Unity Special: From $200/month fee to $187k. Death kiss to (small & hypercasual) developers

Dev is Dev does on quite well for themselves uh essentially they calculate that uh in an Excel model today that their Unity fees will go from $200 a month to $175,000 a month on January 1st a month in unity fees essentially that's a 8,000% increase this is no [ __ ] gaming podcast 2 and a half gamer sharing actionable insights dropping Knowledge from our day-to-day user acquisition game design and AD monetization jobs we are definitely not discussing the latest industry news but having so much fun let's not forget this is a 400 a.m. conference discussion Vibe so let's not take it too seriously yeah okay start and then I'll do the int the in should I do the int do like the first first and then you you can

welcome everybody uh this is session well this is actually very special session about unity and uh I'm Michel aner I'm Felix braberg and that your hosts welcome welcome welcome welcome so yeah so this is a special one so we're recording this podcast quite last minute uh on the back yeah on the back of the bombshell news today that Unity is changing his pricing structure for developers who use the Unity gaming engine to build their apps uh for those who don't know about 70% of all mobile applications are currently built with unity according to Unity themselves about 230,000 developers worldwide operate around 750,000 mobile applications with their engine uh no matter how you phrase that uh anyone can see that any changes to the unity pricing structure will have massive impact on the mobile

ecosystem uh I mean there's always like in a company's right like it's always in a company's right to change his pricing structure but wow this came as a massive shock to the like yeah to the entire ecosystem uh yeah before people have hard attacks this is enforced from first January of next year yeah yeah as a I'm not done yet so as a lot of you listeners know the unity engine has two components the unity editor and the unity runtime which is the code that's actually executed on your phone so Unity is introducing a new fee based on the runtime called the runtime fee that means that developers will be charged based on a flat fee per installed instead of a fixed monthly fee so how much will devs be charged well that depends completely on how much revenue you're earning and in what GE essentially to make things simple MTI will go into this uh in emerging market

installs will be charged at a 0.05 like Cent so a fraction of a scent to anything up to two cents and tier one GEOS this will go anywhere from one cent up to 20 cents per install so M I will put this from U perspective put this uh uh table on the back in the post production so everybody can see how ridiculous it looks like oh it's it's it's the table that you're going to see for next month everywhere it's going to you know be already all over the link in every every [ __ ] slack Channel had it everywhere everybody's talking about it and we are talking about it as well uh you perspective well terrible I mean uh not great not terrible look so in terms of the campaigns and all of the fun uh it stays more or less the same the main thing that changes here is the CP of the LTV

equation which gets a little bit more complicated since the CPI needs to absorb this [ __ ] U Unity feeds now and also it's it's based on the revenue in the last 12 months but also insta threshold which is absolutely ridiculous how is this calculated do we know the detail so basically you need to hit a certain Revenue threshold and then after that that's when these like CPI costs basically start so for those people not seeing the table so there are some you know everybody SE the table but let me explain so if a game or app meets the minimum fresh threshold for eligibility the unity runtime fees is calculated based on the the applicable rate so the number of installs the country of installs and the users Unity plan which is multiplied by the number of eligible installs amazing makes sense right so there's a there's example that Unity stated in the in the

FAQs let's look at the hypothetical game well guys the that hypothetical game is now dead so thank you very much uh but anyway so so so the unity team pro uh um modeled this so revenue from last 12 months was $2 million lifetime installs 5 million so the unity runtime fee will apply to this game as it surp surpasses the one million revenue and 1 million lifetime installs threshold for Unity Pro let's look at the installs in the last month so the prior to mon month installs standard fee countries 200k prior month installs Emerging Market fees uh fee countries 100K so the fee is calculated for all of these [ __ ] numbers 23k for all the inst activity so they they have also this um formula here

which is 100k time 0.15 installs because of the cents yeah 15 C per standard countries and 7 and a half cents per emerging countries no no sorry second year one cent which is I mean this is all super super complicated so yep lot of uh lot of interesting calculation are going to happen in the next uh few months so there is the have you talked about organic yeah that's that's the funny thing in there there is no notion about nothing no differentiation between say anything if it's paid or or organic or if it's like it's just installs the same thing is they they kind of like have the revenue so it's gross revenue so amazing amazing amazing so how did they calculate the revenue do you know so the revenue where is that uh I think

you mean the 2 million exact model game yeah so revenue from last two months and it's it's if I understand cut exactly before the cut so amazing yikes yikes was that's aggressive so I was kind of speculating like if this uh table which says Emerging Market uh means actually HQ of the company or Emerging Market is an install from those GEOS cuz if it was the you know the HQ I could see a lot of companies moving to these countries they HQ I don't think I don't think developers are that lucky yeah I know yeah no based based on like the location of the yeah it's install inst fortunately I was already like I would move by the way if you're finishing the cost just so people know like there's also like right under our model game like do I still need to pay for my Unity subscription plan yes you do so it's on top of this oh I didn't know that oh wow if you did forget what

are you talking about this is Unity runtime fee so it's it's on top of everything else top of everything else so I spoke to a Dev a little bit before just to give our listeners some contest like so basically this a Dev is a Dev do on quite well for themselves uh essentially they calculate that uh in an EXL model today that their Unity fees will go from $200 a month to $175,000 a month on January 1st a month in unity fees essentially that's a 880,000 per increase in pricing much 80 times three yeah with no eight like 8,000 time per increase 8,000% increase like in three months so they know it's coming uh wow B if if they keep the same install activity yeah yeah I mean I mean there's

only one thing you can do right like you have to cut down on installs already right shut down the app in the countries to coming from that's the thing so I think you can uh you can then pay the unity Enterprise or whatever uh you need to have at least like one million but the revenue is is this revenue iips or is it Revenue both ads and or like how let me read it let me read it here or apps total revenue includes all generated all revenue generated without limitation to retail sales inapp purchases subscription fees web payments offline payments ads Revenue Etc total revenue calculated without deduction including any re relevant Digital Store Fe the thing like they only see Unity revenue on ads right unless you're on level play all when you're on level play it's it's a different discussion that we can have

but they don't have the the revenue coming from different ad networks in that case which I mean if you think about it in this uh weird table if you pass the the threshold of one million downloads and then 1 million Revenue as well you have one cent per install so you kind you are kind of incentivized to have like higher volumes if you have I mean of course you need to find the sweet spot right because obviously like if you are the smaller developer in this equation then you are [ __ ] basically 20 cents installs 20 cents per install is quite High anyway how can they even then sorry I I don't understand this so how can they even track the add Revenue it's only from Unity must be it's only for how how else like which other channels or networks they can if you're not using the mediation on Unity does

the does the unity SDK like the main one uh when you actually build the game does that track stuff like this so it tracks IPS rights yeah sorry so there's a giant loop hole here but I don't potentially do I understand this correctly there's a giant [ __ ] loop hole that you can you know well use here like how then this track then b game thing but you know you have the install threshold anyway so but if a game is big on ads you know like Unity is still going to make you know sometimes you 10K a day right so it's gonna roll over it's just about getting to that point so then you need to find the the sweet basically so from a from a UA perspective like if you know this is happening in three months what would you advise M well I mean in terms of um the UA what would I do maybe I I would just spend [ __ ] ton of money to get as many

installs as possible and then retarget those guys afterwards uh but hey it's almost Q4 so this is not going to be like very cheap exercise because as memes and Twitter post say if you buy our unity game please don't install it just buy no installs afterwards no I mean J's aside I would spend as much money as possible uh and then move to some other engine because it doesn't make any sense because you know in terms of the U is another component of the CPI and you need this to you need to take this into consideration when thinking about the payback periods budgeting and basically everything so obviously if you're a big developer this is I mean penis I mean not it's not great obviously but it won't kill you if you're a small developer and 20 cent and you're adding 20 cents to your CPI this is just going to kill your margins right away or if you're hyper casual or ad dependent Studio or well I guess yeah I mean not

only small developer but also hyper casual which uh you know CPI are quite low if you have to and this is also like the same thing in the in Emerging Markets it just doesn't make any sense so sometimes in like tier 4 Gs I have uh CPS one or two cents depends obviously on the game but if if there if I need to pay an additional two cents uh for for the installs it's just 100% increase this uh so thank thank you Unity but I I had this um this kind of uh operations in terms of the UA in these tier four GEOS where I had literally like one or 1.5 Cent cpis but the the LTV was like 1.9 Cent for example so I really literally had to buy [ __ ] ton of users for this type of like CPI which then eventually like made sense but now it's just like going away

or you know uh we need to we need to have a higher LTV so ball is is on your cour hbd Cas yeah so so you think basically retargeting or moving away from honestly smaller developers They Don't Really uh do retargeting doesn't make any sense uh yeah yeah I guess this level Play credits is the the main uh main point of all of these I guess but again which takes really nice segue into the impacts on ad monetization right because I think that honestly what this is this is completely about the level play mediation so essentially this whole this is your [ __ ] man destroy my sh yeah exactly might be suffering because of Felix people exactly so ad monetization like from that perspective like there is an out so in the FAQ it says that qualifying customers may be eligible for credits on the unity runtime fee BAS based on the adoption of unity Services

beyond the editor such as Unity gaming services or Unity level playay mediation for mobile ad supported games uh the program enables deeper partnership with unity to succeed across the entire game life cycle PR please reach out to your account manager for more details and those emails Bean boxes are on fire since the 4M so from my understanding this essentially means that developers on level play will be exempt or partially or completely from this new pricing structure which massively changes the landscape for mediation selection so let's say what if I don't have ads man like what if I you know I'm on Unity I want to have whatever you just said but I just don't have ad Revenue in my game can you put one placement there and then just have the level Play No but like no no they're smart so the way they do this is like the bigger like the bigger ones that they want like the bigger developers they'll be like oh yeah you have enough you can L play yeah

and be exempt but let's say you're like an ad monetized game developer and your game has like an Adar out of seven cents per user which is really good for some studios and the game is built in unity like the unit economics to remain on Max like no longer makes sense and developers will look to move to level play to be exempt is it like the your is your new punch line now like not ads are beautiful but ads are mandatory you know what I'm saying that you need to have the ads in the game in order to get these credits or whatever talking this the crazy thing because like so many games are built with unity so like them changing just can create all really weird incentives that's that's the thing this is only an advantage on uh ad Revenue not on UA that's the main thing that's Max is just [ __ ] killing everybody else so Unity don't you think level play will get that good if they get enough maybe yes but it's like what like few years away you app it took up I mean what like how many years until they

well they bought mop up and then they shifted almost everybody to Max it took them quite a lot of money to in you know in the persuation persuation of the all of everybody basically it's like like 160k uh developers already on Max so this is not going to be just quick so it's um not no I I don't I don't see that honestly yet this is about the mediation this is about getting more people on their mediation like this is like because that basically fuels their UA algorithms that get some top get by the UA this is a move like in the mediation Wars like nothing else yeah but that's the thing like they did it really not right how um let's talk a little bit numbers here how big is of a change if like whatever I'm the target of this war and I want to switch so I can completely you know get of this time fee cost no no one knows yeah it's still early days it

came out today right but I'm assuming that this will come out in the next following weeks depends on the depend on the push back if the push back is really big then yeah push now push to push back okay this is about mediation Wars they're they're trying to get more people on their mediation but what do you think like from a game developer perspective Remo about this yeah so so by my 30 minute research before the PO uh honestly uh I was already know the usual thing I'm even wearing the T-shirt yeah so there's Unreal Engine of course that's the other alternative that people are talking about but unre engine isn't really suited for mobile development that much in way that it's just gets too big like I remember last time when I was working in it uh like Unity just you know compiled scene nothing in it was like 50 Max and then under was like 250 just just the difference like the size of the engine because unre just can you know they Star Wars movies done in Unreal Engine like sorry like they just have like so much more stuff that's you know

working there in way like it's just more deep so it's not really like of course you have games in engine like lineage all these big RPGs like all these other games of course they they're just going to be better off now but regarding the small games Hello hyper casual hybrid casual friends I don't think so you're going to start using Unreal for you know the so that's this is not the viable alternative for these people so looking more into the let's say Alternatives the most two two names that keep popping up currently after like all the memes and people raging on the Internet is of course Godot engine and the Cocos to the engine which are if I understood completely open source I'm not really sure about the Cocos but about Godot I'm pretty sure it's open sourced and hold on my closer yeah so the main problem that people are complaining that it's of course not that robust as Unity because it's one of the things why Unity is so good because it's a very robust asset store and you can immediately get assets out of this like Giant Store where

developers you know sell their assets to you know get them monetized and then immediately you can get the game running very fast because you know you need this whatever Bam Bam Bam Bam Bam even free stuff it's there so it's very robust ecosystem I think go suffers here heavily and of course it don't have as much kind of fleshed out functions as Unity regarding like some of the I'm not the programmer so you know you know what what I'm talking about but and there's this very big butt but if we now run the unit mathematics of installations of these high volume games I don't think so this becomes a problem now this becomes like a you know very very viable solution currently like of course that you don't have the comfort of like Unity assist all these other things cares if just enough people switch exactly so why it's free it's the same thing as as with tenine as an as an attribution provider like a lot of hyper casual developers used it because it was free or it was the solution and the hyper casual companies

and small developers are trying to find these loopholes so I mean yeah and they honest they don't really need like anal engine is kind of Overkill to for them to begin with or you know they won't use all of functionality or or even Unity engine in in in like in its base case so my guess is that these things can shift and will probably who do you think is going to be the big winner what what what's the dev saying on the Reddit threads the gold seems like the the pick everyone is currently choosing like I I know about Cocos that like it's like the thing last thing I heard is like it's very good with browser in a way that is very very lean and very very fast there but it seems Godot is the one that of course people are currently kind of I've seen some games in it and it looks completely okay like for hyper casual needs and like the production value that these games are running through this seems like the way to go and it's completely open source so you know nothing you are paying currently even if you try you know it's free and if

there's in attraction which I think there will be in attraction after today after today there will be a lot of people are going to notice and yeah of course there's going people and the community will probably band together and like do something with the functionality there and make it better why not so my guess is that the asset store problem that they have probably if some if there's demand asset store will happen if there's like you know a lot of people demanding assets on G engine you're going to go and sell them there why not so I think there will yeah Unity will probably solidify you know their big guys that they want to move and or like the switch cost could be too big or you know to or they still want to Unity to the fullest potential like they still can compete together like go and unity but all the small guys and all the you know the grinder guys as I used to you know say like all the hyper casual Grinders where you like just throwing prototypes into a grind and seeing which one has the best CPI best retention I guess they will also switch there

because what like going from one engine to the other if you know how to work in one to the other isn't that bad to isn't that hard to be honest if you're like a good programmer or you know good whatever you're currently doing what yeah so what do you think is going to happen well they move I mean like what else they can do small developers they just will find just like some no I me more macro like yeah not about developers but like what we yeah so there's few things that I've seen also also into our like Collective how mind in our slack feel free to join the discussion there very small one of the interesting takes I seen on this was that there could be regulation going because Unity is now you know having all of these parts sounds like a monopoly a little bit to me 70% of apps yeah so so you know don't quote me on this I'm not the lawyer but yeah this is what just I seen today like could be one of the things that there could be regulation push back and unity has to roll back the other thing is of course

that people will you know push back as we talked before and the other thing I saw also was that oh this is just High overreach so they can play the heroes later down the line and say oh we're going to remove the subscription fee we're going to remove this and make it you know better like always you know I don't think so I don't I spoke to they they were pretty pissed off and I think even if they rolled back on this they'd still be yeah they still yeah like you already took the carpet out of their like feet already so it's too late I know but just like could be and then the yeah the last thing was that yeah big guys win more and small guys get crushed pretty much that big guys can negotiate better deals and like all these credits whatever make you know make their way and join the unity side in the ad mediation war and then they're off out of it it's already of the are happening as we speak yeah right now like the the unity has

planned this for months like 100% yeah for sure this is this is not like it's just out of no well there big companies so of course they're planning this yeah so that could be the other way you're working at unity and listening to this from the PR department hello hello hello hello hope you have a nice day tomorrow definitely bring coffee to it yeah the other interesting thing I I read about this is that people are kind kind of guess or not like just questioning like how can they even collect all of these things especially let's say in EU regarding the gdpr stuff like the tracking and everything because they you know collect this collect that this whole kind of install dilemma that people are pretty much now questioning like how can you track all they install yeah they do they do it anyway so you have done you have the unity analytics what are you talking about you have that as a as a plugin in the in the unity as G it's just like and

you need to have it at all times well like majority of the devs have it because it's but is it mandatory question honestly because for these things but as as you mentioned regarding the offline mode or whatever it's yeah there by the way other news that I I read about and this is Unity not like random [ __ ] talk is that Unity now can be used online only or offline up to three days from your last line up and that's it say goodbye to your offline Unity work so there you go so a lot of Dev is going to be happy uh yeah and then what was it one last thing I wanted to say yeah people are pretty much very pissed like on the forums and like yeah yeah they're they're very pissed especially those ones that are not participating in this like Ed War undertaking that I guess this is kind of reaching to and they as I said like there's from those games like what was the number

7,30 or what was there yes yes I'm like whatever giant number like just guess Felix like how many of those actually have ads or like meaningful ad Revenue guess meaningful or like ad Revenue two two3 of at least 100% really yeah yeah yeah I think cuz if you built your game in unity remember you can just click a button and then you can start monetizing with unity ads you don't even need level play so wait stop that's Felix speaking not random Dev guy that's random Dev guy Unity speaking honestly it's not it's not feel yeah exactly you have everything you have everything in in that dashboard you want to make money you want to make money and you don't know anything about ads and there's this dog like hey make money with unity ads that's it yeah isn't the usual way to go like make make money with IBS or premium or both to begin with OR yeah it's that

easy I don't know but but again what if I have a game that makes a lot of money through I congratulations you should buy us should buy us a dinner and then I I want to have this level credit play but I just don't have any AD Revenue so what do I do now I'm sure these credits are going to be based on like I'm sure if you're earning more than 40 or 30k a day and add Revenue you can be completely exempt from this but anything below that you get probably partial credit Revenue I'm just speculating here I have no idea yeah they they didn't say like how they're going there's still lot of things are not really clear here of course because it's live for five hours yeah we know we know and you will see all of these smaller devs and Hyper casual and all of everybody else they will find these Loop holes they will find it they will find of course so uh do you guys think there's going to be any Clash acts and like lawsuits on the back of this but that's the regulatory angle I still

yeah I still can't believe like how they can do it since uh when Apple did this was I mean they didn't do the same thing okay never mind never mind what do you mean when started yeah needs to be some other I guess I mean there's some pretty crazy memes circulating I encourage people to have a look the memes are super crazy the best part okay okay so what are the recommendations from each of us each expertise field R the goond blond yeah blond yeah blond being like hey hey looking pretty pale today man must be blonded today guess not tell me was on the okay so from ad monetization perspective like 100% if you're on Max mediation you need to consider even having a discussion with LEL play see what's on the table uh this is such big news that this can definitely sync your uh studio so essentially what you need to do you need to have a conversation see what kind of offers on the table and then take a long

hard like think if you have time to shift your games and if you don't you need to consider adding level play oh no no no no no you need to consider it like you need to find out all your options right Jesus [ __ ] Christ this was a recommendation par Excellence he's working for you m they pay well I mean okay never mind uh it's fine yeah you just need to find your options of course as usual uh well honestly now um since there's an the CPI will increase by sometimes well depends on the the actual C sometimes 100% yeah if you're Hy 100% sometimes 50 sometimes 20% anyway hyper casual can't catch a break huh it's going to be more than it's hybrid casual anyway though we already know so in that case so I mean

consider finding a new new New Vertical so what they're saying the new job build the mediation then fight the level play uh no anyway so I guess uh also prediction models needs to be recalibrated as well uh so pic periods I need to change that quite quickly I guess it's going to influence your budgets and you will need to spend less until you will work very closely with your game team to increase the LTV which is going to be very long time and then until that happens you will you will suddenly be in the hybrid casual space until you suddenly increase your LTV because what the [ __ ] were you doing last year if you didn't suddenly increase your L didn't increase until until this point oh yeah it's may just be uh very wise to after

January change the budgets and uh the payb period will shorten for sure 100% unfortunately and then what else uh is left for you the fake ads that are everywhere just decrease the CPS no just joking I'm just joking I'm done okay uh my take um yeah so if you are you know big guy big player and you're you know normal combatant in this Ed War yeah just do what Felix said I don't think so there's like much there to it consider the cost of switching to like big engine or like big engine is unreal I don't think big engine depends depends on the genre man like it's it's like if you're if you're midcore RPG or like ra Shadow Legends or something this a building un but child of Legends you care let's not let's not talk about the big guys they know how to take care themselves so if you're a small guy or

hyper casual Studio like if you been listening to us you know we be talking about this long time coming that hyper casual is having roughway and it means it's just like speeding up the roughway currently so I definitely yeah I would definitely try looking into that go do engine that I read about or like add other alternatives to pretty much make your margins more viable in a way um the other thing that I would look into is that how big of a switch it would take you in pretty much like going there or like if you're already big on that front like yeah we don't need to talk about this but yeah just go again level play whatever that credit thing that that's there but yeah honestly I would like we just have three months until like this whole thing kind of you know push back in community and whatever starts happening now so let's say by end of November we should see if let's say this hle can of switch into that other like Cocos 2D or God do engine is actually

working and we're seeing like hyper casual hits there already because my guess is that people start building anyway like this day because if if you want to switch in January you need to just start preparing take us home guys I will be I will be back you can you can finish without me yeah yeah and on that not I think it's time to end yeah yeah it's time to end this was your emergency podcast see you around and join the selectional discussion on this see you around bye [Music] [Music] [Applause] [Music] bye-bye welcome [Music]

chicken dipper welcome everybody yeah if you're listening to this you the fan of the podcast chicken download me as a ringtone eat it need the [ __ ] thing I wanted to go for a chicken chicken tortilla what are you eating chicken tortilla tortilla I've always wanted to have a chicken tortilla in the chicken tortilla capital of Europe [Music]