https://www.gamesindustry.biz/unitys-self-combustion-engine-this-week-in-business

$1.3 billion – Unity’s lifetime accumulated deficit as of December 31, 2021. Unity has never had a profitable quarter in its history. It has posted modest operating profits in the past three quarters for the first time ever,

Unity lit money on fire for decades to buy a market advantage that overrules the basic economic incentives that supposedly ensure free markets work best for customers. It was successful in doing that because it’s very hard for a sustainable business to compete against one that is fine losing billions of dollars.

First, you make yourself essential to the market, even if it costs you billions to get there. Then once you hit a threshold – let’s say, I don’t know, 70% of the market – you lean into the enshittification process. You charge more for your services, you give your customers worse terms, you turn the heat up slowly and continuously, confident in the knowledge that people are so locked in to your business and have so few viable alternatives that they may grumble but they will ultimately put up with it.

And it’s such a common strategy in so many industries today that there’s just no sense of horror or outrage from the onlookers. Industry watchers and Serious Business People have seen this play out so many times they just acknowledge it’s happening and treat it as if it’s a perfectly cool and normal thing and not illegal predatory pricing.

I think this new Runtime Fee makes perfect sense from a mile-high point of view, if you think about Unity as a business where you just turn whichever dials and pull whatever levers will make the numbers go up the most.

The only problem is it makes no sense at all if you instead think about Unity as a game development tool that game developers should want to use.

https://www.pcgamer.com/why-every-game-developer-is-mad-right-now-explained

https://www.axios.com/2023/09/13/unity-runtime-fee-policy-marc-whitten

“The uproar is primarily driven by two factors: Unity is attaching a flat per-install fees to games that use its engine, and it’s arbitrarily scrapping existing deals and making the changes retroactive. 

The policy announced yesterday will see a “Runtime Fee” charged to games that surpass certain installation and revenue thresholds. For Unity Personal, the free engine that many beginning and small indie developers use, those thresholds are $200,000 earned over the previous 12 months, and 200,000 installs; one those marks are met, developers will be charged 20 cents every time someone installs their game.

Another big issue is that Unity has made this change retroactive: It supersedes any existing agreements with Unity that developers may have made, and it applies to games that were released even before any of this happened. The revenue threshold will be based on sales after January 1, 2024, when the new pricing system takes effect, but sales that occurred before that date will count toward the install threshold. 

https://www.eurogamer.net/unity-bosses-sold-stock-days-before-development-fees-announcement-raising-eyebrows

Unity executives sold thousands of shares in the weeks leading up to last night’s hugely controversial announcement it will soon charge developers when one of their games is downloaded.

Behind the scenes, CEO John Riccitiello shifted 2000 shares last week on 6th September, as noted by Yahoo Finance, which noted this move was part of a trend over the past year where the exec has sold more than 50,000 shares in total and bought none.

EDIT 20230919

https://www.cartoonbrew.com/artist-rights/vfx-giant-dneg-puts-forth-new-salary-reduction-proposal-after-worker-backlash-to-initial-proposal-232735.html

Revised Proposal: Initially met with backlash, DNEG has revised its proposal over the weekend. They’ve introduced a third option that focuses on reducing work hours instead of salaries, along with additional paid leave to compensate for the income reduction.

1. A salary reduction of 20% to 25% for seven months, with paid leave to compensate.
2. A temporary 50% salary reduction, supplemented by a company loan, totalling 90% of the original salary, repayable over three years.
3. Reduced working hours to a 3-day week for seven months, with no hourly rate reduction.

https://www.linkedin.com/posts/avuuk_animation-visualeffects-dneg-activity-7107674426275442688-Fd1d

Today, we want to address a concerning development at DNEG. They very recently announced pay cuts of up to 25% for its employees, coupled with a rather unconventional approach to compensate for these losses through ‘loans’, which their staff need to repay overtime.

As of now, DNEG is imposing these pay cuts for a period of 7 months. To ‘help’ offset the financial impact on their staff, the company is offering ‘loans’ to their employees. While offering financial support during challenging times is usually commendable, the repayment terms are causing deep concern within the Animation & Visual Effects community, especially around their legality.

The loan offered by DNEG comes with a significant catch: employees are required to pay back the loan over a three-year period. This means that even after the pay cuts are reinstated, employees will be obligated to allocate a portion of their salaries to repay the company. Aledgedly, there is no interest on the loan (tbc). This approach has sparked a considerable backlash within our industry.

We at the Animation & Visual Effects Union voice very strong concern and opposition to the pay cuts, as well as the loan method. We believe pay cuts should not be compensated through loans with long-term repayment plans, placing a heavy burden on the employees who are already facing financial challenges.

This situation underscores the importance of open dialogue and collaboration between employers and employees during challenging times. While businesses often need to make tough decisions to navigate economic uncertainties, it’s crucial to strike a balance that doesn’t disproportionately impact the livelihoods of their dedicated workforce.

What can be done about this?

If you are a member of the Animation & Visual Effects Union, get in touch with us immediately and do not accept any pay cuts yet. You can email your BECTU official Stefan Vassalos stefan.vassalos@prospect.org.uk to get advice and organise with your colleagues at DNEG.

Remember, you MUST give your consent for a paycut. It is ILLEGAL to impose a cut without it. You DO NOT have to consent to a pay cut. Legal action can and will be taken against paycuts without consent. Anyone affected please get in touch with us immediately so we can represent and protect you and your livlihood as much as possible. BECTU has the power and resources to challenge moments like this, so it is imperitive YOU take action and contact us. Talk to your colleagues and get in touch. It is only through solidarity and collective effort that we can address these challenges and shape a brighter future for our industry.

Please feel free to share your thoughts and insights on this matter. Your input and perspective are valuable as we navigate these unprecedented times together.