New Unity fees are ‘critical to the foundation of the company,’ exec tells videogame developers

In a fireside chat not affiliated with Unity, Marc Whitten, when asked whose decision it was to announce the changes the way the company did, took full responsibility for the tone-deaf initial rollout of the fee structure. A contrite Whitten, who heads Unity’s
U,
-0.38%
Create division, which includes Unity’s game-engine and editor teams, admitted that he and his team did not listen well enough to feedback from users in the run-up to the Sept. 12 announcement.

After the close of markets Friday, Whitten said on YouTuber Jason Weimann‘s livestream that the new fee plan is not a short-term change, stressing that the change is “critical to the foundation of the company.”

During the webcast, Whitten said that no game with less than $1 million in trailing 12-month revenue or 1 million engagements will be subject to the fee.

Earlier Friday, Whitten posted the new fee structure, as well an apology to game developers, in an open letter posted on the company’s blog.

“For games that are subject to the Runtime fee, we are giving you a choice of either a 2.5% revenue share or the calculated amount based on the number of new people engaging with your game each month,” Whitten said in his letter. “Both of these numbers are self-reported from data you already have available. You will always be billed the lesser amount.”

Whitten also tried to clear up concerns over what the company defined as a legitimate download, owing to widespread concerns about what Unity would base its per-download fee upon. New to the update is a fee-estimating tool on Unity’s website to calculate what fees apply to a user.

Whitten also stressed that the revenue and user data is self-reported, meaning that a user will pay fees to Unity based on the data the user provides the company. The exec said Unity trusts users will self-report the correct data based on their terms of service, and that if a user is not paying the correct fees, the company will contact the user.

“The first time your game with our Runtime engages with a very legitimate user on a distribution channel, we use that as a count,” Whitten said, adding that multiple devices did not count against the download count.

For games created on Unity Pro and Unity Enterprise, Whitten said the Runtime fee policy will only apply beginning with the next Long Term Support version of Unity that will ship starting in 2024.

Under the new plan, games made on Unity Personal “will remain free and there will be no Runtime Fee for games built on Unity Personal,” the company said. The company also listed a summary of the program.

Earlier in the week, Unity shares fell as the company said it was “listening” to the backlash from game developers, after several switched off Unity’s ad monetization. That was in response to the announcement on Sept. 12 that Unity would be charging certain game developers a fee every time their game was downloaded.

Unity shares finished Friday down 0.4% at $31.61, having climbed as much as 2.8% earlier in the session. For the week, shares are down 13%, while the S&P 500 index
SPX
is down 2.9%. Year to date, Unity shares are up 10.6%, while the S&P 500 is up 12.5%.