Intro
Unity have announced a new fee which they call the “Unity Runtime Fee” which is going to take effect in January. It affects all Unity developers, even people that have already released their game many years ago; which has caused mass outrage among the game development community.
I think the existing model states that once you reach a threshold of revenue, you have to pay a licence fee which works out around £1500 for the year. With the new model, once you reach a similar threshold, Unity is now going to charge a fee of 20 cents every time somebody instals your game on a new device for the first time.
The threshold is $200,000, which on the face of things, 20 cents per install doesn’t sound unreasonable when they have given you a great tool to help you create your game. They need to earn money as a business and deserve some kind of cut for their service/product. According to this tweet, it looks like they are burning through money so some drastic action is probably required
https://x.com/georgebsocial/status/1702696194558816751?s=20
There’s a fair few aspects of why this is new model is complicated, but I still feel some of the anger is misplaced.
I think the whole scenario is similar to what I have written about recently where the CEO demanded we release our software weekly instead of monthly and we told him several reasons why it is technically, and legally impossible. Then later he then demands all our changes have a well-documented rollback plan, and again, we told him loads of reasons why it wasn’t possible. He still insisted and looked like a fool when it backfired and caused a few problems he thought he was solving.
The main Problem
The core problem stems from the idea that it is based on installations and not based on Unit Sales or Revenue. For comparison, the main competitor, Epic Games’ Unreal Engine charges you five percent of your total revenues after you’ve earned at least a million dollars on your game. Now, that can work out to be a lot of money and especially in the long run if your game is successful, but the difference is that they’re taking a cut of your money that you’ve already earned. When Unity charges you for an installation you’re being charged whether or not you’ve earned any money, or at different period of time to where you earned the money. That could turn into a cash flow problem.
Collage of abuse:
https://x.com/LiamSorta/status/1702325745610338646?s=20
Theoretical scenarios
Once you’re over the threshold, if somebody bought your game a long time ago and they’ve now installed your game on their brand new computer, it’s going to cost you 20 cents. I suppose if it is an old game, you probably won’t be selling $200k over the last 12 months, so it’s probably not actually going to apply.
If you decide to port your game to a new platform which is often fairly easy in the Unity engine, then all those new installations are also going to be hit with fees. I suppose if you are re-selling the game then it’s not a major problem, but sometimes developers make a free-to-play mobile version. Then you make money later with microtransactions. Often these games have 90% of players not paying a penny, but then you make your money on the 10% who often spend big. In this case, you could end up losing money on the average player of your game.
People also raised the point of bundles like the Humble Bundle where people buy a bunch of games for a small price but some of the money goes to charity. You end up selling high volumes but gain very low revenue. If you hit the threshold, and you are more likely to with a sale like this, then you could be hit with a lot of fees. I think the interesting thing with this point which people don’t seem to be mentioning; is that people often buy these games then never actually play them. So you actually have a sale, but no install, so don’t pay the fee.
Fairly similar to a bundle is a service like Xbox Game Pass, where people could play your game with an overall payment to the provider, in this case Microsoft. I think Microsoft often pays a flat fee to the publishers to gain their games but I suppose contracts can vary. But the theory is, you could get a flat fee, then either get low instals so you’ve gained, or get a surprisingly large amount of instals if it is popular and it eats into your profits.
Piracy
People who pirate games don’t pay but do install your game. This means that every time your game is pirated you’re going to be slapped with a 20 cent fee. There can be other malicious ways you could be charged, if someone abuses Virtual Machines. There’s programs that will spin up large numbers of them, so you could “Install Bomb” quickly with virtual machines, hitting the developer with a 20 cent fee. It’s like when people “Review Bomb” where you leave loads of negative reviews on a game you don’t like in a coordinated way, but in this case you need fewer people, and they directly sap the revenues of the developer instead of just hurting their online presence.
Target Price
Unity has always positioned itself as being pro Indie. They want to help new aspiring Indies learn to program, break into the gaming market, and get their career started. New developers are also much more likely to sell their games for cheap. There’s a lot of games like this on Steam which are sold for £10 or loads for £5 or less, and that’s before you apply discounts. Steam is renowned for its high discounts in sales, and so these games are being sold for just a couple of pounds. They’re going to be disproportionately hit by having to pay Unity 20 cents every time the game is installed.
In the extreme case, imagine you’ve made a Steam game or a mobile game that sells for one dollar and then you pay a sales tax of 10-20%, then Steam takes 30%, then you know you’re left with around 50 cents. If you use a Publisher, then they will take their cut too. Then Unity takes 20 cents of it for an install and then maybe another 20 cents for another install, then you could be left with basically nothing. You could then lose money if it isn’t sold for full price.
Meanwhile, if you sell a premium game for £40+ then 20 cents is nothing. So it actually hits the indies harder. Unity have ways of getting the price per install down, but they look more aimed at larger companies who will want to pay the upfront fees to use the premium Unity features.
Patch Quest
Lychee Game Labs’ Patch Quest released on 2 March 2023 and so far has reached 182,594 total key activations on Steam (people who bought the game on Steam along with everyone who got the game elsewhere like in a bundle or a giveaway or for review purposes). So if the game keeps selling, or people install on more devices, then he will be taken over the threshold then would start being charged. He did remark that “for the sake of argument, every single person who already owns the game decided to install it on a second PC, I’d be hit with a charge of $36,400. Now it’s obviously not likely that this would happen” but it does make you think how Unity are gonna deal with these outliers.
Unity Response
Within the day of the announcement, there’s a lot of angry people, and Unity has tried to clarify the points raised. However, it’s not clear if it’s actually possible to do what they claim. They reckon they have some sophisticated fraud detection technology which can prevent the “install bombing”. Then they say that they will have a process for them to submit their concerns to our fraud compliance team. So from what I understand here it sounds like the onus will be on the developer to try and somehow keep track of how many of their instals are fraudulent and then if you have concerns, you contact the fraud compliance team, and then they will hopefully give you your money back. I think the majority of people don’t have a lot of faith in such a system when Unity have to put in some work to decide if they want less money from you.
https://x.com/thomasbrushdev/status/1702797688838775134?s=20
Unity have clarified that if you’re part of a bundle like Xbox game pass or you’re in a charity bundle then you’re not going to be charged for the install, although it’s not exactly clear how they’re going to know which instals come from charity bundles or game passes. They seemed to imply that for Game Pass, they would send the bill to Microsoft but I can’t imagine Microsoft will be too happy to have sprung upon them. It would probably have to be negotiated in future Game Pass deals and it might just be the case that Microsoft just doesn’t add any Unity-based games to their service.
Unity tried to justify this whole new fee structure by pointing to the thresholds and saying “if you don’t already earn loads of money on your game then you’re not gonna pay extra”. This is where I think a lot of developers are wrongfully attacking Unity, when they would never pay them anyway. I suppose in the Patch Quest example, I’m not aware of it being a major hit, and he has pretty much reached the payment threshold. But given that it’s been many months after release, you would imagine sales will now be low and he will only be liable for minor fees which he should be happy to pay.
Conclusion
There probably is a clause somewhere deep in Unity’s terms and conditions that says something like “we retain the right to change our terms and conditions”. Companies love to have that kind of future-proofing in their legal small print, but how many actually go through with major changes? It can be logistically difficult to implement drastic changes, and evidently a PR nightmare. However, despite that, many companies are against Unity for switching the Terms and Conditions with only a few months notice. When games can take years to make, you need that predictability to adequately budget, and if Unity can charge you more on a whim, then it’s unpredictable. People also wonder if they really can change the terms built on an older Unity software version as you essentially have an agreement at the time of release; but that needs to be left to the lawyers.
Switch Engines?
I think a key statement that many are using to justify their decision to abandon Unity at this time is “Is this the last time they’re gonna change their terms?
Jumping ship to another one might be possible when you’re just starting up on a new project but the deeper into development you get, the harder this becomes. Your game gradually ends up dependent on the engine it’s built in. Switching to Unreal Engine will require programming in C++ plus instead of C# which is a massive learning curve. Godot seems to be gaining popularity but people seem to say it specialises in 2D games at the moment. I think C# doesn’t have full support so their own GDScript is more popular.
https://x.com/TruantPixel/status/1702132911976194091
https://x.com/DarkestDungeon/status/1702378602895941837
References:
Unity Pricing Thoughts... For context, we are a small studio (7 people) with a Steam game with 3M~ players. I'm seeing many non-developers tell developers that this pricing change is not a big deal, here is why the entire community is lighting a fire: • Massively disproportionately punishes indies • Only three months notice • Double dipping (Licence fee/ads cut) • Dangerous precedence for charging "runtime"; you no longer fully own that exported build. If Unity continues to struggle, pricing could become more aggressive Here are a few examples: • Unity's own example on their site has a hypothetical scenario: -- $2M USD Gross in 12 Months -- 300k Users/month (200k Standard/100k "Emerging Market"), $23.5K USD/month -- This means $282K/Year in fees, 14% of gross revenue, 3x Epic's 5%. • F2P Games that are NOT excessively monetised are penalised: 10M Players:$1M USD 1M Players:$10M USD The first case, with a vastly less predatory set of MTX is now punished significantly worse than one purposefully building money-extraction machines. Our team has been hard at work for 2 years on a massive update to our game, with a F2P mobile ver coming next year. We built this from the ground up to be ethically monetised/for whaling to be impossible, so we are particularly unhappy with the news. This affects developers everywhere, of all sizes. I am grossly disappointed by any industry figures brushing this off as "developers complaining." that do not understand the severe damage this can cause smaller studios. Unity's trust within the games industry has been steadily eroding for years now, this latest change is a testimony to how horrendously mismanaged the board is. Personally dumped all of my Unity stock after this announcement was made. I'd bet heavily on the people making these decisions have never even opened the editor, let alone released a game. From <https://threadreaderapp.com/thread/1702189840383832408.html>