gaming
EGDF: UNITY’S INSTALL FEES ARE A SIGN OF LOOMING GAME ENGINE MARKET FAILURE
Step by step, video game engines are becoming key gatekeepers of European cultural and creative sectors. Currently, Unity dominates game engine markets, Unreal being its primary challenger. These two engines are not just clear market leaders in the game industry but increasingly vital market actors in film, architecture, and industrial design and simulations. In 2022, Unity reported that globally, 230,000 game developers made and operated over 750,000 games using the Unity Engine and the Unity Gaming Services portfolio of products.
Unity’s new fee structure is going to have a drastic impact on the game industry.
Over the years, the Unity game engine has reached close to unofficial industry-standard status in some game markets. Its well-designed tools and services have lowered the market access barriers in the game industry. Furthermore, it has played a crucial role in removing technological barriers to cross-platform game development. Now, Unity has informed the game dev community that it will move from subscription-based fees to subscription and install-based fees, which will significantly increase the game development costs for most game developers relying on their services. EGDF finds it unfortunate that Unity has significantly damaged its reputation as a reliable and predictable business partner with these sudden and drastic changes in its pricing principles.
Bigger game developer studios have the luxury of being able to develop their own game engines. Consequently, market uncertainty and significantly increased service provider risks caused by Unity’s new fee structure will hit, in particular, SME game developers. It will be much harder for them to build reliable business plans, make informed decisions on game engines, and run a profitable business. Many of these studios struggled to access risk funding before Unity’s announcement, and it has only worsened their situation.
Unity’s decision will have a broader impact on the whole game industry ecosystem. Many professional game education institutions have built their curriculum on the Unity game engine. If Unity’s new pricing model starts a mass exodus from Unity’s engine, it will lead to rapid changes in professional game education itself and place many young industry professionals who have built their career plans on mastering Unity’s tools in a very difficult position.
Although Unity’s decision will cause significant challenges for the industry, EGDF kindly reminds that instead of focusing on blaming individual Unity employees for the changes, it is far more productive to focus on taking measures that increase competition in game engine markets.
Unity’s anti-competitive market behaviour must be carefully monitored, and, if required, the European competition authorities must step in.
Unity is an increasingly dominant market player in the game markets. According to Unity’s own estimate, in general, 63% of all game developers use its game engine. The share can be even higher in some submarkets. Unity estimates that 70% of top mobile games are powered by its engine. Unsurprisingly, Unity’s game engine is now a de facto standard in mobile game markets to the extent that whole formal professional game education degree programmes have been built on training its use. However, Unity’s market dominance is not just based on the quality of its game engine. It is also an outcome of aggressive competition practices and systematic and methodological work of making game developers dependent on Unity services.
How Unity bundes different services together potentially distorts competition in game middleware markets. Over the years, Unity has, step by step, bundled its game engine more and more together with other game development tools under the Unity Gaming Services portfolio. Unity is not just a game engine; it is also a player sign-in and authentication service, a game version control tool, a player engagement service, a game analytics service, a game chat service, a crash reporting tool, a game ad network, game ad mediation tool, an user acquisition service and in-game store building tool. This creates a significant vendor lock risk for game developers using Unity services. It also makes it difficult for many game middleware developers to compete against Unity and, all in all, significantly strengthened Unity’s game engine’s market position compared to its rivals.
Now, Unity is strategically using install fees to deepen the lock-in effect by creating a solid financial incentive to bundle other Unity services even closer to its game engine: “ Qualifying customers may be eligible for credits toward the Unity Runtime Fee based on the adoption of Unity services beyond the Editor, such as Unity Gaming Services or Unity LevelPlay mediation for mobile ad-supported games. This program enables deeper partnership with Unity to succeed across the entire game lifecycle.” This will, of course, drastically impact Unity’s direct competitors.
Unity’s install fees are an excellent example of Unity’s potentially anti-competitive market behaviour. It is clear that if Unity’s pricing model had, in the past, been similar to the now-introduced model, it would likely never have achieved the level of dominance it enjoys today, as more developers would have chosen another alternative in the beginning.
The fact that Unity’s new install fees are only targeted at video games and do not apply to other industries logically leads to a question: Is Unity setting prices below cost level at different market segments, or is Unity charging excessive prices in game markets? Furthermore, does the fact that Unity is now introducing an install fee on top of the licensing fee mean that licensing fees have before been below cost level? Or does the introduction of install fees on top of the licensing fees of their game engine allow them to provide other, lock-in generating, services below cost level?
In the end, Unity has built its dominant position in game markets for years and systematically made game developers more dependent on it. It is a good question if Unity has now crossed the line of abusing its market dominance on weaker trading parties that deeply depend on its services. Game productions can take years, and game developers cannot change their game engine at the last minute, so they are forced to accept all changes in contract terms, no matter how exploitative they are. Unity must know that if they had given more notice, many more developers might have had a realistic chance of abandoning Unity altogether by the time the new pricing came into play.
The new install fees will limit game developers’ freedom to conduct business as it pushes them to implement Unity ad-based business models even in games that otherwise would not have ad-based monetisation. Furthermore, this will create a competitive disadvantage for those game distribution platforms that do not use ad-based monetisation at all (e.g. subscription services and pay-per-download games), as Unity is de facto forcing them to increase their consumer fees compared to channels that allow the use of Unity’s ad-based monetisation tools.
The new install fees will likely lead to less choice for consumers. Install fees will allow Unity to extract value from games that generate a lot of installs through, e.g. virality, but do not necessarily generate money. Install fees will lead to markets where game developers want to limit the downloads and try to avoid installs from the wrong players. This can potentially kill part of the game market. For example, indie developers that have an unfortunate mix of being a success on the number of installs but that are struggling to generate revenue, or hyper-casual game studios based on combining a huge install base with minuscule revenue generated per game.
In the long run, the EU needs to update its regulatory framework to answer the challenges caused by dominant game engines.
Unity’s install fees demonstrate why the EU needs a new regulatory framework for unfair, non-negotiable B2B contract terms. Contract terms Unity has with game developers are non-negotiable. With the new non-negotiable install fee, European game developers have to either withdraw their games from markets, increase consumer prices or renegotiate their contracts with third parties. For example, if a game memory institution makes games available for download on their website, a game developer studio must now ask for a fee for it or ban making European digital cultural heritage available to European citizens. The three-month time frame Unity is providing for all this is not enough.
The Commissions should introduce a specific regulation for non-negotiable B2B contract terms. The regulation should provide sufficient time (e.g. in a minimum, six months) for markets to react to significant changes in non-negotiable terms and conditions that a service provider has communicated to their business users in a plain, clear and understandable manner (e.g. now it is unclear how Unity counts the installs). Furthermore, the Commission should bring much-needed market certainty by banning retroactive pricing and contract changes.
The Commission should include game engines in DMA. While reviewing the recently adopted Digital Markets Act (DMA), the Commission should consider lowering the B2B user thresholds and adding gatekeeper game engines under its scope. This would, for example, ensure that Unity cannot use data it collects through its game engine to gain an unfair competitive advantage for its other services like advertisement services.
The Commission should increase its R&D support for the European game industry. The fact that there is no major competitor for Unity Engine that does not require constant back-end server connection is a market failure in itself. The Unity Game engine is not fully scalable because Unity has built its engine in a way that it calls home every time it is installed to report instals for Unity. Consequently, the Commission should strengthen its efforts to support the emergence of new European game technology and business service providers. In particular, the Commission should increase its support for privacy-friendly open-source alternatives for game engines, like for example Godot or Defold or similar, that do not require constant back-end server connection and thus have no need for scalable revenue-based fees or install fees.
gaming
Getting ready for Xmas: SplitMetrics partnership with Wargaming helps World of Warships app sail to new heights with 15% uplift in organic conversions
The post Getting ready for Xmas: SplitMetrics partnership with Wargaming helps World of Warships app sail to new heights with 15% uplift in organic conversions appeared first on European Gaming Industry News.
gaming
Nolimit City revisits the brutal factory life in Outsourced: Slash Game
Nolimit City takes you back to the grind with its latest release, Outsourced: Slash Game. For those who thought their consumerist cravings were a safe indulgence, think again. Following in the footsteps of Outsourced, this new addition pulls back the curtain on the sweat and sacrifice lurking behind those everyday luxuries—this time with a dash of danger. Outsourced: Slash Game is the studio’s second venture into crash-style gameplay, the first being xCrash™ in Skate or Die – but this time it’s a standalone crash game!
In Slash Game, players have to make some cutthroat decisions as a laser traces the outline of their hand, increasing the multiplier with every pass. Players hit “stop” to cash out, locking in the multiplier when they feel the timing is right. After which, they will be shown the potential winnings if they wouldn’t have stopped. But here’s the catch: if players hesitate a second too long and the laser slips, all the winnings are lost. A live scoreboard displays the Top Win, Top Miss and Last Round, so that players can keep track of their previous rounds.
Outsourced: Slash Game is not a familiar Nolimit City slot to some players but could cause some excitement with an increasing multiplier and a maximum payout of 1,500x the base bet. Outsourced: Slash Game, unlike Nolimit City’s high-volatility slots, is rated as ‘Medium Volatility’ but don’t let that fool you as it still includes the risk of losing your hand.
Per Lindheimer, Head of Product at Nolimit City, said: “Get back to work, will you? We’re bringing players back to the unrelenting factory floor of Outsourced with an all-new twist. Slash Game is a standalone take on our crash-style games, and it’s packed with plenty of heart-stopping moments (and maybe a few hand-stopping ones, too). We’re thrilled with how it turned out and we hope that our fans will be too!“
‘Outsourced: Slash Game’ will be available to all Nolimit City partners on November 5th, 2024.
The post Nolimit City revisits the brutal factory life in Outsourced: Slash Game appeared first on European Gaming Industry News.
CS2 Intel Extreme
CS2 Intel Extreme Masters Rio 2024 SuperComputer: NaVi to bounce back after Blast Fall Final loss
Final: Natus Vincere (36.5%) to beat Team Vitality (28.1%)
Semifinal 1: Natus Vincere (52.6%) to beat MOUZ (16.3%)
Semifinal 2: Team Vitality (47.7%) to beat G2 Esports (18.7%)
Quarterfinal 1: G2 Esports (39.8%) to beat FaZe Clan (32.8%)
Quarterfinal 2: MOUZ (35.9%) to beat Eternal Fire (24.7%)
Group stage:
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Natus Vincere – 48.7% to finish 1st; 17.0% to finish 2nd; 84.1% to make playoffs
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Team Vitality – 40.8% to finish 1st; 17.4% to finish 2nd; 77.7% to make playoffs
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G2 Esports – 19.3% to finish 1st; 20.4% to finish 2nd; 56.7% to make playoffs
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MOUZ – 14.5% to finish 1st; 21.8% to finish 2nd; 53.0% to make playoffs
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FaZe Clan – 13.9% to finish 1st; 21.0% to finish 2nd; 50.2% to make playoffs
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Eternal Flame – 40.7% to finish 1st; 16.2% to finish 2nd; 40.7% to make playoffs
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Liquid – 16.3% to finish 7-8th; 35.7% to make playoffs
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Virtus.pro – 15.4% to finish 7-8th; 29.9% to make playoffs
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Astralis – 28.9% to finish 9-12th; 31.5% to make playoffs
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The MongolZ – 32.7% to finish 9-12th; 25.4% to make playoffs
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Complexity – 34.3% to finish 9-12th; 21.2% to make playoffs
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Heroic – 26.8% to finish 9-12th; 23.5% to make playoffs
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paiN – 36.5% to finish 13-16th; 21.0% to make playoffs
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FURIA – 36.4% to finish 13-16th; 20.9% to make playoffs
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9z – 44.7% to finish 13-16th; 14.6% to make playoffs
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Imperial – 49.1% to finish 13-16th; 13.9% to make playoffs
It has been quite the run for NaVi despite their loss with back to back grand finals in recent weeks but CSDB.gg’s predictive model suggests there will be no let up for the Ukrainian esports organisation.
G2 will also be looking to build more momentum in preparation for Majors season with NiKo on a quest to finally get over the line this year to win his first major title. Hopefully Rio won’t have to see a repeat of his reaction in the semifinals at BLAST Premier Fall Final 2024 where he punched a hole in a table after losing out to Team Vitality in a key moment.
However, the hosts of Intel Extreme Masters Rio 2024 may want to lockdown any nearby furniture and reinforce their desks if G2 are set for disappointment at the semifinals stage as predicted by the CSDB.gg SuperComputer.
A victory in Rio could be even more consequential for how the end of the year shapes up for the leading teams on the circuit. The Valve Global rankings have both teams close at the very top (NaVi at 1988 and G2 at 1953) meaning a win for either team could hand them a key advantage when it comes to who enters the Majors as top seed.
Back-to-back wins in T1 events for G2, should they prosper in Rio, would set the Berlin-based team on an incredible trajectory going into the winter months.
Meanwhile, Brazilian hopes for glory look slight according to the CSDB.gg SuperComputer with FURIA, the team co-owned by Neymar, having only been given a 20.9% chance of even making the playoffs.
They are the leading contenders to make an impact for the home crowd but there are other teams flying the flag for Brazil with paiN and Imperial also set to give it their best to give local fans something to cheer on.
In terms of forecasted matchups of note, G2 and FaZe Clan could offer up a fascinating encounter in the quarterfinals should both teams qualify, with each organisation rated as having a strong chance of making the semis with little to separate them should they meet.
How was the CSDB.gg CS2 Tournament SuperComputer created?
The CSDB.gg CS2 Tournament SuperComputer is a predictive model created using world ranking points, team quality ratings and performance trends. An element of randomness is also included in the model to avoid the best teams and players always winning, to reflect the fact that upsets can happen.
Every tournament is simulated 1,000 times with the results aggregated into a percentage rating of the chances teams or players have to achieve the predicted result.
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