- Unity reported a 69 percent improvement in revenue for the third quarter amounting to R544 million.
- These figures were in-line with Unity’s estimates, but the firm is still eyeing a reduction of its workforce, products, and properties.
- The firm introduced a poorly received Runtime Fee earlier this year which was eventually changed following criticism from users.
Yes, you’ve read the headline correctly, Unity announced that it had improved its revenue for the third quarter and in the same breath announced a potential reduction in its workforce.
In a letter to shareholders [PDF], Unity announced that revenue for Q3 2023 came in at $544 million, a 69 percent improvement compared to the same quarter in 2022.
But this improvement seemingly wasn’t enough for Unity’s executive team as it reported that revenue from its Create Solutions was flat at $189 million despite revenue from Grow Solutions improving 166 percent to $355 million.
Despite the company raking in millions, the firm told shareholders it assessing its product portfolio.
“Several weeks ago, we started a comprehensive assessment of our product portfolio to focus
on those products that are most valuable to our customers. We are also evaluating the right cost structure that aligns with the more focused portfolio. We are acting quickly and expect to make final decisions over the next few weeks. We expect to start implementing the plan within this quarter and expect to complete all interventions before the end of the first quarter of 2024. This will likely include discontinuing certain product offerings, reducing our workforce, and reducing our office footprint,” Unity wrote.
The reduction in workforce is a strategy that many other tech firms have implemented, but this announcement coming alongside the firm reporting improved revenue feels like a slap in the face of that workforce.
This announcement stings even more when one notes that Unity introduced a Runtime Fee recently which pushed many developers to reconsider using the platform to create their games. Despite the pushback the firm saw, it doesn’t seem to believe that it negatively affects its business all that much.
“At the end of September, we introduced runtime fees on the Editor to complement our seat-based subscriptions, a critical step to make Create a sustainable business. While we did not expect the introduction of the fees to be easy, the execution created friction with our customers and near-term headwinds. We expect the impact of this business model change to have minimal benefit in 2024 and ramp from there as customers adopt our new releases,” Unity said.
We have to wonder what sort of figures would have kept jobs at Unity secure because clearly, a 69 percent improvement in revenue wasn’t enough.