nanoUFOUnity May Never Win Back the Developers It Lost in Its Fee Debacle
bbmbHonestly, I don't blame them. It took Unity 10 days after announcing this awful change to backtrack to a normal revenue cut. That 10 days was filled with justified outrage from a ton of developers to the point of Re-Logic donating $100k to Godot and FNA in protest.
Doc BlazeThe harsh truth is even if they lose half of their current users they will end up making more anyway, even with the amended changes. They planned to lose a large chunk of their user base, regardless. The “seats” model is dead now that AI is changing how game development is done from the ground up.
Nah this went really bad for them. Even if they do make more, it will almost certainly be short term. Godot got so much free advertising. It firmly sat itself next to unreal as far as who should be choosing it, but it is definitely the inferior engine if you are making AAA. It's going to get cut from the high by unreal and the low from Godot, defold, and even gamemaker.
I don't get this weird apologist attitude. Let us not forget Unity just spent over $4 billion less than a year ago buying the malware ad service ironsource. They are not profitable because they make bad business decisions. This was one more. And in all likelihood we will see the sale of unity before too long. And it will probably be less than the $20 billion offer they had prior to the ironsource purchase.
They are not profitable because they make bad business decisions.
Exactly this. Just like how reddit very quickly made enough in reddit gold sales to cover their server costs for decades, the only reason it’s operating at a loss is because they’re running it that way.
it’s a known strategy in tech startups and most non inventory based businesses in general (think moviepass) to try and get as much market share as possible, even operating at a loss, and then slowly turn up the prices on your users once they are locked into your system and make back the lost revenue over time. I don’t agree with it either, but the y-combinator business tech crowd seem to love this model, so I can’t really say if it’s a bad decision or not.
Captain AggravatedCan you cite an example where this has actually worked/led to a stable business model?
No, but once again, I did say that
I don’t agree with it either
I can however, point to evidence that it’s a popular business model, if you don’t mind accepting hacker news and y-combinator articles, as well as YouTube media of startup CEOs in earnings calls, but I refuse to defend it otherwise. These are often people with lots of money and advanced stem + business degrees however, so Im not going to sit here and act like I easily know better than them. I can say it did work for Google, but this is after they already were dominating with ad revenue and had the means to slowly introduce ads into every platform they owned.
Lots of SaaS business models adopt this hyper revenue growth, but cash flow negative, unprofitable model. However this business model was only possible with a low interest rate environment of the past 15 years. It was relatively easy to get approved for loans and venture capital funding.
Think of companies like Uber and AirBnB. Their mission is too undercut their competition and be unprofitable until they become a monopoly. Once they get monopoly market share, they will try to show pricing power and raise prices on their consumers once their is no competition.
Compare that to Google or Facebook, who have always been profitable.
Interest rates are higher now so it is becoming more difficult to get cheap loans and fundraising. It will be interesting to see how this unprofitable model will survive or not.
CoderKatAmazon undercut like crazy and is utterly massive today. They’re basically the online shopping company.
Amazon is a goods-based business though, they ship massive amounts of inventory.
I can cite an example of it with an inventory based company. KIA sold their cars at damn near a loss in the US for a long time to get a good foothold. And it worked. Iirc they had a bogo on cars at one point even.