of the old Personal option to Free in its new pricing, while the Plus and Pro services have also seen some price increases. The Plus option has increased from $420 to $480 per year, while the Pro option has increased from $1500 to $1800.
In addition, a new flagship package has been added to the Unity catalog. The Enterprise package is specially designed for large-scale and highly complex projects, and unlike the others, it does not have a fixed price. The Enterprise option offers all the features and services Unity offers, as well as extra support, training, consulting, and customization, and the price is determined on a project-by-project basis.
If everything stayed as it is, it would be enough to talk about a simple price increase and revision, and Unity would not be the target of the criticism it is today. But as you can see in the table below, Unity’s new pricing plans to charge a fee based on game downloads. In other words, every time a game is downloaded, the Unity Runtime code is also downloaded with the game, and a price is paid.
Unity’s new pricing will apply to games that exceed a specific revenue & download threshold. These thresholds are set as follows:
Unity Personal and Unity Plus: Those who have generated $200,000 or more in revenue in the last 12 months AND have at least 200,000 game downloads.
Unity Pro and Unity Enterprise: Those who have earned $1 million or more in the last 12 months AND have at least 1 million game downloads.
For games that exceed these thresholds, the following minimum fees will be charged per download:
Unity Personal and Unity Plus: $0.20
Unity Pro: $0.15
Unity Enterprise: $0.125
These fees are set to decrease gradually as the number of downloads increases.
Is the pricing the same in every country?
No, there is not the same pricing for each country. Emerging markets have separate pricing. Accordingly, those in Plus and Personal will pay 0.02 dollars instead of 0.20, those in Pro will pay 0.01, and those in Enterprise will pay 0.005 dollars. Accordingly, a game under the Unity Pro package that reaches one million downloads will be billed $20,000, while a developer in the emerging market will be billed $10,000 under the same conditions.
Emerging markets are also exempt from diminishing shares as downloads increase.
Let’s say a Unity Pro game only gets 100,000 downloads. That would be bad news all around, but in countries not covered under emerging markets (US, UK, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland, and South Korea) that game would be billed $15,000. In contrast, a developer in emerging markets would only be billed $1,000.
Putting all this together, it’s easy to see why Unity’s new pricing model has been met with a global backlash from the game developer community.
Although Unity has made two small backtracks on this pricing model, this backlash is unlikely to stop anytime soon because the new pricing model brings more risk to mobile app developers. That can make it harder to forecast and predict the revenue of mobile apps. In this case, KPIs such as mobile app revenue, conversion rate, and lifetime value (LTV) may be negatively affected.
So, how has Unity responded to the criticism?
First, they announced that the owner of the service (Microsoft or Sony) will foot the bill for games included in services like Game Pass or PlayStation Plus. This may be a slight relief, but it’s unclear what policy the service owner will adopt in this case.
Likewise, since Install Tracker is included in the application, it is evident that torrent and pirated products may cause additional costs to developers. Unity’s stance on this issue is also unclear.
The other update was to fix the install bombing possibility that immediately comes to mind. Accordingly, they announced that they will only charge for the first download and will not charge for subsequent downloads to the same device. On the other hand, when “person X” downloads the same game on different devices they own, the developer will continue to be charged.
What’s going to happen now?
First of all, it remains to be seen whether Unity will turn a blind eye to all this criticism.
There’s not much to write here at the moment, but it’s safe to say that this situation has awakened the survival instincts of many developers. Although Unity says that only 10% of its customers will be affected by the changes, many companies may have to make some revisions to their strategic plans.
The industry has a strong consensus that Unity should back down from these changes. Many scenarios, such as mobile developers switching to Godot and PC developers switching to other engines, such as Unreal Engine, and those who can develop their game engines, are still being discussed across the industry.
What do the industry professionals say?
It is clear that all these changes will affect mobile developers who do not charge for downloads and focus on generating revenue through LTV more than PC / Console developers.
Serkan Özay, Co-Founder of Hero Concept, known for Mayhem Brawler, agrees;
I see it more as a problem for mobile developers. For years, Unity has been picking off people making $200,000 a year and forcing them to switch to Unity Pro. This figure even includes salaries, office rent, and other technical expenses. So, if you have a business with $200,000 in annual revenue, you already have Unity Pro (even if you don’t want to), and with Pro, the cap is already 1,000,000 downloads/revenue. When you earn that figure, Unreal starts to get money anyway.
Wojciech Mazur, Head of Game Management, SuperScale adds;
We’re surprised to see the recently announced changes from Unity in their pricing plan and the addition of a Unity Runtime Fee on top of the Unity subscription plan. There are a lot of uncertainties regarding this topic, especially on the details of how it will affect service providers who are supporting the game creators in their development efforts, but – if implemented in the currently announced form – this change will surely have a big impact on the whole industry. Costs for small and mid-sized studios will seemingly increase dramatically, and it seems this will kick start internal debates as to whether it’s a good time to look into alternative solutions. Personally, I’m looking forward to Epic’s response, as that’s a great opportunity for them to expand their Unreal Engine coverage in the mobile segment of the gamedev market.
Christian Lövstedt – General Manager | Midjiwan AB adds;
To be frank, the announcement from Unity is astonishing. Developers of all sizes face confusion – rather than celebration – if their game succeeds, with budgeting and forecasts turned on its head. Confusing messaging from Unity has resulted in u-turns. Sure, charity bundles have been labeled exempt, but how will this be tracked? Without answers, Unity will face a growing mistrust from the developer community as alternative engines are explored.
Yahsir Qureshi, VP, Head of Studios, Sandsoft, adds;
Unity’s new Runtime Fee, combined with its existing fees and revenue cuts, will cause a significant shift in the games publishing landscape, given the company’s market dominance. The negative reaction from the games industry and investors means Unity needs to act quickly to further clarify these changes, and perhaps even refine or revise parts of the new policy. Unity’s decision will have wide-ranging impacts. For example, publishers have used emerging markets like MENA market to test their mobile titles, due to the high number of downloads they can get. These markets are now in danger of being deprioritized due to the costs involved in acquiring installs from them. Meanwhile, genres like hyper-casual and casual, which rely on acquiring a large user base to generate substantial ad revenue, may now be unviable especially for indie developers and smaller studios. Another issue is that it’s not entirely clear how installs will be calculated through Unity’s “proprietary data model”, leaving the new policy open to potential abuse, loopholes and restrictions. Following this announcement, developers may seek out alternatives like Unreal Engine, open-source options or even their own proprietary engines, which could now be more financially viable.