They didn't earn $544M, they had $544M in revenue. They lost $124M but it's all due to their decisions. They have a great operating margin in the 60s and spent all the money elsewhere.
What are they spending all of it on? Because it certainly not updates to the engine.
420M in profit is still way too much to be laying off people
The didn’t make 420m in profit, they lost 124m.
Revenue is not profit.
Revenue is income. Profit is how much they made after some expenses.
Revenue is how much you sold stuff for. Profit is how much did you make after paying for everything to run your business. They got $544M but spent $668M, so they didn't make a profit.
Well after their pay-per-download debacle, their latest quarter's earnings may not be indicative of the shit that is coming down on them. There are dark clouds on the horizon for Unity.
The best programmers there probably see the writing on the wall. The best small game dev studios will also.
I think unity is going to see a big quality drop even if it manages to get out of this death spiral.
And I'm still curious if they'll get targeted by regulators for the anti-competitive shit that started this (the whole thing was intended to strong arm developers into using their ad platform to get an exemption from the new pricing model and put a rival ad platform out of business).
I work at Unity. The brain drain is for real. It started 2 layoffs ago and is picking up speed. My department lost some really valuable workers, because layoffs are imminent they don't let leads hire many replacements, and the resulting critical work gets dropped on people already doing full work loads. Some of the people my department has lost helped build core systems from scratch years ago so that intimate knowledge of those systems is just gone.
Thanks for commenting, it's interesting to get an inside perspective instead of just speculating.
Out of curiosity, how are they (executives/management) communicating about this whole thing internally? Like are they trying to downplay the impact of that screw up or are they being genuine in how they present the situation?
I can't get too specific on that one because people get fired for leaking meeting info (I'm hoping to keep this job for one more year wish me luck lol). But in my opinion the new CEO has been a lot more open about what's going on. He's very straightforward and has been engaging with us in a more human way than JR ever did.
No worries about not being specific, I was only expecting a general answer if any at all.
And that's good. Tough times at a company can lead to improved culture (at least for those who survive the layoffs). Best of luck to you!
Unity has over 7000 employees. When you compare it to epic with its 3000, it seems a bit much and rather ineffective.
Do you have any insight on this?
Unity tripled in size in like 4 years iirc. It is trying very hard to be a large company. Like the culture has been shifting from small company feel to big corporate feel for a while now (since before I joined). It still is clinging very hard to having small company feel though because that's the kind of culture almost everyone here was sold on.
As far as the efficiency of our size, I'm honestly not super sure. We've been multitasking a lot and have cut things in the past, like Gigaya. My department has always felt understaffed and I get the vibe that a lot of departments feel the same. I haven't talked to anyone that was like "my team is too big to function well". So if there is an inefficiency issue it is maybe a broad thing that could be hard to see from any one part of the whole. That said I work in a very specific part of the company and don't branch out a whole lot to other groups so my interdepartmental knowledge is limited.
Exactly. The colossal lost of trust is not easy to regain (if it can ever be regained at all) and that's will be a specter haunting Unity's economic performance for the years to come. I've seen so much outpouring of support for Godot and other open source / free game engines, and really hope that support continues.
Oh, it's dead, but the twitching hasn't stopped yet.
One more reminder that Godot exists and has been receiving a lot of praise for its intuitive user-friendly ui and design.
From their quarterly SEC filing.
We are dependent on the success of our customers in the gaming market. Adverse events relating to our customers or their games could have a negative impact on our business
Remind me, why did you alienate your customer base with a per install fee Unity?
Headline really feels like it's trying to imply unity is currently making a profit. They haven't been out of the red in a while. Businesses tend to die when they're bleeding money and there's no VC.
It's a bit more complicated than that. There are a lot of accounting tricks to be constantly making losses but end up cash flow positive.
I don't work or invest in Unity so I don't have a great understanding of their metrics but companies I worked at would constantly capitalize new projects to add expenses in the future. You can structure sales deals so a new feature is added late in the contract. That pushes revenue out, but you can collect more cash early.
If unity didn't do share buy backs this quarter, they would have a positive cash flow. Which points to they should be a profitable company but instead are using accounting tricks to post losses to lower tax bills.
They have to claw back the money they gave to their CEO when he “retired”.
Slow burn to death might not be so slow. Good riddance.
i guess the guy at the top just isn't getting paid enough yet
Its insanity, Unity is a good product. There is a place for it in reality. In any sane world this product would have continued to operate how it was and it would have benefited people. But since profits are attached everything will have to be ruined eventually. Unreal is next to bat.
That's really well said and an underrated comment here. In a sane world, Unity would "make a living" just fine. Another user commented on where they spent their margins, and my bet is that it's on bullshit. Executive compensation should be first to get slashed, and if anything they should concentrate on keeping the "golden goose" or core development team alive.
Yep they bought a good chunk of Weta Digital for some reason.
Allowing leaders to use profits however they wish has been a disaster. I don't know if it was codified into law, but when companies had to invest in R&D, and they had to invest in employees before drinking their own koolaid the world was a better place. Employees were taken care of, average people could thrive. Now its an open feeding trough everyone else is exempt from. The modern world only thrives with checks and balances, its proven that without them the powerful cannot be trusted.
My brain can‘t fathom how you can generate that much revenue and not be profitable as a game engine developer
It's because they keep buying random companies. Then weirdly there's those random companies don't make them any money, and so the obvious illusion is to buy some more random companies.
Yall forgetting about the shareholders first
The shareholders lost out too. They have never issued dividends and their stock has tanked. Stop spreading ignorance.
They didn't earn $544M, they had $544M in revenue. They lost $124M but it's all due to their decisions. They have a great operating margin in the 60s and spent all the money elsewhere.
What are they spending all of it on? Because it certainly not updates to the engine.
420M in profit is still way too much to be laying off people
The didn’t make 420m in profit, they lost 124m.
Revenue is not profit.
Revenue is income. Profit is how much they made after some expenses.
Revenue is how much you sold stuff for. Profit is how much did you make after paying for everything to run your business. They got $544M but spent $668M, so they didn't make a profit.
Well after their pay-per-download debacle, their latest quarter's earnings may not be indicative of the shit that is coming down on them. There are dark clouds on the horizon for Unity.
The best programmers there probably see the writing on the wall. The best small game dev studios will also.
I think unity is going to see a big quality drop even if it manages to get out of this death spiral.
And I'm still curious if they'll get targeted by regulators for the anti-competitive shit that started this (the whole thing was intended to strong arm developers into using their ad platform to get an exemption from the new pricing model and put a rival ad platform out of business).
I work at Unity. The brain drain is for real. It started 2 layoffs ago and is picking up speed. My department lost some really valuable workers, because layoffs are imminent they don't let leads hire many replacements, and the resulting critical work gets dropped on people already doing full work loads. Some of the people my department has lost helped build core systems from scratch years ago so that intimate knowledge of those systems is just gone.
Thanks for commenting, it's interesting to get an inside perspective instead of just speculating.
Out of curiosity, how are they (executives/management) communicating about this whole thing internally? Like are they trying to downplay the impact of that screw up or are they being genuine in how they present the situation?
I can't get too specific on that one because people get fired for leaking meeting info (I'm hoping to keep this job for one more year wish me luck lol). But in my opinion the new CEO has been a lot more open about what's going on. He's very straightforward and has been engaging with us in a more human way than JR ever did.
No worries about not being specific, I was only expecting a general answer if any at all.
And that's good. Tough times at a company can lead to improved culture (at least for those who survive the layoffs). Best of luck to you!
Unity has over 7000 employees. When you compare it to epic with its 3000, it seems a bit much and rather ineffective.
Do you have any insight on this?
Unity tripled in size in like 4 years iirc. It is trying very hard to be a large company. Like the culture has been shifting from small company feel to big corporate feel for a while now (since before I joined). It still is clinging very hard to having small company feel though because that's the kind of culture almost everyone here was sold on.
As far as the efficiency of our size, I'm honestly not super sure. We've been multitasking a lot and have cut things in the past, like Gigaya. My department has always felt understaffed and I get the vibe that a lot of departments feel the same. I haven't talked to anyone that was like "my team is too big to function well". So if there is an inefficiency issue it is maybe a broad thing that could be hard to see from any one part of the whole. That said I work in a very specific part of the company and don't branch out a whole lot to other groups so my interdepartmental knowledge is limited.
Exactly. The colossal lost of trust is not easy to regain (if it can ever be regained at all) and that's will be a specter haunting Unity's economic performance for the years to come. I've seen so much outpouring of support for Godot and other open source / free game engines, and really hope that support continues.
Oh, it's dead, but the twitching hasn't stopped yet.
One more reminder that Godot exists and has been receiving a lot of praise for its intuitive user-friendly ui and design.
From their quarterly SEC filing.
Remind me, why did you alienate your customer base with a per install fee Unity?
Headline really feels like it's trying to imply unity is currently making a profit. They haven't been out of the red in a while. Businesses tend to die when they're bleeding money and there's no VC.
It's a bit more complicated than that. There are a lot of accounting tricks to be constantly making losses but end up cash flow positive.
I don't work or invest in Unity so I don't have a great understanding of their metrics but companies I worked at would constantly capitalize new projects to add expenses in the future. You can structure sales deals so a new feature is added late in the contract. That pushes revenue out, but you can collect more cash early.
If unity didn't do share buy backs this quarter, they would have a positive cash flow. Which points to they should be a profitable company but instead are using accounting tricks to post losses to lower tax bills.
They have to claw back the money they gave to their CEO when he “retired”.
Slow burn to death might not be so slow. Good riddance.
i guess the guy at the top just isn't getting paid enough yet
https://www.theverge.com/2023/10/10/23911338/unity-ceo-steps-down-developers-react
The guy at the top actually just got booted, if you care.
So they’re getting paid to do nothing after burning all the company’s social capital. Unity have a very strange board.
Its insanity, Unity is a good product. There is a place for it in reality. In any sane world this product would have continued to operate how it was and it would have benefited people. But since profits are attached everything will have to be ruined eventually. Unreal is next to bat.
That's really well said and an underrated comment here. In a sane world, Unity would "make a living" just fine. Another user commented on where they spent their margins, and my bet is that it's on bullshit. Executive compensation should be first to get slashed, and if anything they should concentrate on keeping the "golden goose" or core development team alive.
Yep they bought a good chunk of Weta Digital for some reason.
Allowing leaders to use profits however they wish has been a disaster. I don't know if it was codified into law, but when companies had to invest in R&D, and they had to invest in employees before drinking their own koolaid the world was a better place. Employees were taken care of, average people could thrive. Now its an open feeding trough everyone else is exempt from. The modern world only thrives with checks and balances, its proven that without them the powerful cannot be trusted.
My brain can‘t fathom how you can generate that much revenue and not be profitable as a game engine developer
It's because they keep buying random companies. Then weirdly there's those random companies don't make them any money, and so the obvious illusion is to buy some more random companies.
Yall forgetting about the shareholders first
The shareholders lost out too. They have never issued dividends and their stock has tanked. Stop spreading ignorance.
Good.