More Charges for Unity Developers?

There is a new pricing scheme in Unity that will affect all game developers on the platform. It’s based on pay-per-download scheme, which only means one thing: developers will have to pay for the accumulated fee for the total downloads of their published games monthly.

Is that a good thing?

A lot of developers are protesting against this. Unity has declared that the developers whose games exceed 200,000 downloads (and $200,000 in revenue) will be charged for each download of the game. It ranges between 10–20¢ per download; that equates to roughly $20,000 minimum if the game published succeeds the target download in the last 12 months.

Before we delve a little further, we first need to understand how this new pricing scheme works, and how different (and beneficial) it is from the previous pricing scheme Unity has used for charging game developers.

The new pricing scheme—Unity calls it as a Unity Runtime Fee. The runtime fee is common for open-source game engines to have some sort of investment returns for whoever uses their platforms to create and publish video games. The reason for this is, of course, because they provide the tools and technologies the developers need to make said games. So, for each time their game is downloaded and played, the developers are charged for it. This is in contrast to a revenue share model, which charges developers a percentage of the revenue that their game generates.

The shared revenues are not dependent on how many downloads have been made on those games; instead, they rely on the sales the games have made.

So, when Unity introduced the new pricing scheme, obviously a lot of controversies will bound to occur. Let’s see what it offers as benefits, and how this creates problem to game developers on Unity.

Runtime fees can be a more predictable revenue stream for Unity

Game engine providers, such as Unity and Unreal Engine, need to track the revenue of each game developed with their engine. This can be difficult for games that are sold through multiple channels, such as app stores, game stores, and crowdfunding platforms.

So, when the need arises when Unity is supposedly charging the game developers for a portion of the sales made for the games, the revenue varies between those channels. Maybe they sell more in physical game stores, perhaps, compared to app stores. They would have to take into account profit gained from physical stores, too, considering other things such as shipment costs for the physical copies of the game.

With runtime fees, it’s much more streamlined.

Games that are published using Unity engine would have Unity Runtime installed alongside them when downloaded by the end user (the consumers). So, it’s a lot easier to track and predict revenue streams based on how many times those particular games have been downloaded and installed, rather than relying on shared revenue that can be inaccurate at times.

Runtime fees can be transparent to developers

Runtime fees are more transparent to developers, who know exactly how much they will be charged for each download of their game. With every product released under out-of-house game engine such as Unity or Unreal Engine, we know that there will be a cut that will be taken from the profit made.

The only problem is that the revenue made from those games remains unknown until the games have been released. So, budgeting can be quite tricky for the developers to avoid unexpected costs.

With runtime fees, developers can simply calculate their costs by multiplying the number of downloads of their game by the runtime fee per download. This can help developers to budget more effectively and to make informed decisions about their game development process.

Having a proper budget can also help the developers to build quality-driven games and make informed decisions about their game development process with the potential customers. So, faithful gamers of the company wouldn’t have to worry about paying an unfair price for the games they download when the games are released.

Runtime fees can be easier to calculate and enforce than revenue share

Game engine providers need to define what constitutes revenue for the purpose of calculating revenue shares. This can be tricky for games that generate revenue through a variety of sources, such as in-app purchases, subscriptions, and advertising. Some may have two or more revenue streams because of this, and often it’s a hassle to calculate the revenue shares for these games.

Because of how streamlined Runtime Fees are (as previously mentioned), both Unity and game developers can lay out the revenue generated from the games published almost instantly. With this pricing model, Unity’s revenue is generated entirely from runtime fees and subscription fees, which means that developers have complete control over their revenue from other channels (in-app purchases, advertising, etc.).

So, when compared to revenue shares where there will be cuts for every channel of revenue streams made, Runtime Fees are a lot easier for both Unity and game developers to manage when it comes to calculating expenses and profits.

Runtime fees can be seen as unfair to some developers

While the benefits of Runtime Fees introduced are present, we can’t help but to see how much this would affect game developers, especially those with games that collect a large number of downloads but relatively low revenue. Runtime Fees can prove to be draining more of their profits.

Try to imagine if small-time developers have published a new game, and the game becomes popular and becomes a trend on multiple platforms. The game would then collect 200,000 lifetime game installs and a total revenue of $200,000 in the span of a year. So, according to Unity’s thresholds, the game is eligible and expected to be qualified for Runtime Fees.

If the game was charged with a small amount of money (or free) to play, then paying for the Runtime Fees would be a massive drain on the developers’ wallet. The fees that apply to AAA titles are the exact same fees that the small indie games are expected to pay. There’s no doubt that there’s a bit of unfairness in terms of collecting revenue streams from published games.

Runtime fees can cause an impact on game innovation

With the risk of having low revenue but high runtime fee, the pricing scheme makes it more difficult for developers to experiment with new game ideas to play it safe. This means a developer might also be reluctant to create a free-to-play game, for example, if he or she knows that the game will be charged a runtime fee for each download. Trendy games that we see on app stores (e.g. Among Us, Fall Guys, etc.) tend to be time-restrained, too.

The games which might appear to be successful in the first year may not be as successful (or even heard of) as they progress through the later years. By then, the games would already be accounted for Runtime Fees, even though the games are practically dead by then with very low player counts.

Downloads and installation of the games may still continue, but developers have to compensate for the losses with advertisement or in-app purchases, which won’t be likely with low player counts as mentioned.

So instead of trying out something new and fun to engage with the players, developers are forced to not take unnecessary risks and stick with making games that they know will keep the player counts high for higher profit made from not only base game sales, but in-game purchases.

All the more reason to expect that future titles will look and feel the same.

Small developers may be at a risk of major losses

This is the most concerning issue with the newest pricing model—Runtime Fees could disproportionately impact small and independent developers. With the flat fee introduced, the developers have no choice but to make sure each player that downloads and installs the game can make up for the Runtime Fees charged (20¢ minimum, but that only covers the Unity Runtime Fees so chances are they will have to resort for higher charges per player).

Unity also confirms that game re-installs by the same player (on a different device) will account for the Runtime Fees as well. This can mean many things to developers: one player is charged only once for the game, but they can re-install it in as many devices as the player can (causing losses on the developers’ end).

There are concerns of griefing and protest to developers, too. If they were to launch a malicious attack by doing multiple downloads and installation of the game, the developers will have to make up for the Runtime Fees collected from those installs. They may also be affected by people who pirate their games, which further adds insult to the already worsening injury.

It’s safe to say that game developers, especially small ones, are at the mercy of the people that download and play the games they published.

Are Developers in Danger with the Runtime Fees?

Yes, and no. Runtime fees can disproportionately impact small developers, who often have limited resources. A small developer with a free-to-play game, like previously mentioned, could rack up significant runtime fees if the game becomes popular. For each download, the developer is charged a Runtime Fee, which may lead to the developer being reluctant to create a free-to-play game, or experiment with new gameplay style for their new titles.

It’s also worth mentioning that the Runtime Fees will be implemented on top of the existing yearly subscription fees for the developers.

Effective on 12^th September 2023, the previous subscription tier “Unity Plus” which costs $400/year is removed from the subscription plans. The existing subscribers will be offered to upgrade to Unity Pro for the same price, for the first year (the subsequent years will be $2,040 annually).

For what it’s worth, Runtime Fees do offer benefits, here and there. But of course, with the fees introduced equally to all game developers, one cannot help but to think that they shouldn’t be “pukul sama rata” to all of them. So, Unity did reveal an update to the Runtime Fees, where they are charged differently depending on the subscription tier they choose.

Unity has also introduced discounts if the games published reach an emerging market rate, where they are charged much less per game install. It is a good sign that Unity does consider this, but everything remains to be seen this upcoming year.

Regardless, these are but predictions of what will happen once the Runtime Fees are implemented. All we can do is to wait and see how the Runtime Fees will turn out, and how the developers adapt to it.