Unity Technologies

Performance indicators

In 2019, Unity received a net loss of $163.2 million, while a year earlier, cash losses were measured at $131.6 million. Revenue during this time rose by 42% and reached $541.8 million.

History

2024:25% of employees laid off due to lack of money

On January 8, 2024, the developer of the most popular multi-platform game engine Unity announced a comprehensive restructuring, in which the number of personnel will be reduced by 25%. The need for such major staff cuts is linked to a lack of money and corporate change in general.

In a statement, Unity said the company could not "reasonably estimate" payments and other costs related to the reorganization program. It is known that approximately 1,800 people will lose their jobs. The main costs will fall on the first quarter of 2024, and all dismissed employees will receive payments due to them. The cuts will affect all teams, regions and business areas. This is the fourth round of layoffs that the company has been conducting since July 2022.

Unity announces comprehensive restructuring

In October 2023, due to the scandal with the Unity Runtime Fee commission, John Riccitiello left the post of president, CEO, chairman and member of the Unity board of directors. A month later, the company told investors it would conduct a "comprehensive evaluation" of its product range and financial analytics for the business. In addition to abandoning certain projects, Unity would reduce headcount and reduce office space, it said.

Against the background of the scandal, there were changes in the top leadership team. James Whitehurst, former CEO of Red Hat, was appointed interim CEO of Unity, while Roelof Botha, a leading independent Unity board member and partner at Sequoia Capital, became chairman. In general, layoffs and other corporate changes are expected to lead to a "complete reboot" of the company, which will improve operations, financial performance and internal structure.^[1]

2023

Closure of two offices in the United States due to threats to kill employees

In mid-September 2023, it became known that Unity Technologies, the developer of the game engine of the same name, was forced to close two offices in the United States due to threats of killing employees.

The scandal erupted after Unity announced the introduction of a new pricing policy for developers on September 12, 2023. From January 1, 2024, the Unity Runtime Fee commission will begin to operate, which is calculated based on the number of actual installations of a game on the Unity engine and revenue from the sale of the product. So, for Unity Personal and Unity Plus licenses, the values ​ ​ are 200 thousand installations (for the entire time) and $200 thousand (for the last 12 months). In the case of Unity Pro and Unity Enterprise, the indicators are set at 1 million installations and $1 million. The maximum commission is at $0.2 per month per installation.

Unity Technologies forced to close two offices

These changes have sparked heated discussions in the developer community. Some video game makers have accused Unity of violating its own licensing terms. Other teams have stated that in the future it will not be financially feasible for them to sell games on the Unity engine. Developers openly oppose changes in the Unity forums and beyond, with many talking about their intention to switch to another game engine.

As a result, threats rained down on Unity, and the company itself had to close offices in San Francisco (California) and Austin (Texas) for security reasons. In addition, the planned meeting of Unity CEO John Riccitiello with employees has been canceled.

The company learned of the potential threat to some of our dealerships and took immediate preventive measures to keep employees safe, Unity said in a statement.[2]

Dismissal of 8% of employees after years of losses

Unity Software, the creator of Unity's most popular game engine, announced a restructuring that will reduce headcount by about 8%. The corresponding notice on May 2, 2023 was published on the website of the US Securities and Exchange Commission (SEC).

The documents say the reorganization will affect "individual teams" and that the layoffs will help the company provide opportunities for "long-term and profitable growth." Which departments will suffer is not specified. But it is known that in total, about 600 people will lose their jobs. In connection with this initiative, Unity expects to incur costs of approximately $26 million: the bulk of these funds will be used to pay compensation and severance pay to dismissed employees.

Unity fires 8% of employees after years of losses

The announced headcount reduction is the third and largest round of layoffs the company has carried out since 2022. In particular, according to a report by The Wall Street Journal, Unity cut 284 jobs in January 2023 and approximately 225 jobs in June 2022.

The layoffs will affect some middle managers and will be part of a restructuring to put more people under fewer managers and thereby smooth out the company's hierarchy, said Unity CEO John Riccitiello.

It is noted that Unity reduces the number of employees not only due to the worsening economic climate and the crisis, but also due to duplication of functions as a result of the merger with IronSource in 2022: this deal cost $4.4 billion. The company is also taking other measures aimed at optimizing business operations and reducing costs. In particular, the number of representative offices on a global scale will be reduced from 58 to less than 30.^[3]

2022

AppLovin bought Unity for $17.54 billion

On August 9, 2022, a company AppLovin specializing in game development software announced the purchase of Unity Software for $17.54 billion. The buyer will pay $58.85 for each Unity share, a premium of 18% to Unity's August 8, 2022 closing price. Unity will own 55% of the combined company's outstanding shares, representing about 49% of the total voting stock.

AppLovin has engaged its consultants to prepare a commercial offer after Unity said in June 2022 that it intends to acquire IronSource in a deal to buy all shares for $4.4 billion. Unity's board will reportedly have to cancel its purchase of ironSource if the company wishes to continue merging with AppLovin.

Both companies produce software used to develop video games

Under the proposed deal, Unity Chief Executive Officer John Riccitello will take over as CEO of the merged company, while AppLovin Chief Executive Officer Adam Foroui will take over as chief operating officer.

Unity said its board would evaluate the proposal.

Both companies are engaged in the creation of software used to develop video games. Game-making software is also evolving thanks to new technologies such as metaverse, or immersive virtual worlds.

The proposed price for Unity seems far below its intrinsic value, and we expect Unity to reject it for that reason, wrote Michael Pachter, an analyst at Wedbush Securities. We believe that interference in the acquisition of ironSource is problematic and will cause Unity's board to proceed very carefully before agreeing to a sale.[4]

Purchase Ziva Dynamics Virtual People Software Developer

On January 24, 2022, Unity announced the acquisition of Ziva Dynamics, a company dedicated to the revolutionary creation of digital characters. The Grishin Robotics Foundation Dmitry Grishin leaves the capital of the software developer. Read more here.

2021

Buying special effects studio Weta Digital

On November 9, 2021, Unity Software, known for developing game engines and tools for creating 3D content, announced the purchase of special effects studio Weta Digital by famous director Peter Jackson. The transaction value was $1.6 billion. Read more here.

Purchase of Parsec Cloud Remote Desktop Service Provider

On August 10, 2021, Unity announced the acquisition of remote desktop service provider Parsec Cloud in a deal worth $320 million. Read more here.

2020: IPO: Raising $1.3 billion and capitalizing at $18 billion on day one

On September 18, 2020, Unity made an IPO by listing its shares on the New York Stock Exchange. The company sold 25 million shares at a price of $52 apiece (this is above the originally named range of $44-48), which made it possible to raise $1.3 billion.

By the close of the exchange on September 18, Unity's quotes soared by almost a third relative to the IPO price and reached $68.35, and the market capitalization of the game technology developer exceeded $18 billion.

Shares of the company are traded under the ticker symbol U. IPO orders are usually made by phone, but this time the company's underwriters - Goldman Sachs and Credit Suisse - used an online system for requests from investors to get a more accurate idea of ​ ​ demand, CNBC reports.

The creator of the platform for the development of 3D graphics Unity went public

In addition, Unity management allowed employees, with the exception of top managers, to sell up to 15% of their shares on the first day of trading, and not wait for the expiration of the required 180 days of blocking. Workers with options can sell their shares until September 30, 2020. Usually, a blocking period of six months is necessary so that there is no oversupply on the market, the TV channel notes.

By September 2020, Unity's largest shareholder is Sequoia Capital, with a 24.1 percent stake. In second place is Silver Lake, a private equity company (18.2%).

According to Unity's own data, by September 2020, about 1.5 million game developers, artists, engineers, designers and architects use the company's platform every month. The number of downloads of applications created on this platform exceeds 3 billion per month.^[5]

Notes