Unity is probably overvalued, and if its plans to reshape itself into a viable long-term business, it'll probably have to eat a bunch of share price drops.
Taking a quick peek at the Q4 shareholder letter, it doesn't really look like any of their belt tightening has really taken hold yet. 2023 Q4 has broadly similar operating expenses (R&D, S&M and G&A) as 2022 Q4. 2023 Q4 revenue barely up when you exclude the one time WETA release. Overall, Unity is still very much in the red.
2024 will be interesting to see.
I really hope they get acquired sooner rather than later, before they pivot to a stripped-down mobile-only engine or something.
And TBH, the 'chasing AAA' strategy was one of those things. IMHO Unity would actually be better off if it did focus on mobile. That's where the money is, where they are established, and where they don't have much competition.
As a hobby game dev using Unity, there are plenty of issues with it. But I doubt hiring more people and throwing more money on it will solve them at this stage.
Seems like they are mainly focusing on cutting that.
I had to check whether they mean the same Unity I know. I could've sworn they're in the game engine business. But maybe this confusion is why the downward trend started in the first place ;)
Seems like this would have been a stellar business without the hassle of going public. How did they fuck this up? All they had to do was keep customers happy and collect money.
> Software developer Niantic released Pokémon Go, which was built using Unity engine, in 2016.[26] Following the success of Pokémon Go, Unity Technologies held several rounds of funding that increased the company's valuation: In July 2016, a $181 million round of funding valued the company at approximately $1.5 billion;[26] in May 2017, the company raised $400 million that valued the company at $2.8 billion;[27] and in 2018 Unity's CEO confirmed a $145 million round that valued the company at approximately $3 billion
Seems like investors wanted an exit, so public they went. I could be wrong. Maybe someone can provide better insight if I'm wrong or this isn't the complete picture.
For sure it's a great product, but the truth is that it was subsidized by vc capital and is not a sustainable business
The debate is around is it worth $5 billion or $50 billion. It's not as easy as one might think to figure which.
Imagine a bank suddenly told all customers 30% of their saving will be taken, then backtrack. Only an insane/ignorant person will stay with them.
Only thing that I can think of is public ousting and crucifixion of leadership, followed by some strong legal protection of current engine's fees for X years into the future. To build the trust back.
What other options they had when they massively overhired during 2020 and 21? At this point 25% is probably not even remotely enough
