[HN Gopher] John Riccitiello steps down as CEO of Unity
___________________________________________________________________
John Riccitiello steps down as CEO of Unity
Author : AndrewKemendo
Score : 341 points
Date : 2023-10-09 20:46 UTC (2 hours ago)
(HTM) web link (venturebeat.com)
(TXT) w3m dump (venturebeat.com)
| Pulcinella wrote:
| Direct link to the Unity press release:
| https://investors.unity.com/news/news-details/2023/Unity-Ann...
| justinclift wrote:
| That's unexpected. The new CEO is a guy who led Red Hat
| (successfully) for many years.
|
| Not sure how he'll turn the Unity ship around, but his outlook is
| likely to be 100% in the opposite direction to the previous
| (dodgy) CEO.
| andrewedstrom wrote:
| It makes sense the CEO would either step down or be forcibly
| removed by the board.
|
| Unity's mishandling of the Runtime Fee policy announcement has
| caused permanent damage to their reputation. It was a perfect
| case study in how to undo decades of trust-building in one day.
|
| I follow a lot of game developers online. Every single one that
| uses Unity today is planning to switch engines for their future
| games.
| lofaszvanitt wrote:
| Nah, this was mass hysteria.
| bigstrat2003 wrote:
| It's not "mass hysteria" to observe that your business
| partner is willing to attempt to retroactively change the
| terms of your arrangement with them, and therefore decide
| they aren't trustworthy as a business partner. The actual
| monetary cost to developers is actually quite inconsequential
| compared to the lack of integrity Unity showed in trying to
| make this apply to games which were already released.
| starburst wrote:
| Nah, people in position of picking the engine for the next
| project are not going to pick Unity.
| sbarre wrote:
| At least one publisher jokingly (but not jokingly) said
| "developers: make sure you include which engine you're
| using next time you pitch us a game!"...
| readyplayernull wrote:
| When they tell you that you have to report your installs and
| sales each month just like you do your taxes, that's when you
| notice there are other free engines.
| sorenjan wrote:
| > I follow a lot of game developers online. Every single one
| that uses Unity today is planning to switch engines for their
| future games.
|
| Will all of them switch to Unreal, or are there other viable
| options?
| slikrick wrote:
| most of the 2d ones are looking to Godot
| ClimaxGravely wrote:
| I use Unreal professionally but on the side when I make
| smaller 2D games I am using Haxe/Heaps currently (although
| haxe/heaps can do 3d perfectly fine I'd probably stick with
| Unreal in that case due to experience).
|
| Godot seems to be the way people are going right now though
| (I haven't tried it).
| starburst wrote:
| The biggest share of Unity is 2D mobile games, something
| Unreal is not particularly suited for and I very much doubted
| that segment of the market will switch to Unreal.
| Luc wrote:
| Doesn't really matter if they're mostly indie game devs that
| weren't contributing major revenue to Unity anyway.
| drusepth wrote:
| In my spheres (full-time game dev), I've already seen ripples
| down to teachers/professors switching from Unity to Unreal in
| their courses. Many of the content creators I've enjoyed in
| Unity are also either switching or considering switching to
| another engine for their videos. Brackeys allegedly even said
| he might come back and start a Godot series. It's a long tail
| of ripples that reduces the number of "Unity devs" at every
| stage of their lifecycle (learning, starting out, graduating
| to small studios, etc) which doesn't bode well for Unity
| long-term.
|
| Most A/AA devs I follow are planning to switch to another
| engine when they can (e.g. not mid-project), but I know a few
| who immediately started porting to Unreal/Godot. Most AAA
| devs I know already don't use Unity.
| delecti wrote:
| Indies aren't limited to single-digit sized teams, and even
| if they were, devs "graduate" out of indie studios into AAA
| ones (through growth or migration). The skillset of the next
| decade of new indies deliberately excluding Unity will
| influence the decisions made by the AAAs that they move to.
| Anybody too small to be negotiating custom license terms with
| Unity just learned that they can't be trusted.
| paxys wrote:
| Remember that executives are never fired for bad decisions, they
| are fired for bad press. The Unity business model & strategy
| changes/price hike were most definitely approved by the board.
| The CEO's job was to make it digestible to the general public,
| and he failed at that. Don't expect the new one to pull a 180. He
| will simply hire better PR firms and do better sugar coating.
| drewcoo wrote:
| > The CEO's job was to make it digestible to the general
| public, and he failed at that.
|
| No. It was to either do that or be the scapegoat and take the
| golden parachute. Either way it's wins all around.
|
| Now he can be blamed for the board's decisions. Meanwhile it
| remains to be seen how much anything will change. After all,
| the cause of the problem is gone now, right? /s
| alexpetralia wrote:
| But who proposed those changes? Ultimately the CEO is
| accountable.
| paxys wrote:
| Unity has been hemorrhaging money, and the shareholders want
| to see profits. The board and the CEO have no choice but to
| execute on their demands.
| dboreham wrote:
| The board
| AlexandrB wrote:
| I'm not an expert on corporate governance, but does a board
| of directors get into the nitty gritty of pricing models? I
| can totally believe they told the CEO to "bring in more
| revenue, or get replaced", but I have a hard time imagining
| they got too involved in the details how that would happen.
| Many board members sit on multiple boards or are CEOs of
| other companies. Do they really have time to do the kind of
| market research you'd need to propose such a change?
| otteromkram wrote:
| Board members aren't doing research, bud. Lol
|
| Research and information is compiled for them, which they
| then review.
|
| What're your thoughts on politicians who are in multiple
| subcommittees? Not smart enough?
| hiatus wrote:
| Having been in board meetings where members went in on
| the nitty gritty of our _salesperson_ compensation
| structure, I would say yes.
| airstrike wrote:
| Public company boards?
| airstrike wrote:
| I'm an expert on corporate governance and I can say that
| no, boards do not get involved to the degree of making
| any market research -- they don't "initiate" initiatives
| such as a pricing model change (if you will pardon the
| redundancy). Public company CEOs come up with these
| plans. Boards do vet the executive's team business plan
| at the time of budgeting and during quarterly updates,
| but it's the CEO who is in charge of ideation and
| execution.
| airstrike wrote:
| Negative, it's the CEO.
| mvdtnz wrote:
| It is not the role of the board to make executive decisions
| like this. That's what the 'E' in CEO means.
| majani wrote:
| And it will fail again. Companies that target indie creators
| really don't fit into the VC model. Their customers will riot
| every time they try to maximize profits.
| theogravity wrote:
| Stock price is down 22% in the past month:
|
| https://www.google.com/finance/quote/U:NYSE?sa=X&sqi=2&ved=2...
| chx wrote:
| This is it. Bad press? Developer feedback? These, by
| themselves, are no concern to the board.
|
| But my man here lost three billion dollars of investor money
| and for that he needs to go.
| j_maffe wrote:
| what else would someone expect board members to care about?
| It's naive to expect otherwise, really.
| beigeoak wrote:
| I doubt this will end the scummy money grabbing thinking.
|
| https://old.reddit.com/r/unity/comments/16j23ci/i_know_peopl...
|
| The actual people who should be removed is probably the
| incompetent board of directors who signed on in 2020.
| cojo wrote:
| I have to say, the only thing more surprising to me than seeing
| the board actually hold Riccitiello responsible for this (with
| consequences) is seeing that their interim replacement /
| transitional CEO is someone with a pedigree that, on the surface,
| seems even more management consulting / investor / revenue
| focused than Riccitiello was himself.
|
| To be clear, I know essentially nothing about James M. Whitehurst
| other than what is readily publicly available (IBM / Red Hat,
| advisory roles, etc.).
|
| But my read on a lot of the Unity crisis, as a long-time game
| industry veteran myself, was that one of the increasingly common
| "management consulting" / investor- & revenue-focused type of
| gaming executives (e.g. Riccitiello, Don Mattrick [Zynga
| replacement CEO when Pincus stepped down], Kotick [Activision-
| Blizzard]) had finally overstepped their bounds and let revenue
| goals drive decision-making just a bit too far without customer
| consideration.
|
| So, I had assumed that if Unity did make a leadership change
| here, it would be in a direction away from that - i.e. a more
| industry-seasoned executive with less of a pure revenue /
| "business" focus.
|
| I think I clearly misjudged the situation here in light the
| Whitehurst pick; while it's possible that is truly just an
| interim role and they will still pivot to this in the final hire,
| or that I simply misjudge "the label on the tin" and Whitehurst
| is very culture / customer focused, I don't think I would bet on
| it. This seems like the board actually "doubling down" on driving
| revenue results - and fast.
| rapfaria wrote:
| Isn't Riccitiello stepping down a standard operation procedure
| in a situation like this?
| jmull wrote:
| I don't think you can really draw conclusions from an interim
| pick like this one.
|
| It's who they choose after the search that will tell you
| something.
|
| But things don't look good no matter who they choose. Unity
| _has_ to become sustainable... that, or go out of business.
| Their fundamental problem is somehow getting revenue and costs
| in line with each other.
|
| Here are some general ways that could be done...
|
| * Squeeze a lot more money out of existing customers * Get a
| lot more paying customers * Cut spending on things that impact
| revenue a lot less than the cut saves
|
| The first one is what the last CEO tried with that cockamamie
| licensing scheme. You could go at it in other ways but in the
| end the impact on customers is the same so I don't think the
| reaction would be a lot better.
|
| Is there any clear way to accomplish the second, at least
| without an even larger negative impact on revenue?
|
| For investors, cutting cost is the least desirable -- they want
| to grow, not shrink. And customers also don't like to get less
| for the same price. But perhaps there is a way to cut costs
| that would spare what provides the core value to customers, and
| perhaps a business guy could get shareholders to accept that it
| is the only way.
| ChuckMcM wrote:
| I concur with this, their interim CEO is the person who can
| do the needful things with respect to cutting executive pay,
| laying off people, and outright firing others. Once the
| organization has been pruned, the "real" new CEO comes on
| board and is given a shot at rebirth with a new point of
| view.
| Sakos wrote:
| I don't understand how their cash burn rate is so high that a
| billion in revenue isn't enough to stay in the black. What
| are they spending so much money on?
| HillRat wrote:
| I'd argue that what Unity needs is someone who's got a
| background in enterprise software, because selling to game
| _developers_ is very different than selling games. No one with
| (successful) executive experience in enterprise software would
| have signed off on Unity 's original revenue plan, simply
| because the number one rule in enterprise is "don't fuck with
| the customer's business model," which the "pay per download"
| model certainly did. Hiring a game industry CEO who pioneered
| predatory monetization models and was responsible for
| horrifying managerial practices within and between studios was
| a terrible choice for Unity, and his evident contempt for
| developers showed through often.
|
| Whitehurst, on the other hand, has a history of strong
| execution across multiple industries, and built a reputation as
| someone who protected Red Hat's culture against attempts from
| within IBM to "Big Blueify" it (possibly to the detriment of
| his own role within IBM). Even as an interim, having him
| onboard is a good sign for how Unity is looking to repair its
| relationships with developers.
| doctorpangloss wrote:
| > simply because the number one rule in enterprise is "don't
| fuck with the customer's business model,"
|
| On the other hand, the continued growth of gaming revenues,
| for both developers and services providers, compared to all
| other creative industries, is all attributable to innovations
| in business models. I suppose if people rocked the boat as
| little as you suggest, the only software being sold to game
| developers would be Denuvo.
| jzb wrote:
| I was at Red Hat while Jim was CEO. He's very culture focused
| and is an excellent choice for restoring faith there. He got
| great results while at Red Hat, but they plucked him out for a
| non-CEO role at IBM after the acquisition. IMO that has been
| IBMs greatest sin in its handling of Red Hat.
|
| Jim was active on memo-list and seemed to listen to people.
| That doesn't mean he's perfect, but I'd give him very high
| marks and I think that he had a lot of goodwill among Red
| Hatters as CEO.
| linuxftw wrote:
| I also worked under Jim. He managed to under perform the rest
| of the tech sector by an order of magnitude. He completely
| mismanaged the company with regards to the virtualization
| boom, just compare VMWare's revenues to Red Hat's. Red Hat
| OpenStack was and is an absolute awful product all the way
| around.
|
| What Jim did do successfully is destroy the actual FOSS
| spirit within the company. Everyone has Mac Books now. All
| the standard corporate welfare initiatives for liberal arts
| majors (Chief Diversity Officer and their ilk).
| NegativeK wrote:
| > Everyone has Mac Books now.
|
| I don't even work there and I know that this is, at the
| least, hyperbole.
| dralley wrote:
| I do work there and it's total BS, certainly as far as
| engineering goes. Maybe in marketing / sales / HR the
| story is different, but the overwhelming majority of
| engineering, support and QE (including the management
| chain) use Thinkpads with Fedora or RHEL.
| KerrAvon wrote:
| We can see the racism through the codewords. How about
| keeping it to yourself?
| gorjusborg wrote:
| What codewords would those be?
| fyrn_ wrote:
| GP doesn't exactly seem fun at parties, but calling them
| racist seems pretty extreme
| eraser215 wrote:
| I spotted that too. By contrast I'd prefer this person
| shouted it out loud without code so that everybody could
| see them for who they are.
| eraser215 wrote:
| Almost everything you said here is complete garbage.
|
| Underperform the rest of the tech sector? No... 70+
| quarters of successive double digit growth until the
| acquisition.
|
| Mismanaged the company with respect to virtualisation?
| You're conflating mismanaging the company with possible
| strategic errors in virtualisation.
|
| Destroy FOSS spirit? Absolutely the opposite. He is held in
| the highest esteem by every red hatter I have ever spoken
| to. Not only that, but he made the effort to do red hat
| training to learn the tech in the early days. How has he
| destroyed any FOSS spirit through his actions? Give an
| example.
|
| Everyone has macbooks now? No. Sellers generally do, I'll
| give you that, but technical staff are mostly using Fedora
| or RHEL. Flexibility has always been a huge part of the
| employee experience.
|
| Standard corporate welfare initiatives for liberal arts
| majors? You sound like an angry white man who can't stand
| that people other than yourself may have their disadvantage
| recognised nowadays. Stop feeling so threatened.
|
| Why are you so bitter?
| djmips wrote:
| I feel it's unfair to include Mattrick in here - he came up as
| a gamer, making games as a teen and rolling that into his own
| company so at least he has roots as a developer and I feel a
| dev/gamer connection but I respect your opinion.
| cojo wrote:
| I think yours is a fair opinion as well, to be clear - I
| actually debated editing him out for a couple of minutes
| after I first posted, because I do know that his background
| was truly heavy on the gamedev side of things early in his
| career.
|
| I have my reasons for thinking things changed later on, but
| they are subjective / personal opinion based on personal
| experience, so I respect anyone who would disagree and
| exclude him from a list like this.
| reactordev wrote:
| If anyone can save the stinking ship that is Unity, it's
| Whitehurst.
|
| This is said by someone who wants nothing more than to see
| Unity die.
|
| Whitehurst was pretty instrumental in getting Red Hat sticky in
| places where it was just RHEL. Open Shift, Open Stack, etc all
| drove value-add for the business and for their customers. Cloud
| is fickle though so selling tools to studios and trying to
| compete with Unreal in the VFX space is how Unity moves
| forward. Take your lashings from the game devs. Shore up your
| presence in VFX, Movies, Film. Evolve.
|
| The tsunami has squarely landed on Godot's doorstep. It will be
| up to them on how they manage the swell.
| doctorpangloss wrote:
| While I don't think you deserve to be downvoted for this,
| your comment is full of opinions that, as a game developer,
| sound 200% wrong to me. For the sake of curiosity... what are
| you talking about?
| reactordev wrote:
| I'm talking about Jim Whitehurst taking Unity in a
| different path and leaving us game devs the f#^k alone.
| We're done. Go sell to movie studios, VFX shops, Video Wall
| Warehouses, digital twin and construction. Sell enterprise
| software subscriptions.
|
| I think we both agree that small indie studios will not be
| returning no matter what promises are made, who is CEO, or
| what new shiny monetization idea they come up with next.
|
| I wish him the best of luck.
| doctorpangloss wrote:
| > I think we both agree that small indie studios will not
| be returning no matter what promises are made
|
| One thing I agree on: more often than not, behind an
| interesting piece of art lies an interesting personality.
|
| To advance the conversation based on some substantive
| facts, based on my conversations with creators of large
| free to play Unity games, all were already using
| IronSource and were not impacted by the changes anyway.
| As a game developer who publishes himself, I do not plan
| to migrate away from Unity, and I wasn't really impacted
| either. I can't speak for the 30 or so studios who posted
| pleas to revert the changes, but based on what happened,
| I believe they got what they wanted. So if their
| decision-making is rational / based on facts, I don't
| think they're migrating either.
|
| This is all to say that when you have no budget, so you
| value your time at zero and you have no visual art you
| didn't author yourself, it's easy to put 100% of the
| personality into the product, and make that The Thing.
| There are people I know who turned 20,000 followers on a
| TikTok about games into a $1m check for a game studio!
| This is a viable strategy, it is uniquely suited to
| people to have opinions about game engines. But my facts-
| informed opinion is that this isn't representative of
| most game developers, and that they are actually really
| happy with Unity and relieved that the pricing changes
| found a middle ground that is less emotionally charged.
| airstrike wrote:
| RedHat customers and Unity customers make for two very
| different types of beasts...
|
| It will be interesting to see how his Whitehurst's pedigree
| translates to this smaller-scale, higher-touch sales motion.
|
| Forgoing the core Unity audience of game developers and
| gunning for studios / VFX when Unity is clearly not the
| graphically superior engine sounds risky at best, reckless at
| worst.
| reactordev wrote:
| >"RedHat customers and Unity customers make for two very
| different types of beasts..."
|
| You misunderstand. They have different verticals but Jim's
| mission is the same. Sell them tools at enterprise
| subscription prices. Per seat, per project, per shot if
| they can. Forget the indie game devs and their small
| studios. That bridge is burned beyond recognition or
| reconciliation.
| airstrike wrote:
| I'd rather fix that bridge than bank on an non-existing
| bridge to enterprise customers with an inferior offering
| and no cash flow to meaningfully fund R&D to outpace
| competitors.
| Willish42 wrote:
| "doubling down" indeed...
|
| One possible interpretation of events is that he was ousted not
| for the initial proposal and backlash but precisely for how he
| backtracked after the fact -- perhaps the board gave a clear
| mandate and Riccitiello was unable to successfully change
| pricing structure to match financial expectations. That would
| explain the replacement.
|
| Things aren't looking great for Unity right now...
| cojo wrote:
| Yeah, I think this could definitely be one explanation.
|
| Other commenters in the thread have also given good thoughts
| / potential scenarios in similar veins - essentially that
| this was actually a failure of messaging, sticking to the
| plan, and / or both, plus some other combination of "no,
| seriously, we need to make money and become profitable,
| nothing else matters as long as the boat still floats, make
| it happen and keep this ship going."
|
| And I do suspect that Whitehurst will likely be a better fit
| for that. A seasons gaming industry executive (regardless of
| investor / revenue focus) may actually be a negative if
| that's the goal right now... I'll be very interested to see
| how this all turns out.
| strgcmc wrote:
| I think that's reading too much into, what is fundamentally a
| very normal and common way of dealing with CEO turnover --
| appoint a safe, business-friendly steward of a CEO, while you
| stabilize the crisis and decide who the real long-term leader
| should be.
|
| The word "interim" was clearly used, and there's no hint in
| the PR statement about this being a permanent appointment. So
| I don't think it's reasonable to equate this to a clear
| doubling down of anything.
|
| At the same time, a guy like Whitehurst is a safe, relatively
| unimpeachable medium term choice, not like someone you'd use
| for a truly short interim 30-90 days while you execute an
| executive search quickly. If you need him for 1-2 years of
| just don't rock the boat leadership, it'll probably work out
| fine for the company and the board would be satisfied.
| jameshart wrote:
| I'd be careful drawing too many parallels between running Unity
| vs running a game publisher.
|
| Unity is a developer platform/tooling company. They don't care
| about hits or franchises - they need service, stability,
| community, and technology innovation.
|
| Game publishers are creative industry plays, like movie
| studios. Completely different business.
|
| Of course Epic confuses things by being in both camps but I
| don't think Unity is confused that they are competing with Epic
| in the sense of needing to outmatch Fortnite.
| joecot wrote:
| I think back to Ellen Pao at reddit. Ellen was brought on as
| CEO, and was the face of a number of very unpopular decisions.
| All those decisions had one purpose -- jettison the things that
| made the site rough around the edges, and find ways to
| monetize, so they could make investors happy and work on going
| public.
|
| The backlash was staggering, and much of what they tried was
| rolled back. Ellen Pao took the blame for it, but it wasn't
| actually her fault. The founders just scapegoated her in order
| to make changes they needed for investors -- and depending on
| how cynical you are, they picked an asian woman so that they
| could channel internet racism and sexism as part of the
| distraction. Years later, they did the same thing, making
| multiple unpopular monetization changes, but this time the CEO
| taking the backlash is Steve Huffman himself, not a scapegoat
| put in front of him.
|
| CEOs don't make decisions on their own, not really. This
| pricing change was the direction the company wanted to go in,
| and they got put on their heels, but only temporarily. They're
| still going to try to find ways to aggressively monetize.
| tekla wrote:
| > they picked an asian woman so that they could channel
| internet racism and sexism
|
| Prove it.
| mvdtnz wrote:
| That is some incredible revisionist history.
| ribosometronome wrote:
| Elaborate?
| mvdtnz wrote:
| What is there to say? The decisions that OP says were not
| hers, were hers. And the claim that they chose an Asian
| woman for the intended purpose of setting a racist mob
| against her is completely unfounded and frankly racist
| itself. Believe it or not, there are some Asian women out
| there that have qualities other than being the target of
| racism.
| dralley wrote:
| Most of the decisions Ellen Pao made, especially the
| banning of the FPH subreddit, was genuinely for the
| better. She bent over backwards, IMO, to avoid the hate -
| and should not have.
| Waterluvian wrote:
| "with consequences"
|
| Depends how many millions he's accepting to walk away.
| ethbr1 wrote:
| Right now, I'd imagine Unity is more concerned about placating
| their investors that the company isn't going to fall off a
| revenue cliff.
|
| Appointing a "developer-friendly" candidate would have caused
| more uncertainty.
|
| As a temporary pick, I'd guess Whitehurst is intended to
| message "We realize we screwed up, but there won't be any
| sudden changes."
|
| The reaffirmed guidance for current quarter is hilarious
| though, given any changes would play out in future time (e.g.
| developer flight for next project).
| cojo wrote:
| Agreed - the reaffirmation of guidance almost felt to me like
| a "seriously guys, why are we down 22% up front, you know
| this doesn't impact short-term revenue..." which...
| definitely misses the point.
|
| It's interesting that after-hours / future trading doesn't
| seem to have responded positively (yet). Maybe that's just
| another symptom of lost trust as well.
| hackerlight wrote:
| > board actually hold Riccitiello responsible
|
| It could also just be a PR move. Riccitiello is disliked among
| Unity customers, so you get goodwill by firing him.
| airstrike wrote:
| Interim CEOs generally tend to be either a board member or a
| C-level executive that take on the role just to manage day-to-
| day CEO duties while the board searches for a more permanent
| replacement.
|
| In this particular instance, Whitehurst isn't a board member,
| but per the press release[0] he is a "Special Advisor at Silver
| Lake". Silver Lake is one of Unity's largest shareholders
| (~10%) and Egon Durban is on the board.
|
| EDIT: Also worth noting Silver Lake, along with Sequoia,
| committed an additional $1Bn into Unity at the time of the
| IronSource acquisition in the form of convertible notes with a
| conversion price of $48.89 / share[1], which is at a slight
| premium to the price at which Unity's stock traded then
| (7/15/2022) and at a meaningful discount to their current share
| price of $29.70 -- which supports the (admittedly speculative)
| argument that SLP's voice on that particular board is all the
| more prevalent today.
|
| --------------------
|
| [0]:
| https://www.businesswire.com/news/home/20231009494331/en/Uni...
| [1]: https://investors.unity.com/news/news-details/2022/Unity-
| Ann...
| cojo wrote:
| This is helpful context as well, in addition to doomlaser's
| explanation of his background re: IBM and Red Hat. Thanks for
| sharing it.
|
| I wonder to what extent Silver Lake drove this overall
| decision (vs. others on the board potentially initiating it)
| Spoom wrote:
| Ah, Silver Lake, of Skype acquisition and zeroing-out
| employee equity fame.
|
| https://www.wired.com/2011/06/skype-silver-lake-evil/
| 1-6 wrote:
| The most famous Interim CEO was Steve Jobs.
| readyplayernull wrote:
| He was also employee #2 and #0 at the same time, so Quantum
| CEO?
| hn_throwaway_99 wrote:
| Given the information posted about Whitehurst in another
| comment, https://news.ycombinator.com/item?id=37825689 , I
| strongly disagree with your assessment of him.
| cojo wrote:
| I agree!
|
| I posted before that comment, which was definitely helpful -
| that context (and some other helpful replies here and
| elsewhere in the overall thread) have changed my assessment
| as well.
| rat9988 wrote:
| "interim replacement / transitional CEO is someone with a
| pedigree that, on the surface, seems even more management
| consulting / investor / revenue focused than Riccitiello was
| himself. To be clear, I know essentially nothing about James M.
| Whitehurst other than what is readily publicly available (IBM /
| Red Hat, advisory roles, etc.)."
|
| To me, it seems he has plenty experience with managing
| companies.
| cojo wrote:
| I agree - this may be unclear phrasing on my part.
|
| What I meant in my original comment was, "wow, this seems
| like a hire that is _only_ focused on finding someone with
| lots of experience managing, and not at all on the gaming
| industry / customer goodwill".
|
| So I think you're right - and I also think this shows how I
| misjudged how I originally thought a scenario like this would
| have played out.
| beebmam wrote:
| Bring back engineer CEOs. I'm sick of this trash.
| amitmathew wrote:
| Wow...I wrote up a whimsical account of what could happen after
| the price increases. I got the timing wrong (I thought it would
| take several months for the CEO to step down), but some of it is
| starting to come true: https://quiver.dev/blog/stepping-into-the-
| unity-ceos-calfski....
| fyrn_ wrote:
| Didn't they only give some minor concessions, not actually roll
| back the pricing changes?
| crunkykd wrote:
| spending $4B for ironsource ads and $1B for weta authoring stuff
| was expensive and took lots of their more indie-friendly choices
| off the table. maybe the ipo path they took made these things
| inevitable. anyways, their choices are behind them now. godot and
| elsewhere are where the parade will move on to
| GoofballJones wrote:
| I'm just amazed it took this long.
| CoastalCoder wrote:
| I'll be curious if they can unring this bell.
|
| If nothing else, this reminded small developers how vulnerable
| they are in terms of negotiating power.
| eps wrote:
| If they bring back Unity's original co-founder and CEO (David
| Helgason) and restructure/debloat the company, they might have
| a chance of reacquiring some of the goodwill. People still want
| the "old", pre-IPO and pre-Riccitiello Unity back.
| jjoonathan wrote:
| They can restructure the company, but they can't restructure
| their incentives.
| doomlaser wrote:
| James M. Whitehurst is new CEO, previously at IBM, but originally
| CEO of Red Hat. He joined IBM after they acquired it.
|
| https://en.wikipedia.org/wiki/Jim_Whitehurst
|
| He wrote a book about open source software while running Red Hat,
| _The Open Organization_ : https://www.redhat.com/en/explore/the-
| open-organization-book
|
| He _is_ an MBA, but he got his undergraduate degree in CS from
| Rice.
| leviathan303 wrote:
| His wikipedia article says he got his BS in CS from Rice.
| Thorrez wrote:
| Has the comment been edited? That's exactly what doomlaser
| said.
| badRNG wrote:
| Whitehurst went to Rice University for Computer Science
| eskatonic wrote:
| "Unity would not be where it is today without the impact of his
| contributions."
|
| something something damning with faint praise...
| xyst wrote:
| No mention of his "exit package" or "golden parachute". Dude is
| going to be sitting pretty and then fuck over the next company.
|
| I'm surprised the board actually did something and held him
| accountable. It's a small step but this is a stain that won't be
| washed off.
| dev_tty01 wrote:
| Anyone else wondering if this was all planned? Maybe Riccitiello
| was planning to retire and the board asked him to play bad cop
| and announce the new fee structure. After he is gone they will
| announce something slightly more agreeable that will look good in
| comparison. Maybe I'm just too cynical...
| j_maffe wrote:
| I think you are, in fact, too cynical. They've already
| announced the new fee structure which is a lot more sensible.
| And before you go "that's how they wanted people to react to
| the final structure", there's no way how this thing unfolded
| came to the benefit of the company and they'd have been idiots
| if this was in any way the plan.
| pjmlp wrote:
| Finally!
| riscy wrote:
| > The news isn't a surprise as Unity angered a lot of its loyal
| game developers a few weeks ago after pushing through a price
| increase based on numbers of downloads -- and then retracted it
| after an uproar.
|
| I thought they only slightly adjusted the new pricing scheme due
| to uproar, rather than retract it.
| [deleted]
| foobiekr wrote:
| Amazing to see a CEO paying the price. I wonder if he got some
| kind of golden parachute.
| BackBlast wrote:
| Probably an unpleasant conversation with the board. Resign, or
| be fired.
|
| This is very likely covered in the contract to begin with so
| there isn't much room for negotiation unless the board feels
| he's breached some significant contract term.
|
| Nice to see a company really try to make it right.
| boeingUH60 wrote:
| He's sold over $400mn in Unity shares [1]. He'll be fine.
|
| 1- https://www.secform4.com/insider-trading/1193857.htm
| bigstrat2003 wrote:
| It's so messed up when you think about it. He made a decision
| (or at minimum allowed it to happen) that will most likely
| kill the company in the end. And he gets to profit handsomely
| from being fired for that bad decision.
| hotnfresh wrote:
| The notion of consequences & responsibility at this level,
| which is often used to justify high pay (see also: the idle
| investor class--"oh, they deserve huge returns because of all
| the _risk_ they're taking!") is so fake that the whole thing
| would be funny if people didn't seem to think it's actually
| real and meaningful.
|
| "Oh no, I had a terrible outcome and so... me, my children,
| and my children's children, at least, will continue to live
| among the oligarchs and attend oligarch schools and live in
| oligarch places and go to oligarch parties, being incredibly
| comfortable and wanting for nothing our whole lives."
|
| Please, give me those consequences. I promise it'll make me
| take everything super-seriously and do a very good job. Lord
| knows I don't want _that_ to happen to me. How terrible.
| wslh wrote:
| May be he doesn't know how to increase revenue without changing
| the terms and conditions and leave the position to someone
| else?
| gofixurcode wrote:
| If I were on the board I'd vote he gets a golden cannonball to
| the nuts.
| wkat4242 wrote:
| The board are just covering their own asses. I'm sure they
| were aligned on all the plans because the board represent the
| shareholders and those have super short term vision these
| days. It's a problem that plagues the whole industry.
| Exuma wrote:
| Or a golden parachute that's been slashed with a knife
| throwawayunity wrote:
| Unironically the best thing that could have happened to Unity.
|
| The dude is the definition of short-sighted management that
| caters to short-term shareholder gains at the expense of long-
| term value.
|
| Now if only they could undo their acquisition of IronSource...
| orliesaurus wrote:
| Well, what did you think was gonna happen...the stock tanked
| hard!!!
| wkat4242 wrote:
| This is not bad news for once. A new CEO could really bring back
| some goodwill. He was going about it the wrong way and with a
| poor attitude (referring to the idiots incident), the malware
| company acquisition etc.
| yownie wrote:
| I'm not familiar to the idiots incident could you summarize?
| kevingadd wrote:
| https://www.theverge.com/2022/7/18/23269218/unity-ceo-
| john-r...
| wkat4242 wrote:
| Yeah I know the overall context was not as negative as
| indicated.
|
| But someone who thoughtlessly refers to their customers as
| "the biggest fucking idiots" really has an attitude problem
| that goes deeper than he claims.
| Ajay-p wrote:
| What ...encouraged the initial decision to increase the price?
| Because I can think of a few examples of discouragement, such as
| the backlash against Reddit, that _should_ have given the
| executives an idea of what _could_ happen as a result. Yet they
| went through with it which makes me think:
|
| a) the company truly believed people would pay;
|
| b) _They believed_ that the fallout would not be _that bad_ ; or
|
| c) Worst case, they did not consider fallout at all and just said
| raise it.
| Macha wrote:
| Honestly, Reddit just kind of sat out the backlash and at least
| in the short term got their way. So it's one loss for wizards,
| one win for Reddit, I could say them rolling the dice on 50/50.
|
| But they overestimated how locked in their customer base were
| and how much more resourced game developers were to challenge
| them on their shenanigans than third party Reddit app
| developers.
| nyanpasu64 wrote:
| I've largely left Reddit since they backstabbed third-party
| apps and frontends, and seized subreddits and banned
| moderators protesting their decision. Checking
| https://subredditstats.com, many subreddits (ranging from
| smaller ones like CRTgaming, to larger ones like funny) have
| had comment volume drop off by 75-90% in July 2023 with no
| sign of recovering. So assuming Reddit isn't
| throttling/blocking subredditstats from viewing comments (and
| making itself look bad), I'd say people _are_ leaving Reddit,
| but unfortunately I 'm not sure if any of the community-run
| alternatives are as popular as Reddit is now (or was before
| the user exodus).
| bsder wrote:
| > So it's one loss for wizards
|
| I'm not quite sure about that.
|
| A _lot_ of groups who defaulted to Reddit actually got off
| their ass and set up a Discourse or Discord. I consider
| Discord a huge step backward, but those who set up Discourse
| groups are now in a much better place.
|
| So, a _lot_ of the technical people who made Reddit the "go
| to" place for searching are now gone. As that half-life of
| the knowledge of those groups kicks in, the usefulness of
| Reddit is going to slide down.
| moffkalast wrote:
| For Reddit the alternative is non-existent so people had no
| choice but to stay and Reddit knew this very well. It's also
| something that's tied into the human reward system and
| fosters a sort of addiction which makes any attempt to leave
| even harder.
|
| Unity has none of those things. It's a stone cold tool
| designed to make money for game developers and there are
| clear alternatives in Unreal and Godot. Now sure there are
| people who've based their entire career around knowing Unity,
| but those skills are reasonably transferrable.
| Hamuko wrote:
| I imagine seeing money-printing machines like Genshin Impact
| ("HoYoverse [2022] revenue was around 3.844 billion USD and
| their overall net income was around 2.27 billion USD") run on
| Unity was a great source of encouragement.
| noirscape wrote:
| Mihoyo specifically has a separate license for the Unity
| engine and the source code of Unity itself IIRC, meaning that
| Unity likely already struck a separate deal with them on that
| matter.
|
| But yeah, the revenue on everyone else is likely what they
| were after.
| swatcoder wrote:
| It's systemic.
|
| If you look around lately, _everybody_ is desperately
| scrounging around for more revenue and fewer free tiers
| /accounts/features/etc. Many of the strategies to do so will
| falter or fail, as here, but they're being made all over the
| place.
|
| Either a wave of greed culture happened to spontaneously wash
| in, or an investment economy built around perpetual exponential
| growth and potato-tossing is preparing for a bleak future.
| noirscape wrote:
| Gacha games and mobile games in general were the target.
| Remember that all the install fee waivers that they announced
| initially were dependent on developers using Unity's own ad
| broker for mobile games.
|
| Fate/Grand Order is one of the most profitable games on the
| mobile phone market, it literally makes millions and it's
| written in Unity. As far as I'm aware, Lasengle (the
| developers) don't actually have a Unity source license so
| they'd fall under this deal.
|
| The console/desktop market just... was not a consideration.
| mjr00 wrote:
| > Fate/Grand Order is one of the most profitable games on the
| mobile phone market, it literally makes millions
|
| Small correction: FG/O makes _billions_. Over 7 billion, in
| fact. https://gameworldobserver.com/2023/09/11/fate-grand-
| order-hi...
| Kiro wrote:
| How is it possible? The game looks horrendous. I can
| understand Genshin Impact, Supercell games or even Candy
| Crush but this? What am I missing?
| bsder wrote:
| Fate is part of the "Nasuverse" which has been around for
| a _long_ time (Fate Stay /Night dates to 2004) and has
| the exact kind of superfan whales that leave mobile game
| developers salivating.
| noirscape wrote:
| To put it simply: really good writing, Fate in general
| being a super-franchise in the audience of anime viewers
| and a lot of whales willing to spend money for jpegs of
| their favorite anime girls.
| HDThoreaun wrote:
| > What ...encouraged the initial decision to increase the
| price?
|
| Probably money. You don't seem to have considered the
| alternatives, one of which may have been mass layoffs or even
| total failure. Asking for more money is never easy, but I don't
| think that means companies just shouldn't do it.
| bagels wrote:
| Or, the alternative was somehow worse? Run out of cash and fail
| to get more investment?
| basisword wrote:
| Companies can't just continue raising and burning money
| forever. At some point they have to charge an amount that's
| worth the value they provide. We're weirdly not used to that
| concept after a decade or more of low interest rates, but
| it's something we're going to need to get familiar with -
| paying for things we use that save us or make us money.
| bagels wrote:
| I agree. People seem to imagine there's some evil cartoon
| character twirling a moustache figuring out how to
| comically oppress them, when the reality is usually a lot
| more mundane.
| endisneigh wrote:
| I have to give it to them - who knows what they're thinking - but
| the fact that they adjusted the pricing scheme and that the
| leader is leaving at least suggests they're taking (and have
| took) the feedback seriously.
|
| That being said, even before the drama, unity was a sinking ship
| that was not profitable. Something will have to give eventually.
| basisword wrote:
| >> That being said, even before the drama, unity was a sinking
| ship that was not profitable.
|
| Surely the new pricing is the solution to that? The fact that
| we have these massive companies, creating complex software,
| used by tens of thousands of people to build their own
| companies, and they are unprofitable is insane. Their original
| pricing scheme was a mess, but charging more generally and
| becoming profitable is good for them and therefore good for the
| tens of thousands of companies building their businesses using
| Unity software (given that Unity doesn't die and they don't
| have to retool their entire dev stack).
| Nition wrote:
| > Surely the new pricing is the solution to that?
|
| Not directly.
|
| $1,625,000,000USD spent buying Weta.
|
| $4,400,000,000USD spent buying IronSource (I think? It's a
| weird deal).
|
| At 20c per install, every person in the world would have to
| install four Unity games just to make back what was spent on
| those two deals. At the lower 1c per install rate, everyone
| in the world needs to install 75 Unity games.
|
| Plus salary for what is apparently 9000 employees.
|
| Conversely, let's say in reality everyone in the world
| installs on average 0.1 Unity games per year, and that the
| average rate earned per install is 1c (probably generous
| because most Unity games won't earn above the revenue
| threshold at all). That makes Unity $8,061,241/year.It would
| take Unity 750 years to earn back what they spent on those
| two deals.
|
| But it seems like the goal is the use promises of _not_
| having to pay the fee as leverage to get devs buying related
| services. For instance, they suggest you might earn "credits
| on the Unity Runtime Fee based on the adoption of Unity
| services beyond the Editor, such as Unity Gaming Services or
| Unity LevelPlay mediation for mobile ad-supported games."
| KaoruAoiShiho wrote:
| I mean John fucked up the delivery of the message, somehow
| the cheapest pricing scheme I've ever seen was interpreted by
| the customers as an example of dastardly extreme greed, and
| the fix was to roll out a much more expensive pricing scheme.
| Something was lost in the sauce and that was all John's
| fault.
| wkat4242 wrote:
| The biggest problem was applying it to already released
| products. You have to give the developers the chance to
| pivot their business model to meet the new reality. They
| can't do that for already sold products that they would
| still be charged for under the new scheme.
| Root_Denied wrote:
| If they tried to enforce that on previous version they'd
| get sued from all directions for contract violations. It
| was never going to work like that, there's no way Unity
| could have even afforded to defend themselves against
| such a barrage of lawsuits.
|
| So the only question remaining is this: Did they announce
| these changes with the intent to walk them back to
| something else, or are they really that stupid?
|
| My bet is on the latter, honestly.
| caffeinewriter wrote:
| I know for me (as someone who would likely never have had
| to pay a dime under either pricing scheme) the crux of the
| issue was unilateral, retroactive changes to a license that
| was supposed to be tied to the software version, as well as
| the nebulous "we'll know what to charge you because of our
| proprietary data model, trust us" messaging that they first
| went with.
|
| That, combined with the fact that there was no safeguard
| for the install fee to be capped at some percentage of
| gross revenue made it so clear that they were trying to get
| something out of their free to play market specifically,
| which seems to have been to force their F2P customers to
| use their Unity Ads service over Applovin or similar
| competitors since they gave credits towards the runtime fee
| if you vertically integrated with Unity.
| dagmx wrote:
| The issue also was that the lowest pricing tier was
| horrible for a lot of the companies that were Unity's
| forte. It was massively out of touch.
| lofaszvanitt wrote:
| Idiots... someone started the idiocy and the I eat everything
| monkeys regurgigated it on Youtube. Conjuring all kinds of
| nonexistent looming threats. JR did the right thing, and the
| idiots crucified him for it.
|
| The changes only affected those who had ample revenue from
| their games, so why is it frowned upon that they wanted a
| miniscule share of their success? When Steam and Epic pockets
| 30%?
| 0l wrote:
| FWIW Epic's cut is 12%, not 30%.
| eropple wrote:
| That wasn't at all why people got mad. The unilateral claims
| (perceived or otherwise) on prior releases of the engine,
| claiming that the platforms (e.g., Microsoft) would just pay
| it--it was badly messaged, badly considered, and the initial
| feedback from their customer base was blown off and
| dismissed.
|
| None of it was handled well.
| bluescrn wrote:
| Steam could take 90% and the 'gaming community' would
| probably defend it (and therefore developers don't want to be
| seen criticising the almighty Valve)
|
| Epic got a lot of hate for merely trying to compete, to
| weaken the Steam near-monopoly over PC game distribution.
|
| With Unity though, the outrage was over a loss of trust more
| than the cost of the fees themselves. And it came at a time
| when it seemed that the engine had been stagnating for years,
| after they'd made significant redundancies and cancelled the
| Gigaya project (their attempt to actually make a game
| themselves with their engine - which could have been very
| beneficial, creating internal pressure to fix/improve provlem
| areas), and while the main competition seemed to be adding
| exciting features at a much more rapid pace.
| AlexandrB wrote:
| Even _if_ you 're right about the pricing. Launching this
| change with so many unanswered questions (like how they're
| going to track "installs") was going to end in disaster.
| Should have gotten their ducks in a row first.
| hoc wrote:
| Worst thing was that they had a collection of pre-made FAQs
| that proudly confirmed all the worst ways to understand the
| changes and actually left no real path for "misunderstood
| what we meant".
|
| This whole stunt was a painful communications nightmare but
| also the rude asymmetric breaking of trust that most people
| saw in it.
|
| So, this final step was needed for cleaning up that mess
| (and it still might need some detail work, if one looks at
| that apology interview), no matter how deeply strategic one
| wants to look at firing a CEO.
| notpachet wrote:
| Not to mention the loss of trust from having the new
| pricing retroactively affect already-launched titles, as
| opposed to giving developers advanced notice of a policy
| change at some point in the future. No one wants that kind
| of unpredictability from a critical dependency.
| Nullabillity wrote:
| They're still trying to roll out the new pricing scheme, they
| only backpedaled on it being retroactive. They still haven't:
|
| 1. Actually scrapped the install fee
|
| 2. Scrapped their ads product that this bullshit was all
| supposed to push
|
| 3. Made a binding commitment to not try this shit again in the
| future
|
| 4. Fired the board that hired JR
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