Following the massive backlash caused by the new Runtime fee policy enacted by Unity Technologies for games made with its engine, the company has finally decided to correct course.
In a brief tweet posted a few hours ago, Unity said they ‘heard the feedback’ and are listening, talking to partners and the community to deliver changes to the aforementioned Runtime fee policy. More information will be shared in the next couple of days.
As a reminder, under the Runtime fee policy, Unity planned to monetize new installations after the game or application made with the engine had reached certain thresholds. This would be a one-time fee that didn’t apply to re-installs, trials/demos, web and streaming games, and digital copies distributed via charity giveaways. Installs made through subscription services would be paid by the owner of that service, such as Microsoft with Game Pass.
Even with all those caveats, nearly all game developers have condemned the new policy, threatening to switch to Epic’s Unreal Engine if Unity did not revert their plans. However, analysts have a different point of view. For instance, MiDia Research Senior Analyst Karol Severin highlighted in this blog post that there might be underlying issues within the games industry behind the idea of the Runtime fee policy. Here’s an excerpt:
The combination of the saturated attention economy and entertainment industry KPIs having gradually shifted from unit sales towards time spent (especially in games), alongside high inflation and interest rates, are showing its teeth.
Simply put, the number of games (and developers) has been growing faster than the industry revenues. Furthermore, revenues are increasingly tied to time spent (due to the rise of F2P and live ops), which puts a very real limit on future growth prospects of the average developer. This is because there is simply no incremental available time to gain – others need to be dethroned to maintain growth of time spent. Similar to what happened in music with artists, this is now happening with developers in games. There are more mouths to feed, but not proportionally more food with which to feed them.
Meanwhile, time-spent-centric business models mean that games are not competing with just games (like they once used to), but with other entertainment propositions for the limited 24 hours of the day.
To be clear, this is not to say that the approx. $200 billion games industry is going away. But, the growth heyday of the games industry is over, and consolidation in the developer and publisher landscape is inevitable.
It is doubtless that there are too many games and game developers in the current industry and consolidation is inevitable, not just for big companies but for smaller ones, too.
Still, today’s news suggests that Unity Technologies may be at least willing to meet its developers halfway. We’ll know more once the full details have been shared.
