The Late Stage of Game Engines Is Here
While I was away in Chicago attending VCF Midwest, Unity decided to release what is potentially the most idiotic, customer hostile price change in the history of middleware. They’ve since clarified things they should have from the start with a needlessly large and confusing FAQ, but many of the core issues that infuriated developers remain, the worst of which is their continuing refusal to disclose their black box algorithm that determines how many installs a game has, and how they intend to collect that information without violating various privacy laws.
If you want more discussion about this and what the industry is having to think about right now, watch this excellent analysis from Hoeg Law.
The vast majority of all games that ship these days use one of two engines: Unity or Unreal. Some large publishers will use their own in-house engines and there are many other smaller options, but they’re niche at best in comparison to these two juggernauts. Developers like them because they’re easy to work with, have huge asset and plug-in marketplaces, they have tons of resources to learn and because so many know them, it’s easy to staff up a Unity or Unreal equipped project quickly.
Despite this seeming position of strength, Unity is not a successful company. They have consistently failed to turn a profit and though their losses are shrinking, they’re still deep in the red. Their main competitor Epic Games is private, but by all accounts, was very successful even before striking gold with the baffingly successful Fortnite, so it’s not simply that there’s no money in engines. So then, how can Unity possibly be so underwater?
A big part of it is that in the last several years, they’ve been on a buying spree, hoovering up other middleware and tools companies, often at crazy high valuations. Many of these acquisitions are of companies that have nothing to do with their core business, like Weta Digital and Parsec, followed up by a merger with IronSource, whose primary business prior to this has been classified as malware.
Epic has been on a similar buying spree, though seemingly more focused on the middleware aspect. One could rightly assume that these are the kinds of companies they would want to buy up, as they can bolster existing offerings. However, several developers I’ve spoken to have said that these tools either get poorly integrated into Unity (one referred to them as just getting glued on), and others just remain their own separate things. A lot of these buys seem like they’re being made out of an arms race mentality, which can be good, but not if it causes financial hemmoraghing, even when you’re one of only two engines that dominate everything.
Unity is run by John Riccitiello, a corporate executive who spent most of his career in the chemical, snack food and sporting goods industries before joining the game industry to run EA. No, I’m not kidding. The industry used to think that selling junk food and golf accessories translated into being able to sell video games. He actually ran EA twice, the second time in which he resigned in disgrace, after leading it to years of terrible financial performance.
He then joined Unity and raised a ton of money for them, which he’s been throwing in a furnace ever since with both acquisitions and trying to expand the company into non-gaming fields, which has largely proven unfruitful. Many believe these pricing changes are done in aid of taking Unity more in that direction and leaving the games industry only to those who can afford to pony up big bucks.
Everything about this new change screams corporate desperation from a clueless CEO who doesn’t understand his customer base or why his company’s core product became so successful to begin with. He also seems to have grossly underestimated the tolerance levels for this from the game dev community, many of whom have already committed to dump Unity going forward, especially since Epic’s terms are much more favourable and once you’ve learned one engine, it’s not terribly hard to move your skills over to another. There are limitations to this, such as Unity’s vastly better capabilities for 2D game creation, but there are options for that too, though they come with their own challenges.
Of course, on the other side you have Epic Games, who are 40% controlled by Tencent, a corporate puppet of the CCP, and one of the most evil companies on Earth. They’ve engaged in numerous anti-competitive practices of their own, while claiming others do the same, even as they violate contracts with them. Not exactly a shining pillar of virtue there either. Despite this, one can’t deny the incredible power and easy of use of Unreal Engine, nor how much better Epic’s financial terms are than Unity’s now.
Unfortunately, the game engine business is reaching its natural capitalist end state. There used to be a many large competitors in the space, but they’ve either faded to obscurity or just left the business entirely, widdling down the major choices to just two. If you’re someone who doesn’t follow the game industry like I do and just wants to play games, you may see this as a problem between businesspeople that doesn’t have much to do with you. That’s a fair point, but it’s important to remember that the harder and more expensive games are to make, the less innovation we’re going to see. Competition breeds excellence, monopolies breed stagnation. As I said, there are alternatives to Unity and Unreal available, but not ones that can operate at the scale needed by today’s development community and making a new one that can punch at the level of the “big two” is going to be near impossible.
Personally, I think John Riccitiello is approaching Phil Harrison levels of failing upward in the games industry and should be run out of Unity on a rail by its board before his incompetence burns the whole place down. If the game dev community doesn’t stick to its guns and truly boycott Unity in large numbers, I don’t see that happening though. I’m not a game dev, but I do know how hard the practicalities of this are based on talking to some. Standing up for what’s right can often be a real hardship, but those are sometimes needed for the greater good. I hope Unity wakes up and rolls this back further than they already have, otherwise I think the future of the industry that makes most games possible is a dark one indeed.
