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Unity Expects Impact of Runtime Fees to "Have Minimal Benefit" in 2024

The company might start laying off employees next year. 

Image credit: Unity

Unity has published a financial report for Q3 2023, sharing its revenue, plans, and the results of the controversial runtime fees.

In the period, the company delivered revenue of $544 million, which increased 69% year-over-year. Its Create Solutions for developers saw revenue of $189 million, which was flat year-over-year, while the Grow Solutions tools for analytics and monetization received revenue of $355 million, up 166% year-over-year.

Unity's revenues could be higher, but the runtime fee policy, introduced in September, made it experience "some revenue softness," which is now mostly behind, according to the report. The company had to quickly change the conditions after a backlash, and soon after its CEO John Riccitiello left his position. Unity believes the impact of the fee will "have minimal benefit in 2024."

"While we did not expect the introduction of the fees to be easy, the execution created friction with our customers and near-term headwinds. We expect the impact of this business model change to have minimal benefit in 2024 and ramp from there as customers adopt our new releases."

Unity is planning to focus on Unity Editor and Runtime, Monetization Solutions, and digital twins. It is going to face restructuring, and this will likely lead to layoffs and some products disappearing.

"Several weeks ago, we started a comprehensive assessment of our product portfolio to focus on those products that are most valuable to our customers. ... We expect to start implementing the plan within this quarter and expect to complete all interventions before the end of the first quarter of 2024. This will likely include discontinuing certain product offerings, reducing our workforce, and reducing our office footprint."

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