Unity CEO John Riccitiello out after developer rebellion

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Game tool maker Unity announced Monday the abrupt retirement of its colorful CEO, weeks after the company announced a change to its license scheme that left developers fuming.

John Riccitiello, Unity's now-former CEO. Image via Bloomberg Finance
John Riccitiello, Unity's now-former CEO. Image via Bloomberg Finance



Unity, which got its start almost 20 years ago on the Mac, provides game developers with tools to help them create and monetize games, then deploy on a wide number of platforms including iOS and macOS. Unity maintains dominance in the mobile games space, competing with Epic Games' Unreal Engine for the attention of PC and console-oriented developers.

Games made using the company's tools are some of the most popular found on Android devices and iPhones, such as Niantic's Pokemon Go, Blizzard's Hearthstone and Ustwo Games' Apple Design Award winner, Monument Valley. Apple identified Unity as a development partner for the Vision Pro when it first unveiled the device.

Retired "effective immediately"



In a press release posted after Monday's market close, Unity announced that John Riccitiello retired as the company's chairman, president and CEO "effective immediately."

It's an abrupt change to the leadership of Unity for almost the past decade. Riccitiello, who took over the CEO role from Unity founder David Helgason, oversaw a number of changes at Unity during his tenure, including numerous acquisitions, an Initial Public Offering (IPO) and rounds of layoffs.

Unity board member Roelof Botha steps into the chairman role vacated by Riccitiello. Botha praised Riccitiello's leadership on both the board and in the executive C suite, guiding the company through its IPO and other challenges.

"John joined the Unity Board in 2013 and stepped in to lead the Company in 2014, at a time when we faced significant challenges," said Botha.

Prior to Unity, Riccitiello served as video game publisher Electronic Arts' president and CEO. He also cofounded venture capital firm Elevation Partners.
Riccitiello is an outspoken figure in the game industry who has drawn a fair share of controversy during his Unity tenure.

A former executive at Unity accused him and several others of sexual harassment in 2019, in a case that's still ongoing in the California courts.

In a 2022 interview, Riccitiello accused developers who don't consider monetization early in their creative process to be "f---king idiots," later apologizing after Unity's customers took issue.

The quest for profits



Riccitiello oversaw dramatic changes to Unity over the years but was never able to make the company profitable. He emphasized revenue growth over profits and defended the company's portfolio of acquisitions as important strategic wins.

The quest for profits led Unity to implement sweeping changes to its licensing which will be implemented beginning in January, 2024.

But it was Unity's fumbled September decision to change those licensing terms that would seem to have put the final nail in the coffin for Riccitiello's CEO tenure.

It was then that Unity announced plans to impose a convoluted new runtime fee policy to replace its flat fee per seat license model. Unity presented the new fee structure as pro-developer, compared to a revenue share, pointing to carveouts regarding income and volume.

Many developers who did the math themselves said they'd end up paying much more. They complained that Unity failed to account for bundle deals, demos, charity giveaways and other circumstances where paying per install would be unfairly burdensome, and questioned the company's plans to use proprietary software to track installations.

Riccitiello initially planned to address the controversy at a town hall-style meeting, but those plans were scuppered following a "credible threat" made to the company's offices, allegedly from a Unity employee.

Unity announced changes to the licensing plan to appease critics almost as soon as it was announced, and ended up reworking it entirely and walking back some of the more controversial aspects all together, such as the proprietary tracking system.

Since then, Unity and its executives have done their best to stay out of the limelight.

Replacing Riccitiello as CEO and president is IBM's former president Jim Whitehurst, who left IBM in 2021 during a senior management shakeup. Whitehurst is an interesting choice -- unlike Riccitiello he has no prior game industry experience, having come to IBM through its acquisition of Red Hat in 2019, where he had been CEO. Prior to that he worked at Delta Air Lines and Boston Consulting Group.

Unity reaffirmed its previously announced third quarter 2023 guidance, which it will report on November 9, 2023. In August, the company said it anticipated Q3 revenue between US$500-$540 million, in line with analyst consensus estimates.

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Comments

  • Reply 1 of 6
    williamhwilliamh Posts: 1,036member
    If they want to go right out of business, Unity could hire the CEO from Epic.
    zeus423danoxwatto_cobra
  • Reply 2 of 6
    MarvinMarvin Posts: 15,374moderator
    The problem with these revolving-door CEOs is they just walk away from the mess they create without a care in the world. This happened before:

    https://www.theguardian.com/technology/2013/mar/18/ea-ceo-john-riccitiello-resigns

    This guy apparently made over $400m:

    https://wallmine.com/people/85761/john-s-riccitiello
    https://www.benzinga.com/sec/insider-trades/u/john-riccitiello

    He almost destroyed the company with the latest move, which was made because they don't know how to keep their costs under control i.e poor management. If people at the bottom do a terrible job over and over, it's back to low-paid jobs. With people at the top, they just sail off to a comfortable retirement and leave everyone else to clean up after them.

    He had to go, even after improving their terms, there was no way companies could continue trusting the people who made the recent mess.
    williamlondonwatto_cobra
  • Reply 3 of 6
    danoxdanox Posts: 3,043member
    Roll up your sleeves Apple, in the end that’s what it’s gonna come down to Unity and Epic are untrustworthy in the long run.
    watto_cobra
  • Reply 4 of 6
    Can I just say that I find Unity ads to be the most heinous crap known to mankind? There are annoying ad systems and then there’s Unity Ads.

    I'd much rather have my eyeballs ripped out my nostrils by rabid wolverines than have to endure those crap ads with tiny close buttons that forcibly open App Store panes until a hidden timer runs out.

    The mere fact this idiot ran EA says everything. A monster company seeking only to pad its coffers rather than produce anything of real value. They ruined Real Racing with Real Racing 3 and they’ve not truly done any real development on what they did produce.
    watto_cobra
  • Reply 5 of 6
    Unity is going to get loaded with debt, squeezed out, and sold in a few years.
    watto_cobra
  • Reply 6 of 6
    MarvinMarvin Posts: 15,374moderator
    danox said:
    Roll up your sleeves Apple, in the end that’s what it’s gonna come down to Unity and Epic are untrustworthy in the long run.
    There was an article out today about Disney execs looking to buy a major game developer/publisher:

    https://www.gamesindustry.biz/disney-reportedly-looking-to-acquire-major-publisher-like-ea

    EA is valued at ~$35b. They have a healthy amount of assets and yearly profits:

    https://www.macrotrends.net/stocks/charts/ea/electronic-arts/net-income
    https://www.macrotrends.net/stocks/charts/EA/electronic-arts/total-assets

    Maybe Disney and Apple could buy EA together. They could put some good Disney exclusive/timed-exclusive games in Apple Arcade. Apple would get one of the best game engines with Frostbite.

    Apple could open-source the Frostbite rendering engine on top of USD as a library for multiple platforms and 3rd parties can make code-runtimes to manipulate the USD. 3D apps already support USD so they don't need a full-fledged editor and don't need to build a code-runtime themselves, although they would likely make one in Swift. Frostbite renders large scale environments very well (5:00, virtual skiing on Apple Vision Pro):





    Supposedly the engine was bad to work with but that was the tools (code-runtime), which can be replaced while keeping the rendering engine. One of the problems game engines have is they tie the code-runtime to the rendering runtime. This is why the Mass Effect remaster got stuck with Unreal Engine 3. It seems wasteful to remaster one of the biggest game franchises without upgrading the visuals to a better lighting engine but they couldn't because Unreal removed the scripting engine (code-runtime) they used in version 4. If they were separate, they could upgrade the rendering runtime but keep the old scripting runtime:

    https://www.gamespot.com/articles/why-mass-effect-legendary-edition-doesnt-use-unreal-engine-4/1100-6487003/

    Franchises Apple would get would include The Sims, Fifa (the new branded version Sports FC), Battlefield, Mass Effect, Dragon Age, Need for Speed, Star Wars, Madden NFL. A few of these are service titles that have a long lifespan. They can keep the games cross-platform with cross-play but add exclusive items/DLCs for Mac/iOS and there can be timed-exclusives.

    It's a big company with over 12k employees and a big purchase but split between Apple and Disney wouldn't be as bad. Apple gets a good engine for Apple Vision Pro and making it available for 3rd parties makes it easier to use Metal. They'd get big franchises on the platform almost immediately.
    edited October 2023 watto_cobrarundhvid
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