U - Unity's CEO Is Out After Runtime Fee Train Wreck
2023-10-10 09:37:43 ET
Game engine developer Unity Software (NYSE: U) has built a popular platform for game development and other graphics-intensive tasks, but it's failed to translate that popularity into profits. The company generated $533 million in revenue during the second quarter, along with a $193 million net loss.
Unity generates revenue from subscription plans. While the platform is free to use for those who don't meet certain revenue thresholds, those who do need to shell out at least $2,040 annually for the Unity Pro plan, or much more for an Enterprise plan. The company also offers a variety of services, including in-game advertising.
This subscription business model with a generous free tier ensures a healthy pipeline of potential customers, and those who commit to using Unity's platform are unlikely to jump ship in the middle of video game development. There's a bit of a network effect that benefits the company. The more popular Unity is for game development, the more likely a developer is to choose Unity for a new game. A larger developer base means more resources and more support to help new developers get going.
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Unity's CEO Is Out After "Runtime Fee" Train Wreck