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Unity Initiates 'Refocusing' Process, Signaling Possible Layoffs and Office Closures

Unity, the leading software platform for game development, has announced significant changes in its strategy, including the discontinuation of certain offerings, a reduction in its workforce, and a scaling down of its office space. This decision comes after the company faced backlash from customers following the announcement and partial reversal of its Runtime Fee policy.

Unity acknowledged that negative customer feedback, including a boycott and a slowdown in new contracts and renewals, resulted from the Runtime Fee policy. Despite this, Unity remains optimistic about the revised pricing model's long-term benefits.

The company is currently undergoing a comprehensive assessment of its portfolio under the interim leadership of former Red Hat CEO James Whitehurst. This evaluation aims to refocus the business on its core products, potentially leading to the discontinuation of some offerings, a workforce reduction, and downsizing of office space. Unity emphasized the uncertainty regarding the timing and full impact of these changes on future results.

Following the departure of CEO John Riccitiello, Unity reported an accumulated deficit of $2.8 billion from its inception through September 30, 2023. However, the company's Q3 2023 financial results, including revenue of $544 million and adjusted EBITDA of $131 million, were within guidance, surpassing expectations.

Unity faces legal challenges, with lawsuits alleging false statements and issues with the product platform. The company believes these claims are without merit and intends to defend vigorously. Additionally, Unity settled a class action complaint related to its merger with IronSource for $100,000.

The recent events for Unity were triggered by the unveiling of its controversial Runtime Fee policy. Developer outrage led to concessions from Unity, and CEO John Riccitiello announced his retirement in early October. The company is navigating through these challenges while striving to maintain its position in the competitive game development market.

Source: adapted from an article by Neil Long, Founder, and Editor of Mobile Gamer.

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