Unity, a game engine which is particularly popular in the mobile world (claiming to power over 70 percent of the world’s top 1000 mobile games) has announced a new pricing model based on game installs. From the start of next year, developers whose games meet specific thresholds will have to pay Unity a fee for each game download, rather than the existing revenue share model. The change has significant implications for the mechanics of mobile app monetisation, and will likely force many game developers to rethink their revenue models.
Unity says its core game engine, Unity Engine, has two main components: the Unity Editor (used for creating games) and Unity Runtime (code which users download onto their device when they download a Unity-based game). The fee is based on this second component. Every time an individual downloads a game which comes with Unity Runtime (which is required for every game built on Unity), that game’s creator will have to pay a fee back to Unity.
The exact fee structure varies based on which subscription plan a developer is signed up to. For developers using its free and cheaper subscription plans, the fee will apply to any games which have made $200,000 or more in the last 12 months and have at least 200,000 lifetime installs. Developers who have bought more expensive subscriptions meanwhile will only be charged for games which have made at least $1,000,000 in the last 12 months, and at least one million lifetime installs. Discounts will be available for developers who use Unity’s other tools, including its ad tech offering.
Unity says that this fee will go towards “continued investment” in the Runtime code. In the initial press release, the company said that “an initial install-based fee allows creators to keep the ongoing financial gains from player engagement, unlike a revenue share”, though it is not clear that this new fee replaces any existing revenue-share charges.
Developers quickly made their frustrations heard on social media. The overarching complaint was that the fee structure would effectively punish games which became popular, making it harder for developers to make a profit. Many also pointed out that games which get included in discounted bundles, such as charity bundles of Microsoft’s Game Pass, would be particularly harshly punished, since inclusion in these bundles leads to spikes in downloads, but at a lower revenue per user.
Our thoughts on the Unity Runtime Fee pic.twitter.com/Z0zrXsiHAc
— Landfall (@LandfallGames) September 13, 2023
And the fee structure looked open to abuse. Unity initially said that if a user downloaded a game, uninstalled it, and then redownloaded it, the developer would be charged for both downloads. This would make it possible for users to punish game developers they don’t like by repeatedly downloading and uninstalling their games.
Unity has since either clarified its position or changed its mind on a number of these points. Installs from charity bundles won’t be included, and fees for installs from bundles like Game Pass will be charged to the owner of that service (which in Game Pass’s case would be Microsoft). And Unity has said that the fee will only be applied to the first download of a game.
The company also emphasised that the fee would only apply to a relatively small percentage of developers, given the thresholds.
Nonetheless, the fee system complicates the monetisation equation for developers. In the mobile world, many games’ user acquisition strategy is based on running ads on other mobile apps, often paying on a per-download model. Indeed, a lot of the mobile ecosystem is built on this, with apps running ads for other apps, which in turn are seeking downloads so that they too can run ads for other apps.
But with a pay-per-download model punishing app downloads, this delicate monetisation balance becomes more difficult. Apps have to pay not only just to advertise their app, but they have to pay more when those ads actually work.
Of course not all games run on Unity, and there are other engines available. Some developers have said they will consider moving to a different engine, if Unity goes ahead with its plans.