Unity drama: New pricing plan unveiled

Nikola Kliska,
Senior associate, Karanović & Partners
In a recent industry shakeup, Unity faced backlash for its revised Runtime Fee plan.

The plan originally set to charge developers for every user installs in 2024 led to widespread concerns among smaller creators. Developers protested against the retroactive fees and the potential threat to their studios, with some vowing to abandon Unity.

Retroactive changes in contractual relations are, in general, prohibited by Serbian law, and they can hardly be justified in other jurisdictions, either. This makes this decision controversial.

This controversy stems from Unity’s ongoing competition with Epic’s Unreal Engine for dominance in the game development tech space. Unity reported $533 million in revenue but faced a $193 million loss in the spring quarter, leading to a 600-job cut in May. Unity’s President, Marc Whitten, emphasized the need to build a sustainable business and establish a “shared success” model.

Following the negative feedback and mentioned legal controversy, Unity has introduced a new pricing plan, clarifying that the Runtime Fee won’t apply to games created with currently supported Unity versions. It will only charge for new installs after 1 January 2024. The fee solely affects games created or upgraded to the Long Term Support (LTS – realized for creators to provide stability and support for their project – LTS version rolls up the quality features and improvements made across the year into a single installation) version of Unity, subject to specific criteria:

  • Unity Pro or Unity Enterprise plan usage,
  • Upgrading to the next major Unity version in 2024, and
  • Meeting both $1,000,000 gross revenue on a trailing 12-month basis and 1,000,000 lifetime initial engagements.

Unity noted that installing or reinstalling a game counts as one initial engagement, not two. Additionally, Unity’s subscription plan remains separate from the Runtime Fee. Whitten said that the new plan now offers developers a choice. After crossing the mentioned criteria, developers can either pay fees based on “a calculated amount based on the number of new people engaging with your game each month” or a flat 2.5 percent of all revenue, whichever is lower. Both numbers are self-reported from data developers already have available. Developers will always be billed a lesser amount.

Following the negative feedback and mentioned legal controversy, Unity has introduced a new pricing plan, clarifying that the Runtime Fee won't apply to games created with currently supported Unity versions.

Whitten said that introducing a revenue share program was a way to offer developers more flexibility, allowing them always to have an idea of what would be owed while also giving them a choice of how to pay.

From a contractual standpoint, consideration plays a vital role in validating the changes in Unity’s pricing plan. The introduction of the new pricing plan requires a reciprocal exchange of value between Unity and the developers. Unity offers the game development platform and support, while developers contribute through fees once they meet the specified criteria. This exchange serves as the consideration in the contractual relationship, aiming to establish a balance and ensure that the terms of the agreement bind both parties.

While Unity has made these changes, there’s no guarantee that they won’t alter their terms again. Developers are left to trust Unity, and are advised to constantly check the updates of terms and conditions. This is important as there are still no guarantees that these are the final terms of using the Unity platform. From a legal perspective, the last announcements seem fair and enable a balanced exchange, aligning with the principles of consideration and contractual equity.