Unity Create President answers 24 Questions | Q&A w/ Marc Whitten

Yeah, awesome, thank you. I really appreciate being on, Jason, and thank you everybody for joining. I'm not going to go over all of the changes here. I'm sure we're going to talk about them a lot. I hope people had a chance to see my letter earlier today or to go through the fact and the other stuff there, but I did just want to hit one part first that's really, really important. And that's just I just want to say I'm sorry. I know it's been a very tough week to hear a bunch of the very well-deserved feedback on the changes we made. It's very clear we did not listen to enough feedback, listen to enough. And so I just really wanted to start with telling everybody here, and frankly the game development community at large, sorry. So with that, I'm happy to talk through any of the questions and just cover whatever you want to talk about, Jason.

Well, the most fundamental thing that we're trying to do is we're building a sustainable business for Unity. For us, that means we do need to have a model that includes some sort of balanced exchange, including shared success. That's really important for the long-term future of how we think about our business, how we think about the engine. And the main reason is really clear: it has to be a sustainable business. We want to keep massively and deeply investing in the engine. We want to make sure that we can build the best editor and runtime for everyone to build the games today and tomorrow, and that's the reason why we work on it. I am very focused on that; it's very important for Unity.

Yeah, there's a long fact with a whole bunch more details, but I think I would just probably hit four key areas. The first one I'll just start by talking about Unity Personal. That's the version of Unity that's free to use. It's used by the majority of all of our game creators. It's not a part of the runtime fee program at all. We made some other changes along with that. The first one is we made sure that people have the option to remove the Unity splash screen if they would like when they're using that particular product. And we're also changing it so that before, Unity Personal could be used up to a hundred thousand dollars of revenue for your company. Now it's two hundred thousand. And again, because we've announced some other changes around sunsetting Unity Plus, that means that you can use Unity Personal and not have to do the splash screen, which is a reason that some people were using Plus. The other, so then if we move on to the runtime program, the runtime fee applies for people who are over both a million dollars in trailing 12-month revenue, money they've made over the last year on an ongoing basis, and a million engagements with new users essentially. And for those users, the following changes: the first one is this is with next year's LTS, which would be 2023 LTS shipping in 2024. So it doesn't impact any games that have currently shipped, and it's very clear to us that having it start on a future version where everybody can make the choice to use it is really important. The second thing we heard along with that is that people need to know that they can rely on a set of terms when they start using a version of Unity. So we're going to make sure that's the case. There are even some pieces about things like the GitHub repo, which, by the way, prior to last week, I did not know existed, and now I know a lot about. We're making sure it's already back up there; it has all of them in there. Obviously, our website will always have our legal terms and terms of service and all of those sorts of things, but we're going to make sure it's also on GitHub so people can track that. And then the last piece is that the revenue share or measuring is based on this calculated amount of initial user engagements that you can do. And if you do both of those, you'll always be billed the lesser of whatever that calculation is. But it's also up to you; if you only wanted to do one of them, leave the box blank whatever. And again, that's only for those games that were over those thresholds. Sorry, one more minute. The other key part is it's self-reported. Both numbers being self-reported, both on the revenue side and on the user engagements.

We did. We talked to partners, large customers, small customers, lots of internal people. We didn't listen to enough of their feedback. Just want to be clear: we should have listened to more of their feedback, and we need to do better. And I can tell you, as an example, on Sunday, I think it's been a long week, so the days post together a little bit. On Sunday, I think we put on X a kind of a statement saying that we'll get back to you in a couple of days. The reason we didn't get back to you in a couple of days is because we were, as we were working through the plan, we were going back and talking to big customers, independent developers, partners over and over again to get that feedback.

We think it's going to be cheaper for a lot of games. So listen, we're trying to build a model that we think is fair and is a good value exchange that works for games. We think that in a pretty reasonable number of cases, that's actually a smaller number, and we think that's good. Now, what we heard from a lot of really good feedback is that there were cases where people first off couldn't plan because they're like, 'Well, I don't know, maybe something's going to go crazy,' or 'I have this particular scenario, and that doesn't work.' So adding in the 2.5% revenue share as an option, you can only use that or where you have the both, and so you can always plan for it and hopefully do better. It definitely was, frankly, in my opinion, made the plan better based on what we were trying to do. So it was really good feedback.

No, that's absolutely the plan. The plan is that choice.

Well, listen, this is my part of the business, and there are a lot of people obviously internally that have worked on this. The executive team has worked on this. But I'm responsible for what we're doing inside of Create. The entire executive team has been a part of this, but I'll also say this is really important for Unity. We have to focus on building a strong, sustainable business that allows us to continue to invest in the ways that we want, so we can build... make billions off of that to fund it, which would be nice.

No, I agree. I think it would be nice, but it's definitely a good dream.

You know, companies change their terms over time frequently and constantly and consistently because, frankly, the world changes. Gaming is a very dynamic world; the world we live in is dynamic, and there are always new things being added or whatever. However, I want to back up from that and say it kind of comes back to your trust point, which is I think one thing that I heard a lot is people very deeply need to know what they're signing up for when they pick a version of Unity to build their game on, and that they can be sure that they can continue to use that. And I think that feedback, there are a lot of other things that come along with trust, so I just want to be clear, but that feedback is really, really, really super clear. And that's one reason why, in what I talked about today, we're going to make sure that you can do that. It also does come back to the GitHub thing. You know, terms change between those two. However, we're a community. We're heavily used by a community of game developers, so another way that we can make sure that that's clear is to put it in the types of tools that they use, like repos and GitHub, so it's easy to track. So for me, that was an obvious one that we should also put back.

For sure. And you know, that's one of the key things. This was an announcement. It was an announcement a week ago; it's an announcement today of something that's coming in the future. And we're going to be providing a lot more details around it. But I'd actually say something even more specifically: we don't have all the answers right now. That's one thing we heard very clearly over the last week. And so we're not putting out 'here's this perfect thing right now' because we're actually engaging with our customers at every level, our customers and our developers, and listening. And we're going to work on that transparently. And yeah, there'll be a lot more details that are coming out over the next weeks and months for this program. But I will also say those will be part of a conversation that we're having so people understand how we're thinking and we're getting the feedback from our game development community.

You know what version of Unity that you're using? We're going to make sure that you're clear on what terms are associated with that particular version. This is actually the same as Unity Personal. When we say that you can use Unity Personal up to two hundred thousand dollars, we're also not tracking that. We're just telling you the rule. We're not tracking or anything added in.

Yeah, well, this program is associated with our licenses for our developers and the publishers that are publishing those games. And the rules are different on all of those. And in some of those it might be hard to track something like engagements, and so that's why there are things like a choice for revenue share or engagements. And it's also why there are not 100% perfect details on exactly how you count all of those, because we're engaging with our community to make sure we come up with really good examples for information that you have that track the intent of what we're talking about, that's easy for you to self-report. And we put some of that into the fact today. You can see some of the examples, and we're listening there and we'll be building even more examples and documentation for everyone.

Yeah, I'm going to sound a little corporate here for a second while I use the words around it, but I'm just going to use them and then try to explain them a little bit. The goal is as simple as saying that it's a legitimate user of your software on a particular distribution channel. So, what's a legitimate user? A legitimate user would be an actual user, not your automated process, not your automated use, not whether there was piracy, not someone that had bought it and instantly refunded it, but a legitimate first time that someone was engaging with your free-to-play game or your paid game. What's a distribution channel? Well, an app store is a distribution channel. If you have gotten the same thing in my library from a store that I can use on a couple of different devices, great, that's one, not two. There are a bunch more examples around that in the fact, and we're very committed to making sure that we give more details around that. But our intent is very simple: the first time that your game, using our runtime, engages with a legitimate user on a distribution channel, use that as an account. And then, again, we think that many times that will be much less than this 2.5% revenue share, and so you could pay less through that, or you just go to the revenue share if you didn't want to track that.

Exactly.

Yeah, the whole thing is self-reported based on data that you easily have available. Not, like, 'I have to track some sort of user behavior that's different than I've ever done or anything like that.' You don't have to go add in analytics or some tracking or anything. You just look at whatever your numbers are and then put those into the page.

Yeah, that feedback was super clear. So we're trying to make sure it's easy for our game creators as well.

Sorry that I had to use the corporate jargon, but the truth is there's just a lot of different scenarios in games. Some people might say, 'Why isn't it sales?' but sales doesn't work if it's a free-to-play game. So we're just trying to make sure we can clearly define that in a way that works for a bunch of different ways that Unity is used.

Well, listen, we've seen all of the critical feedback, and it really hurts to read those types of things. And it's based on what we said and not getting the feedback. So I think those are real reactions that people had, and it's tough to see. My job, our job at Unity, is to make sure that we build the best product, the best platform that we can, so that you can build great games. And we're going to focus on that and hope to give people a great option. If we don't build a great game platform and a great product, they'll go somewhere else, and that's why that's our focus.

Yeah, well, listen, our goal is to build a sustainable business so that we can continue to invest. But the key thing I would say is the majority of our users pay neither. The majority of our users are using Unity Personal, which is free. For games that pass those really high thresholds, there would be the runtime program as well. We feel like it's a balanced program that allows us to invest in the way that we want and be able to deliver the features that will make it great for people building the amazing games that get built on Unity, both today and tomorrow.

I mean, I listen, I see all of it on any channel where we get feedback. Obviously, we see all of the sentiment. But we're just focused on building great games.

Yeah, listen, we were going to do a business model transition that is new and different, and there's a lot to work through there. So obviously, I would have probably engaged in the conversation earlier, listened more, been more consistent and clear with some of the information we put out there. A good example is we have a calc... and the plan today is a great plan for Unity and I think it's a really strong plan for creators, and that's because we got better feedback and it made us build a better plan. So candidly, what I would do if I went back is I would get that feedback.

Yeah. On financials, we had a really reasonable second quarter, and we're optimistic about the path that we're on. But we're also really focused on making sure that we have the sustainable ability to continue to invest in where we're going. I mean, it's like I'm saying the same thing over and over again. I don't really mean to be doing that sort of repeated thing, but it's the truth. This is about making sure that this massive investment that we put into our engine and tools is one that we can keep doing, because for us, that's the focus: making sure that we can build the very best platform that we can.

This is not about, 'Hey, we need to do something for the next three months or something like that.' This is about setting up the foundation of the company. This program is critical for us for the foundation of the company to be able to continue to invest for a very, very long period of time. So if the shape is like this, a little shape that goes like this versus being earlier, that's less relevant than making sure that we have the right program that works for our creators. That's why I believe that this is a better program, because I think we've got great feedback to make it a better program, and it works for Unity.

Well, I'm not going to accept the word stagnation because we are extremely focused and have been for years on a huge amount of things that we're putting into the engine. And by the way, I know we get a lot of feedback where the engine or the editor doesn't work in the ways that people want, and there are things we could do better. So I'm not trying to say that, but we are focused in every one of our releases on putting out a bunch of new stuff. The 22 LTS, I believe, was a really great LTS. We made a ton of progress on things like DOTS 1.0, multiplayer, and other features. There's way more for us to do, but we invest across an extraordinary number of platforms to make sure that Unity remains performant and easy to use. And I believe the feedback we get where things aren't perfect always pushes us to do better.

Yeah, no, Unity is still my favorite engine. It still does the most stuff that I need to do, so I'm happy with it. I haven't had a whole lot of complaints personally. I know a lot of people have specific complaints about different systems.

Yeah, no, I'm happy to answer it. The simple truth is that all of the key senior executives have extraordinary legal rules on when they can trade stock. It sells on a certain number of times, and you have no control over it because the only way you can actually trade the stock is to make sure it trades in a way that you have no control. So that stuff happens, and every time it happens, someone says, 'Aha, they did this thing,' when typically it's either that automated plan or some shares were granted and then taxes were being sold. That's the general situation. I don't know about a specific case, but I will tell you that I do see that a lot. That particular one comes up every time anybody gets reported, because they all have to be reported publicly, but they're all on automated plans.

I assume the whole board... he said 'we,' not 'you.' I think he would put himself in that. He's on the board, the board was in all of those sorts of things. And yeah, he doesn't like disappointing our creators any more than any of us do.

Yeah, that's a good time for water too.

There's only one way to answer that, and that's with actions, not with words. So the first thing I'll tell you is I'm committed to making sure that we continue to work as hard as we can to earn your trust. That said, actions show that, not words. Here are a couple of actions we're taking today. Number one is what I said about the terms of service, to make sure it's in there so you can see action around that and see it inside the actual terms. Number two is why we are doing things like putting the GitHub repo back up, because we want to make sure there's also visibility. That's another way we can make sure there's visibility into our actions and people see it. But I totally get that trust is easy to lose and hard to earn, and we have to show it. You have to decide on your own whether to trust me.

Well, we're not going to. Someone told me that bold text is not legal. Is it okay? We're putting something bold in an email, and it's why we're going to make sure, like the repo, we'll make sure we keep putting it on the website including what changed. We'll make sure there are clearer systems there. That's how we're showing it. I don't know what other actions I can take other than that, but that's what we're going to try to do as a company. It's just going to take some time, probably.

The anger that we've justly received this week from our community is part of why I would say you should pick Unity. We have an extraordinary community that builds extraordinary resources. It makes it easy for people to work with each other and learn things from each other. We're going to try to continue to make sure that we build tools that continue to be there. And again, you definitely have choices, and it's our job to make sure that you feel like ours is the best choice.

Go ahead.

Well, first off, for those that are on Plus—which, by the way, there's not a ton of our users that are on Plus—but for those, we'll see what the plan is around sunsetting it. That also includes an offer for people if they wanted to get a special offer to go to Pro or go down to Personal Edition. We'll make that the case. But we'll make sure that going forward, if you're on a Personal Edition, on 2023 and beyond, you can not use the splash screen.

Yeah, I gotta say yes. It's crazy. I want to make sure that everybody wants to use this Unity splash screen. I know that a lot of...

Yeah, I think... so we have what am I going to do and what does the company do? How is it a process, not me individually?

I agree. So we engage a lot across the company with developers everywhere of all types. I think the thing the last week has really shown is there's talking, and then there's listening, and then there's doing it iteratively back and forth in a conversation. I think the part that we need to do better is: we get information from a lot of people, but are there other ways that we can make that a deep part of the planning that we do? Inside Unity, the Unity employees talk to their friends in game development all the time and are constantly getting feedback from them, but I want to make sure that that is represented in our plans.

I think we're a game developer-first company. I'm not trying to cop out on that question because I'm going to come back to it, but our job is to listen to our game developers where they're trying to build games and then go support those platforms as well as we can. What I think is awesome about Unity is that Unity works to make it easy for you to build a game and ship it across the platforms that matter to you. Mobile is an incredibly important platform for many of our creators, and obviously we're going to continue to invest in that, just like PC, just like consoles, just like VR devices or new devices or whatever the next thing is. Because if developers are going there, then that's where we want to make sure we support it well.

Yeah, to me there's two things we can do. I'll just call it trust and verify. Trust and do, and verify. So we're saying it very clearly, we're going to put it in our terms, and then we're going to make it clear and easy to track by making sure it's in our GitHub so that you can check to see whether there's something that's changed in any of those terms of service. That's the way we're addressing how we do it. But yeah, I think that's the answer.

Well, our focus is on self-reported. First off, I'm not the deep technical expert to give a deep technical answer on anything. I wouldn't try to pretend to be because then I would really get picked apart. But the answer is it's self-reporting, and our focus is on making sure that we're clear on data that works, that's easily accessible, that you have store reports and things like that. And if you don't want to do that, you have a choice and you can just do the 2.5% revenue share. And by the way, we are...

I think this is a really important, critical program for Unity. I think what we announced last week, and we had some changes for today, it's a critical foundation for the company. I think the choice is a good thing. I personally believe that when people do it, they should try the calculator, try it with your numbers, see whether it works for you or not. They might find that they're going to pay less if they do it based on the revenue share. So yeah, I really do believe it's going to be a strong program.

Well, listen, this is a transformative business model change, something we're really focused on. When we were working on our models, we expected that the vast majority of people would pay two to three percent, and often less. One of the things we heard when we put it out there is that even if that was the case, it was hard to plan for it because there are these outlier situations that maybe you couldn't control. For some cases, we thought, 'Well, if there's a case that doesn't work, we should have communicated this better and planned for this better.' So we added the revenue cap to give people choice. The real fundamental idea was always that this was going to be somewhere around two to three percent. We're frankly just building on this transformative business model.

Yeah, by the way, we didn't help either, right? Because as soon as it came out, we didn't have the information to make it clear. But even beyond that, the plan that I think we have now is a better plan because it gives people predictability and choice.

Well, listen, I've been really focused over the last week on getting this particular plan updated and making sure we could get back out. I think the idea that you just gave is a really great idea—polling, putting it in the editor, and finding other ways to connect is awesome. But yes, we will do it. I don't have any other key things to talk about there except for one that I'm really excited about. This is our first real in-person Unite back this year. I think one of the best ways these things happen are at GDC. We did a hybrid one last year, but the first real one of being back in person. I think we miss having that. Beyond pitching Unite, the actual thing is not having as much of that where devs themselves are all together with Unity, talking about where we're going. I'm glad we're getting back to that because I think it's really important.

I think I've gone through all the questions. I just want to say thank you. I love this community. I love being part of it because of this extraordinary community of game creators building extraordinary games. If there's anything the last week shows, pulling Unity out of it, it's the extraordinary passion that everybody here has for what they do—their livelihood, their games. It is inspiring. I know we have work to do. I know that this announcement, while I feel very strong about the set of changes we announced, I feel very passionate about this transformative business model. We have work to do to continue to earn your trust every day, to make sure that we build the best version of Unity we can. So thank you for the feedback.

All right, thanks. I really appreciate the time, Jason. Thank you everybody for being here.