Unity Licenses: What's Changed and What is the Unity Runtime Fee

Contents:

• How the Unity engine licensing rules will change
• The main provisions of the Unity Runtime Fee
• Why indie developers were unhappy with the changes
• Frequently asked questions
• What consequences might these changes have?
• Developer reaction
• Results

On September 12, 2023, Unity announced new licensing terms for its game engine. Effective January 1, 2024, developers will be charged a monthly fee, known as the Unity Runtime Fee. The fee will depend on the selected subscription and revenue from sales of games built on the Unity platform, and will range from 0.5 to 20 cents per game install. These changes could significantly impact developers' budgets and monetization strategies for their projects.

Clarifications regarding the new business model were soon published on the company's website. However, many aspects and some wording still raise questions. In particular, it is unclear how Unity plans to track game installations and what exactly is meant by the term "installation."

The innovations, despite the lack of clear explanations, have drawn criticism from developers. In this article, the editorial team of "Gamedev" Skillbox Media analyzes the reasons for the conflict and answers the most frequently asked questions from developers, providing comments from official company representatives.

How the licensing rules for the Unity engine will change

• Unity Personal. Remains free, the revenue threshold for game sales increases from $100,000 to $200,000, as with the more advanced Unity Plus license. Also, starting in November 2023, users will need to periodically log in via Unity ID to access the engine. Without an internet connection, the user can continue working for three days.
• Unity Plus. Will become unavailable to new users from September 12. Those who have been working with this license can either renew their subscription for another year or purchase a Pro license. For both Unity Personal and Unity Plus, the revenue threshold from game sales, after which the developer is required to pay for using the engine, has been increased to $200,000.
• Pro. The price of this plan has increased and is now $1,877 per year. The plan also offers discounts on the Unity Runtime Fee, which will be discussed below. And now this is the only option for developers who do not want to see the Unity loading screen in their project. Previously, they could buy the Plus version and pay $399 for the absence of the technology logo (this option will now remain only for existing users, but only for one year, since this version of the subscription cannot be renewed in the future).
• Enterprise. The license price remains the same, but the Unity Runtime Fee is lower than in other business models.

As it has become known, a new important rule applies to all licenses - the Unity Runtime Fee. This fee is charged to developers for each install of their game on any platform supported by the Unity engine. Key to this is that the Unity Runtime Fee is only activated once the game's revenue from sales over the past 12 months exceeds a set threshold, which depends on the selected license. Unity representatives emphasize that this fee is charged for each new install and is not a permanent deduction from the developer's revenue. This innovation will significantly change the financial model for many developers working with Unity and requires careful consideration before choosing a license.

The Unity Runtime Fee will be applied to developers when certain conditions are met. These conditions include the amount of revenue from games using the Unity engine, as well as the number of app installs. It is important to note that the fee amount may vary depending on the success of the project. Developers should consider these factors when planning their budget and developing their games on the Unity platform. Understanding the Unity Runtime Fee properly will help you avoid unexpected expenses and ensure the successful implementation of your projects.

Unity Runtime Fee Key Points

• The Unity Runtime Fee goes into effect on January 1, 2024. You will still be charged a fee even if your game has reached the sales and revenue thresholds before January 1, 2024.
• The Unity Runtime Fee is calculated by multiplying the fee by the number of installs after your game reaches the thresholds. If you have a lot of installs, it may be more beneficial for you to upgrade to a Pro or Enterprise license, which offer a tiered pricing system, as noted below.
• The Unity Runtime Fee will be charged at one of two rates: the Standard monthly rate or the Emerging market monthly rate. The tariff applied depends on the country in which the game was installed. The standard tariff applies to the United States, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, South Korea, and the United Kingdom. And all other countries are subject to the emerging market tariff.

Let's assume that a hypothetical game has generated $12 million in revenue over the past 12 months, and has had 5 million total installs since its release. This means that the game has successfully crossed key thresholds for both important metrics.

Over the past month, the game has accumulated 300,000 installs. Of these, 200,000 were from users in countries eligible for the standard rate, and the remaining 100,000 were from users in emerging markets. The studio that developed this hypothetical game uses a Unity Pro license, which affects the calculation of revenue and royalties.

The service cost calculation consists of three components: the first part is 100,000 multiplied by 0.15, the second part is 100,000 multiplied by 0.75 at the standard rate, and the third part is 100,000 multiplied by 0.01 at the emerging market rate. This brings the total cost to $23,500. This approach to calculation allows us to more accurately estimate the cost of services depending on the selected plan.

• A subscription to a particular license is paid separately.
• The invoice for the Unity Runtime Fee comes once a month.
• Unity Runtime Fee does not apply to films, gambling, and educational projects.

You can find out more about the conditions on the official website of the engine in the section dedicated to Unity Runtime Fee.

Why indie developers were unhappy with the changes

• Imagine a developer using Unity Personal or staying on Unity Plus. His game suddenly becomes popular, crosses the threshold of $200,000 in sales revenue, and hundreds of thousands of people install it on their devices. Considering the costs of production, platform commissions, marketing, and other expenses, he risks incurring serious losses. For example, 500,000 installs at 20 cents each will cost the developer $100,000.
• Mobile app developers with a free-to-play distribution model risk going into the red. Game marketing consumes a large portion of the budget, and revenue from in-game item sales can be minimal in some cases. And if revenue does reach the required threshold, the number of installs could reach a million by then, entailing colossal expenses.
• Developers of long-running games, whose budgets may depend on crowdfunding and other investments, also risk finding themselves in a difficult situation. Even if their game crosses the threshold, the initial revenue goes toward covering development costs, and install fees in this case can have a negative impact. This means that developers who spent five years developing a game could be working at a loss for the same $200,000—and still owe Unity money if their game ever reaches 200,000 installs.
• Furthermore, there's a risk of intentional install bombing by ill-intentioned actors, with the goal of ruining a particular company. Unity representatives, however, deny this possibility, but refuse to specify the specific tools they will use to track installs, limiting themselves to abstract terms. It's also unclear how pirated copies will be tracked: for now, the company suggests that developers simply file complaints about pirated resources. Taken together, this raises even more suspicions among the developer community.
• Users also speculate that Unity may not stop with the current changes and may raise prices in a few years, jeopardizing the development of future games using this technology.

Frequently Asked Questions

Developers expressed dissatisfaction with the wording of the answers to frequently asked questions about the Unity Runtime Fee. In the first 24 hours after the announcement of the changes, engine users actively sought more detailed explanations from the company. In this text, we have collected user questions from the forum and provided answers based on statements from Unity representatives and comments from the developers.

Reinstalling applications on devices is an important aspect to consider. Reinstalling an application may change its data and settings, which may affect functionality and user experience. In addition, reinstallation may require reactivation or re-entering credentials, which is also worth considering. Therefore, it is important to remember that when working with apps on devices, you should carefully reinstall them to avoid data loss and maintain a comfortable experience.

When reinstalling mobile apps for Android or iOS, they are not considered separate installations, since the app is already associated with your account. This means that all saved data and settings will be restored automatically, which simplifies the process of using the application.

The situation with others The details of the Unity Runtime Fee across platforms remain unclear, as information from various sources continues to conflict. Antonia Forster, XR's chief technical officer, claims there is no fee for reinstalls, but she has no information about multi-platform devices. Stephen Totilo, a journalist for the Axios Gaming portal, contacted Unity representatives and received a comment stating that the fee is only charged for the first install. It is important to monitor updates in this area, as rules and regulations are subject to change.

The Unity Runtime Fee does not apply to demos and games available through subscription services such as Game Pass. In the case of subscription games, responsibility for paying the Unity Runtime Fee falls on the distributor, which in this case is Microsoft. This means that developers can focus on creating high-quality content without worrying about the additional costs associated with subscription platforms.

However, the first post on the official Unity forums refutes everything mentioned above.

Update as of September 18, 2023: A few days after the initial post, moderators made important clarifications. Currently, the reps' comments are consistent, allowing for a better understanding of the situation.

The Unity Runtime Fee is calculated on a per-game basis, not for a studio's entire library. This means that a studio will pay a fee for each game that uses Unity, based on its revenue and other factors. Therefore, it is important to consider the financial performance of each game individually when planning your Unity engine budget.

The Unity Runtime Fee is calculated on a per-project or per-game basis. This means that each game you develop will have its own Unity engine fee calculation.

The Unity Runtime Fee applies to both existing games and projects developed in future versions of Unity. This means that developers should take this fee into account when planning their games, regardless of their stage of development. It is important to closely monitor Unity's policy updates to avoid unexpected charges in the future.

The fee will apply to projects that have been created and released. The Unity Runtime Fee will begin to be charged on games released before January 2024 if they reach the established revenue and unit sales thresholds by then.

Updating the game client is not considered a new install. An update modifies existing files and data, which allows the player's progress and settings to be preserved. A new install, on the other hand, involves completely deleting the old version and reinstalling the game from scratch, which may result in data loss. Therefore, updating the client is the preferred option for keeping the game up-to-date without the risk of losing personal data and progress.

Updating the game client is not considered a new install. However, this does not mean that you can avoid paying the Unity Runtime Fee by passing off the full version of the game as a demo that contains the ability to unlock the full version. It is important to adhere to the platform's terms and conditions to avoid violations and potential penalties.

Unity will distinguish between reinstalls and new installs by using unique identifiers and data stored on the device. The first time an app is installed, a unique identifier is created and stored in the system. If the user chooses to reinstall the app, Unity checks for the presence of this identifier. If it already exists, the system determines it is a reinstall. Additionally, Unity may analyze additional data, such as user preferences and cache storage, which also helps in determining the installation status. This distinction is important for managing the user experience and preserving data between installs.

The company uses a unique, proprietary data model that allows it to effectively leverage both first-party and third-party data when possible and appropriate. In cases where company data does not match user data, the sales and finance departments are involved in the process for further work. This ensures the accuracy and reliability of decision-making, as well as the optimization of business processes.

The method for counting installs will likely change in the coming months or years. This is due to the need to adapt to new market demands and improved analytical tools. Changes may affect both tracking algorithms and data processing methods, allowing for a more accurate assessment of advertising campaign effectiveness and user interest. Therefore, it is important to monitor updates and adapt your strategies to new methods of counting installs. The accuracy of the developer's calculations, as shown in the image below, raises questions. It is necessary to carefully analyze the methodology used to perform the calculations, taking into account possible assumptions and source data. Accurate calculations must be based on verified data and take into account all variables. To confirm the accuracy of the information, it is recommended to consult independent sources or experts in the field. This will help to form a more complete understanding of the presented material.

The number of installations for the fee will be counted from January 1 2024. Installs completed before this date are not billable. However, it should be noted that game installs completed before January 2024 will be counted towards the thresholds.

If a game has generated over $200,000 in revenue over the past year, it becomes more profitable for the developer to upgrade to Unity Pro, as the 0.20 fee then becomes irrelevant. Unity Pro provides access to advanced features and tools that can significantly improve development quality and increase work efficiency. Therefore, for successful developers, upgrading to Unity Pro is a logical step to optimize their projects and increase revenue.

Let's imagine a situation in which a developer achieves 28 million installs in a month across two games. In this case, the calculations might look like this:

The cost per install calculation is $640,000, which is equivalent to approximately 0.286 cents per install. This figure is significantly lower than the amount shown in the previous image. Such analysis can be useful for assessing the effectiveness of advertising costs and optimizing the budget.

Additionally, we will provide some clarifications from Antonia Forster, which were not voiced previously.

• Unity Runtime Fee applies only to developers whose game brings in more than $200,000 per year AND (not or!) more than 200,000 installs for the entire period.
• The fee is charged only after reaching the thresholds ($200,000 per year and 200,000 total installs) for each subsequent install - that is, starting from the 200,001st, and not for all the previous 200,000.
• If a player downloads your game just once and plays it for 10 years, the Unity Runtime Fee payment for the install is counted only once.
• The fee is also not charged for test installs, fake installs organized for the purpose of "bombing", and installs after purchasing charity packs like Humble Bundle.

Some statements are controversial and require further explanation.

What consequences might these changes have?

Given that Unity Plus is no longer available to new users, the company is seeking to motivate indie developers to purchase the Pro version, the price of which has increased significantly. This change highlights Unity's new approach to monetizing its product and may influence developers' choices when using the engine.

Unity supporters are confident that the changes will not have a significant impact on small indie teams with low incomes. The company emphasizes that most Unity Editor users will still not face the need to pay for services, as was the case before the introduction of innovations. The fee will only affect successful projects, the revenue of which allows them to cover the Unity Runtime Fee, which will be calculated based on new installations.

Currently, the indie developer community does not feel any relief. On the contrary, while developers previously strove to have thousands of users download their games, the current situation forces them to perceive numbers as a burden. Today, any project has the potential to go viral, but creators may not be prepared for the financial consequences, which can reach tens of thousands of dollars. This creates serious difficulties in planning project payback and developing an effective business plan. Indie developers face challenges that complicate their path to success and sustainability in the market.

Developer Reaction

Due to the analysis of the current responses of company representatives and the consequences of recent changes, a number of developers have begun to consider the possibility of ceasing game development on the Unity platform. This situation is causing serious concerns in the industry, as Unity is one of the leading game engines. Developers are concerned about the future of their projects and the stability of the platform, which may affect the choice of tools for game creation.

The forum is actively discussing the dissatisfaction of users who have long supported the company. One participant points to a hidden update to Unity's terms of service, which removed a clause allowing users to adhere to the terms of previous LTS (long-term stable) releases. Furthermore, to prevent the changes from being tracked, Unity representatives removed the old terms and conditions from GitHub. This raises serious concerns about the company's transparency and its interactions with users. Users are increasingly turning to alternative technologies and are seriously considering migrating their projects to other engines. In response to these changes, prominent studios have begun to express their opinions. A statement from the creators of Cult of the Lamb appeared on social media, announcing their intention to remove the game from all platforms on January 1, 2024. SideQuest's CEO expressed strong dissatisfaction with Unity's plans to collect user data from his platform and threatened legal action. Aggro Crab also stated that if Unity does not restore the previous terms, the developers will be forced to start working on Another Crab's Treasure from scratch using a different engine. In the current situation, it is important to consider how changes in the policies of large companies can affect developers and their projects.

The Bottom Line

The wait for official clarification from the company regarding the new business model is causing growing discontent among users and experts. The situation will likely become clearer in the coming days, which will allow us to assess the impact of this innovation on the industry as a whole. Transparency in communication with customers will be key to understanding the consequences of the changes and their impact on the market.

Update as of September 18, 2023. In this statement, the company apologized for the situation and announced its intention to review its policies based on feedback from the developer and partner community. Unity Technologies also noted that new information on licensing will be presented soon.

Update as of September 22, 2023. Unity Create CEO Mark Whitten published an official statement on the website, in which he apologized to developers for the company's rash decisions and presented new licensing terms. In this open letter, he emphasizes the importance of community input and accepts responsibility for past mistakes. He clarifies changes to the licensing policy aimed at more transparent and fair conditions for developers. These steps are designed to restore trust and support the professional community, which makes a significant contribution to the development of the gaming industry.