How Unity could win the engine war and make more money with it

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Thats going to happen immediately regardless. Any Asset store developer who has any sense at all and if it makes sense for their assets is going to already be looking at porting their stuff over. Its just common business sense, you broaden your market with a good chance of reaching an entirely new market of users, even double dipping selling the same asset to a developer twice (across development platforms).

The real crux of the issue is how important are the current Unity free users to Unity's eco-system? How much asset store revenue do they earn from them? How much do keep the forums alive? How much do they spread the use of Unity and contribute to a wide pool of developers that companies can hire.Only Unity know or have estimates to those questions and it is going to be based on that which direction they go in.

On top of that will be the 'startups' and dreamers with small indie teams who would effectively not be paying themselves to make games or invest any money at all, because if you actually are intending to pay your team average salaries then there is little question that you'd end up paying more with UE4, unless you are based somewhere with high cost of living or low wages.



What I mean is, and please feel free to check my numbers...

Take a studio of 5 people, 2 coders, 2 artists and a designer/manager. According to https://www.develop-online.net/news/revealed-average-game-developer-salary-falls-to-32-500/0188668 , where i've ignored the cost of 'lead' developers

Junior Artist/Artist = $31k / $50k
Junior Coder/Coder = $35 / $58k
Junior Designer/Designer = $31k / $45k

For this team to use Unity and developer for PC/iOS/Android at most they would need to pay 5 x $4500 for the first TWO years ( likely you can reduce that cost by not having add-ons for all of them) that's a total software cost of $22,500

The earnings of your games you'd have to make over that period to pay your wages would be,
Jnr/Artist x2 x 2 years = $124k / $200k, Jnr/Coders x2 x2 = $140k / $232k Jnr/Designer x2 years = $62k / $90k

So spread of cost of having an all junioror all non-lead developers for 2 years would be $326k / $522k.

But wait we've forgotten something, firstly that figure is from your net profits, before you get to that point you have to pay your 30% to the digital store and the 5% royalties! So (if I have this right) you need to add 35% on top of those salaries in order to be able to pay your developers. Which on $326 would be an additional $114k for total of $440k and on $522k would be $182k for total of $704k.

This would make royalty payments on 5% of $22k and $35k, easily equalling or more than Unity base cost.

Lets not forget we've not factored in additional costs such as the UE4 subscription, corporate tax, cost for accounts for book keeping, costs for studio space, heating, electricity etc. Now all of those costs exist for a Unity start up too, but the important factor here is that the additional money you need to make on selling games to 'keep the lights on' do not have a 5% royalty attached to them, but with UE4 they do!

This also goes some way to show just how complex the book-keeping and paying a 5% royalty to someone can end up if you are trying to manage a proper company. There is every chance if you don't hit your sales targets to pay your staff, you are going to be in debt and not be able to pay the royalty to Epic either. Obviously one would hope you've set the business up correctly to avoid being directly liable for these costs, but the point is just how much of a headache this can be on top of everything else.


TLDR;
Anyway long story short I strongly suspect that UE4 licensing model is not that attractive for serious start-ups or established studio's, as such Unity probably doesn't need to do anything. I think they should make some token gesture, only because of the perception that UE4 is such a great deal it would be a good play to make.

The real battle ground here is as i've mentioned above those free users and the dreamers that will never actually make a game or make any amount of profit off their game and whether or not Unity can afford to lose them fro their eco-system, because that is exactly the market UE4 is going to decimate (at least at first).


Royalties
I honestly think these are a none starter for Unity for many reasons.

Firstly how as a company can you affectively track sales of games made with your engine? Sure you can rely on the professional developers/studio's keeping their books up to date and informing you, but for the rest what? Maybe you could add some 'tracking' code into game builds, but that's open to a host of issues, being hacked out, forces games to be installed on systems with internet access, doesn't tell you if the game was free or what cost the game was bought for ( sale deals ).

Then you have problems with recouping royalties, developers may be debt, go bankrupt or simply disappear. Those that still have money but refuse to pay have to be taken to court, not easy and not popular in terms of PR.

What it comes down to is that you are relying on the royalties from the top few % of games and game companies who play by the rules and probably ignoring the rest to some degree. So in terms of the sort of developers UE4 is attracting I believe many of them will be non-starters in terms of royalty revenue and shouldn't be considered beyond their subscription.

I mean its often quoted that majority of iOS developers make $200-$2000 p.a. is any company really going to be bothered chasing the royalty on those? The cost to do so would be more than amount of royalty owed, heck the cost to send the royalty through the banking system could be more than the royalty, though that cost would be incurred by the game developer - something else to keep in mind.

That is not to say that Epic wont make a good profit from royalties, but when you get into the numbers needed for that Unity, as I suggest above, start to become more attractive with its single upfront cost.

Suggestion

Out of all the suggestions so far, I like the subscription model to 'build from Unity' that sounds like a good compromise.

It allows free users access to pro features, supports the eco-system including the asset store (maybe even bolstering it) without paying a cent. However the cost to build will need to be pro-rota/equivalent overall to the current purchase costs (+ add-ons required), else the system can and will be abused, so it wont be $20 p.m or even $75 p.m, it will have to be much larger, say $300-$500 or something.

People will complain about the cost, but if you are going to release a 'Pro' game at least have the balls to put YOUR money where your mouth is and not rely on other people to do it for you. Unity free will still be available under the existing licensing, so if you can't afford the build price, then convert your game to free and release that instead. Use the revenue it generates to get a subscription or buy Pro.


Sadly none of this helps me personally, so a drop in the cost to buy Unity + add-ons would be nice. However whilst I could massively cut my costs with UE4 since the license royalties do not affect 'work-for-hire', I don't see myself switching, at least not on price alone if at all. I think Unity has bigger issues than that to deal with in the future.

 

Stop pretending that either of those examples you gave are the same as UE4, because they aren't.

Show me a game where I pay $2 for some coins and then have to pay an additional 5% every quarter on for say every level I advance by through effort and using those $2 coins.

Adobe is very different because they have a much wider market and already had a huge existing installer base, particularly business orientated and were able to roll-out the cloud over time to gauge the relative merits of the system. They are in a position to offer deals on Photoshop/Lightroom because they are financially sound, its a 12 month contract (no access when contract is up) and at no time are they relying on potential additional income from 5% royalties.

However you are correct in that a subscription model could support Unity, particularly if it has a wide market appeal. The problem is a subscription with royalty system is Unity gambling on their existence. 100,000 users at $20 p.m per year could generate $24 million, but we've already seen with UE4 how people are talking of only subbing once, or once every quarter. Unless users are locked into 12 month clauses it can be very volatile income stream and thus a big risk. As Hippo keeps pointing out Unity do not have AAA licensees to fall back on or their own games/brands either.

 

You're right it's not that attractive to be honest, but what about one man's and duo's who work in the mobile sector? There appears to be far more of them then start-ups and established studio's with money to pay staff. Not to mention they have to pay more money then us in the A and AA even though their budgets are smaller?

It seems kind of odd that Unity would target a market with less cash flow and then charge more for it. Being very forward, Unity isn't an attractive offer for the A, AA and AAA sector either literally down to the tech being dated and having to pay an upfront cost / expensive subs (Compared to competition) for the pleasure. Even though in these sectors we have more money (Generally) to spend were also not stupid.

It has to be worth it, whether it costs us $75.00 a month or $100K for the engine.. The issue arises when the competition does it better for less money.

 

This cry-unreal-unity debate is going far too long.

Before suggesting future price plan for unity and talking about "what engine guys should choose",

Do you guys actually looked at cry-UE yet?

With "looked", I meant a through academic journey of those engines, that you understand these engines, became friendly with them. Surely price is a significant factor. But really engine features, workflow, difference in engine architecture between "current and target engine" etc play a huge role on engine selection.

Something inside me kinda think that we are exaggerating price issue. Anyway I can confirm when I finish my little thesis(which began at the day of surprise) on UE4. Till then, good luck fighting!

 

You're right. As of last week Unity's cost and value compared to now was very different. Personally i'd argue the cost/value was fine, but like everyone would wish it was a little lower especially for multiple add-ons. As you say that's all changed now, but to different degrees for different segments of developers. This is the problem how can you effectively target such a divergent market as game development, that stretches from one person in their bedroom, to two guys with a studio, to 5-10 man studio and beyond, without having a confusing tier of prices, licenses and the like?

It also ties into my final line, that I feel prior to this and possibly even more so now Unity's bigger problems is not with overall cost, but in terms of technology and rapid response. Though I do give them credit for being fast to respond to serious bugs, but they can be quite slow to get the fixes rolled out unless they are literally preventing builds.

I would love to be a fly on the wall in Unity HQ, as I really can't understand why it take so long for editor improvements or tech features to be created. It has to be due to their wide platform support and the reliance they put into QA, as they clearly have the staff numbers and expertise. Maybe as some including yourself have suggested the current business model is part of the problem too. I know personally I hate the 'tick box' mentality for new releases as it tends to side line less cool features and less focus on updating legacy systems or fixing legacy bugs.

But like I said I don't think royalities is a good system to switch to and i'm unsure if subscription model is viable. I have to wonder if most of those clamouring for Unity to change to UE4 system would be willing to release thier games/products on the same pro-rota type of agreement. That is renting your game for $0.01 p.m. and additional 5% every quarter on how much you paid that quarter to play the game. Bet it doesn't seem as good a business model when looked at on a personal level

 

We already switched engines once. Our game was first developed in Torque 3d but had issues that we could not solve, not to mention a very small community, little documentation and a lame asset store. We looked at a number of engines and chose Unity but this was after we had purchased several T3d licenses for team members. Our team was much larger then but fortunately, Torque did allow us to purchase transferable licenses so as team members came and left we could transfer them.

After switching to Unity, we have run into a few issues with Unity Free that we did not have with Torque 3d. For example, water is horrible in Unity Free and we have purchased multiple assets, all promising to fix our problems, but they didn't. We found one that is "okay" but still struggling. T3d had LODs and occlusion culling, not as good as Unity Pro maybe, but still, it was there. We don't have that anymore. We also would like the render to textures from Unity Pro and animation curves. Terrain creation was a dream in T3d, although it had limitations that Unity does not have. Unity's terrain editing is terrible, absolutely horrible. We did find nice assets to help with most issues but not everything.

We are not sorry we switched but we struggle still to make our game the way we want to make our game. I wish we could upgrade to Unity Pro but right now, we simply can't justify the cost of three licenses with increases every 2 years, especially since we may never make a profit on our game. The costs are worth it for a company that is already established, I get that. But how does a company get started with the engine is missing key features? Yeah, we can publish with free, deal with the limitations and hope for enough Kickstarter money (as we fight to get noticed among the big companies now doing crowdfunding) to buy Unity Pro. Even then, Unity does not allow license transfers so it will be difficult or expensive to attract new team members and the investment in Unity will only increase as new updates are released or we move to multiple platforms.

But how nice it would be to have access to the nice features, make our game, and then pay for the Pro version before we publish or pay royalties on our game. Of course, we do not support ourselves with money from a game so paying royalties is not an issue for us.

I read these posts from people who have sold games, who are doing well and paying themselves salaries from their game income. I am happy for them. But we all have to get started somewhere and most of us do start from nothing. I guess the question for people just starting out is whether they need the complete package or can struggle along with Unity Free and the asset store. Quite honestly, I find that stuff from the asset store only works half the time so I waste a lot more money than I should.

 

This poll needs an alternative for "Some good ideas, but needs more work".

 

Epic gives you a full source code access to Unreal Engine 4 for $19/month. Your post had some sense, may be, a month ago

 

Epic also stripped out all 3rd party stuff from the engine and code. To get the full package its way more than $1500.

Unity uses a ton of licensed stuff for different things starting from the Editor itself running on mono from Novell (and not Xamarin which could have different licensing restrictions).

 

Just wondering - would enabling render texture on free be enough for hobbyists and enthusiasts? It pretty much gives you all the gloss you're asking for.

 

We also need LODs, which come even with basic engines like T3d. Occlusion culling is pretty important and better water textures. Animation curves are essential for those of us who do not have an animation artist, which includes many of us. I can tweak animations in Blender but it is much more complicated than doing within the editor. If I had those, I would be happy. I know we can do some of those things with assets from the store but they are not as efficient and more difficult to set up. I don't mind paying for these, but not $75 a month per license or $1500 plus upgrades every 2 years.

Of course, I am not a coder or an artist so I might be missing some crucial parts. But as a designer, it seems to me these are the things I miss the most. I don't mind missing some of the pretty parts, but I want an optimized game. A game that lags due to no LODs or bad occlusion culling is not going to present well.

I think everyone, from Free to Pro believes the terrain tools in Unity are really bad. I can't make a decent looking river in Unity but I could in T3d, which is now a free engine. So the terrain is something Unity needs to fix.

 

I´happy with free + asset store. it surpasses my habitability for now. But i dont want to bet on a dead horse.

I fear having a less sparkling engine hinders Unity capacity to attract more users or even keep the current users. Specially since the competition made a very attractive option; a "unity pro" engine from a solid renowned brand, practically free for hobbyists and starters all sugar coated with a very appealing culture of openness that you can see on every detail, like 19$ is 19€ including vat or even addressing the users that are using "alternative sources" to get Ur4 to check the binaries integrity etc..

In the not so long run, this new users (including students from schools) will hit the spending phase starting on asset stores, upgrades, establishing business etc. This will affect Unity ability to keep evolving and eventually sustain a free option.
Teaching Programming is the new "English" and teaching kids to program by game making is the easiest way. Now is the time to get the foot in the door.

 

Profiler. I can live without rendertexture and LOD.

 

I think more alternatives for real time shadows is most important. As you see from the other replies it differs a lot which pro feature is considered most important.

 

I really don't think a royalty scheme would work for Unity, and might well bite UE4. Collecting sales data from 2 million users (they would have to check all users ever), then collecting the royalties of 500,000 apps from 200,000 developers (those numbers are a guess, but probably in the right order of magnitude) would be a nightmare.

Just getting developers to share sales across all platforms is a nightmare in itself. You cannot even go on retrieving analytics from apps as a user can download to multiple devices, not all devices are connected, etc.

If all users were one person, then that person would be schizophrenic. A common point appears to be UE4 is not as cheap as $19 because of the royalties, but it probably doesn't work out as much as $75 for most users, and certainly not the £225 the Pro costs mobile developers. But people have differing views.

 

One Unity, all PRO features (+ mobile platforms) for everyone.
No more separate versions. So everyone has the same feature pack and could accomplish the same engine wise (and everyone is happy therefor).

The engine market is shifting in terms of economics.
To keep Unity going strong and stay a/the leading player, UT should in some way adopt to the change (in what form, is in the end up to UT).

In my humble opinion, the thing we could discuss/focus on, is licensing schemes in terms of cost.
Many have given their view/proposition on this, which is a very good thing. i've seen some quite interresting propositions in this thread.

Combining many propositions, i think is is clear that Unity should have a dual license:
- People who DON'T like subscription AND/OR royalties, are able to go for a flatfee license.
- People who don't mind subscription AND/OR royalties are able to choose that license type.

Note: for both license types i'm, on purpose, not mentioning a percentage, flatfree price, sub price nor a revenue treshold, since that should be further discusses in this thread.

And free users that are not wanting to pay for either license?
- a trail version (for free), that has no feature limitation, but e.g. could only run for x minutes each time (the export that is), so testing is possible, but not suitable/alowed to use as end product (free or commercial). Another way could be a watermark on the exports (i think it's fair that when a developer start to earn, it should somehow pay something to UT to compensate). (just an idea... to help people who want to develop for free, as they used to..)

Every licensee wins imho.
Bigger studios can continue as they are used to (subcription AND/OR royalty free), smaller/beginner studios can choose to go flatfee or the other route (subscription AND/OR royalties).

I know that mr. Helgason has said he would never introduce royalties. But i think it's the only way to continue.
AND a company should always be able/willing to adopt to changing climate, promises he made back then, could backfire and make the company less flexible to adopt to these type of change. (since people will remind him of promises made).

 

@ Kaiyum, I've had the eval of UE4 since last year and we have a team developing in it. So I know a fair amount about UE4, with Enlighten and everything bolted on to it. It's great for what they are doing, but I did my teams concept in Unity nearly six months before UE was released.. If I was starting from scratch again I'd be inclined to go UE4. For this project Unity would be far more suited..

@ Noisecrime, a royalty based system is rarely a good thing. It's something else to stack on all the other cut's of your profit pie, you got 30% for the likes of steam. You have taxes to pay for so nearly 50% of your profit is swallowed before you get out the door, adding that additional 5% is just more to the pile. I know it doesn't sound like much, but if you are lucky enough to sell a lot it can make a huge difference.. We all want to make a follow up bigger and better right?

@ Teila, no wonder you're broken after Torque 3D .. Friendly advice here, if you're struggling to pay for Unity I would seriously consider finding other sources of Income.. I'm gathering you're making a 3D game? This UE4 debacle is only going to make it more difficult for us... Quality will need to be higher, our marketing funds will need to be greater etc. etc. Art tools and marketing alone is going to far outweigh the 4.5K base cost for Unity pro..

Not that I think 4.5K is a good deal by any stretch.

 

I think a whole lot of them will come back quickly given the current state of UE4. The steeper learning curve of C++ and the UE4 API added to the longer iterations times due to build times and having to restart the editor every time a new class or method is added will be difficult to tolerate coming from Unity.

 

You realize why unreal isn't giving you that choice up front, right? It's so that somebody is paying a lot of money. In your scenario, nobody is paying a lot of money.

 

Not entirely true at all...

Flatfee is the business model as it used to be for years for UT (income wise).
Now they can get even more by subcription AND/OR royalties as extra. (which they miss out at current)

 

Thank you for your concern, but we do not rely on games for our income. This is a labor of love for us and something we might enjoy in our retirement, which seems to get closer every day.

Our game is a niche game so we do not expect to make a lot of money but we do have a small, but dedicated following. Competition is not a huge concern for us at this time. We also have all the art tools we need as well as tons of assets from a previous game (we inherited all the assets legally) that failed due to lack of funding and other more complex issues. Much of our team is from that failed game. I have 10+ years experience with indie developing so a realist about all these things. But we have to try, regardless of whether we fail. I don't fear failure, but I fear regretting that we didn't at least try. Plus, we are really enjoying ourselves!

We also realize that marketing and purchasing any custom assets/plugins we need will be expensive which is why we are cautious about investing money in Unity Pro. We lost hundreds of dollars when we left T3d, since at that time the engine did cost money and we owned most of the team licenses. We don't want to lose thousands with Unity. We prefer to spend our money on assets and marketing.

As for struggling to pay for Unity, we choose not to pay for Unity Pro because we don't think the extra's are worth it at this time. This doesn't mean we are happy with the lack of features we can get free with T3d or UE4 or others. Our intention was to upgrade to Unity Pro in the future but right now, we are seriously debating that issue. I think the realization that paying for the Pro version is not going to end really hit home with the U5 announcement...we will be doing this forever if we want to continue updating the game...every two years. Since we are a small team with outside careers, we move slowly. It could take us 5 years to finish which basically doubles or triples the cost of buying Unity Pro. I am not at all faulting Unity for this and realize they are a business, but if UE4 develops what we need in the future, we will invest there. Fortunately, most of what we do in Unity will port over, unlike T3d. We had to toss everything we did there.

We are not broken, just wiser now. Unity Free is nice, but missing some key features. I would gladly pay for something between Free and Pro in cost if it contained those features. I am posting because I am a hobbyist and I want to be represented in this discussion. I am not posting to demand anything. Just hoping that Unity recognizes people like us and throws us a wee bone.

 

I see. So if a team is made up of both subscribers and flat fee customers, how does that work?

 

that is an entire different question, you are throwing up.. but a good question. Let's all add conditions to the discussion too. (as it also have to do with pricing)

 

If Unity was $2 per month I might consider it....still useful as a quick prototyping tool.

 

I think you are exaggerating the issue of collecting royalties. This business practice is neither new nor especially complicated, and it's used in many industries.

Anyway, they don't have to go out of their way and collect sales data from _all_ users. Sure legally you are obligated to report to them, and pay even if its just 0.03$ but assuming they will strictly control users who make that little is just naive. IMHO they will simply focus on popular/semi popular game titles, where the real money from royalties is, and count on honesty from rest of the users. So once you title gains some visibility and makes money you better be sure to be careful with your reports. And i don't think anyone in their right mind would risk and scam company that can spend millions of $$ on lawyers.

 

Back to the original posts Title, I think it's a tad misleading to think or propose there's a "War" to "Win" as opposed to a "Detante". I suspect Unity wants to compete well, and that's all. There's enough developers for everyone to be happy.

 

Godot.

 

I meant it was a business model of buy something cheap/free now but keep paying for it. While they are obviously not the exact same terms, the concept is the same. I have an app, I give it to you for free, in order to make signifigant progress u must pay me more. To keep making that same progress u have to keep paying. It's not that different from a subscription model. You have to pay to keep getting updates and to keep moving forward. Once you have already bought in to it you feel compelled to stick with it. You see it as a low cost investment and in reality it isn't. Few people work out the math and few people care until they are so invested their only choice is to stop and loose their time and effort or keep paying. As I said I don't like it but that is the model of almost everything these days.