John Riccitiello Steps Down As CEO of Unity After Pricing Battle

Dean Takahashi reports via VentureBeat: John Riccitiello, CEO of Unity, has resigned from the company in the wake of a pricing controversy that left developers in open revolt. Unity said in a press release that James M. Whitehurst has been appointed interim CEO and president of the company. Meanwhile, hoping to avoid a stock panic, Unity said that it is reaffirming its previous guidance for its fiscal third quarter financial results, which will be reported on November 9.

Roelof Botha, lead independent director of the Unity board, has been appointed chairman. Riccitiello will continue to advise Unity to ensure a smooth transition, the company said. The news isn't a surprise as Unity angered a lot of its loyal game developers a few weeks ago after pushing through a price increase based on numbers of downloads -- and then retracted it after an uproar. Unity said the board will initiate a comprehensive search process, with the assistance of a leading executive search firm, to identify a permanent CEO. "It's been a privilege to lead Unity for nearly a decade and serve our employees, customers, developers and partners, all of whom have been instrumental to the company's growth," Riccitiello said in a statement. "I look forward to supporting Unity through this transition and following the company's future success."

Bye!

[slack_justyb]

Fuck Riccitello. Everything he has touched has turned to shit, cutting him out is the first step here. Botha is still shit as well. He's Musk's good friend at Sequoia Capital that pitched many parts of the loan to Musk for the Twitter buy. And don't get me started on Whitehurst who is our "IBM should buy RedHat" guy. That's been going great so far.

The entire group of them is still a bunch of yesteryear yuppies in Los Altos Hills that want to find out how deep they can stuff their pockets. Until there's a clear return to leadership that's not racked up a history of "after the money", fuck Unity as a company. Hope they burn.

Re:Bye!

[XaXXon]

There's a board of directors that agreed with the price change that aren't resigning.

He's just the scapegoat.

Re:

[brunes69]

The board of directors of a corporation does not get involved in the minutiae of running a company, things like how to price products. That is not their job, and no board does that.

Re:

[null etc.]

No, but the board of directors of a public corporation serves as a proxy to the interests of the public shareholders.

Re:

[Brain-Fu]

Did Unity fully roll back the per-install fees? Last I read they only partially rolled the fees back, but they are still there.

His resignation means nothing if they don't fix the problem he created.

Re: Bye!

[RegistrationIsDumb83]

Those royalty fees are going to push devs to open source engines instead. Painful now, but it's gonna be a really healthy time in the industry in a couple years.

Re:

[UnknowingFool]

The runtime fee is now optional as some developers can choose a 2.5% revenue share instead. I imagine the runtime fee still exists as an option because the person(s) who made that proposal has to "win" somehow. Also more developers were exempted from the fee.

was he at fault?

[v1]

Does anyone know if he was the one that pushed through the decision to charge per install, or was it like the board or some other person or group that pushed it through and he's just being thrown under the bus to calm down the devs?

I'd imagine if he's being thrown under the bus, he'll be floating away on a nice golden parachute to keep his mouth shut.

Re:was he at fault?

[edwdig]

He's famous for having said that game developers that don't implement microtransactions are "the biggest fucking idiots", and he once talked about charging gamers money to reload instantly in FPS games, so it sure seems like the kind of idea he would come up with.

Re:

[Osgeld]

Stepping down, then retaining an "advisory role" do you really need a detailed explanation? The stork must have dropped you with a brick parachute attached...

Re: was he at fault?

[Frobnicator]

Yes, he pushed a lot of the worst of it.

In the article, "John has led Unity through incredible growth over the last nearly 10 years, helping us transition from a perpetual license to a subscription model, enabling developers to monetize, building other game services to serve our creator community, leading us through an IPO..." while they are all great for the board and shareholders, each has harmed the product.

JR certainly gave the company profits with so far what people tolerated. People tolerated a sh

Re:

[Brain-Fu]

It's true. The profit model is not "please the customer" but "charge the customer as much as absolutely possible without driving the customer away." Same goes for games. They don't care if you like it, they only care if you will pay for it. If you hate most of it but like something about it just enough to put up with the costs of everything you hate, then they win.

I have played one game by Ubisoft and two games by EA, and have hated both of them for this. After paying the industry premium price for the

Re: was he at fault?

[sd4f]

I think the difference here is, when the customers are gamers, they'll generally take it and accept it. When the customer is a business, they look at their bottom line, and will happily switch if a cheaper alternative is available. I get the feeling that CEO's like Riccitiello tend to have the one trick up their sleeves, and that's raise prices, and increase margins. At EA he may have gotten away with it, because gamers. Good that devs have him backpedalling.

Finally

[alvinrod]

As stupid as he was for every instituting this change, at least he had the decency to fall on his sword. Too many CEOs fuck up badly and stick around to fuck up even more badly and to the detriment of the company and its shareholders. Someone new can come in, throw him under the bus, and reverse all of that policy without appearing like a complete snake.

Re:

[The Evil Atheist]

You're a bit too optimistic. He merely resigned. He will be parachuted in to another board somewhere and be paid millions of dollars regardless of his actual performance.

Re:Finally

[edwdig]

This is almost certainly a case of "You can resign or you can be fired." Most people choose to resign in that scenario, as it allows them to put some positive spin on the narrative, whereas getting fired is purely negative.

They already reversed course on the licensing policy and announced a much more reasonable one that addressed all the major issues people had. They're not going to fully backtrack to the old business model because that model was never profitable.

I think the model would have been profitable

[rsilvergun]

If they had stuck to it. The problem seems to be that they went on a buying spree in order to try and compete head-on with unreal and none of the tech they bought worked out. In other words it's another case of a CEO trying to reinvent a company and failing miserably

Re:

[edwdig]

You're pretty much the only person that thinks the old model could have worked. They were never even close to profitable, and they did not have a big enough team to keep up development at the necessary pace.

Competing head on with Unreal in the gaming space was never a viable option with them, and was never their goal. They have an engine that's great for the low end of the market and ok for the middle of the market, but isn't remotely usable for high end games. All their core decisions favored making things

Re:

[UnknowingFool]

I don’t know if he was gently pushed to resign rather than taking responsibility. After all, the changes tanked the stock price which is the worst transgression for the board. Screwing customers is not a problem for most boards.

Too late

[gweihir]

That cretin already did massive damage.

Fix the licensing problems

[rsilvergun]

You can fire as many CEOs as you want nobody trusts you anymore because even after all this you still left the clause in where you can change pricing structure anytime you want retroactively and potentially destroy a company.

I don't know how true it is but I read somewhere from someone claiming to be in the industry that they looked in the unity and ran it past their legal department and were told not just no but hell no. The claim was that this was a large game studio and they contacted unity to work o

Re:Fix the licensing problems

[edwdig]

Unity isn't used for big budget games because it just doesn't scale well past a certain point. It can't do things like split the rendering work across multiple CPU cores. Unity will do some tasks on other CPU cores, but generally only the first core will see heavy use, maybe a second one depending on your workload. You can offload some rendering tasks from the CPU to the GPU, but it's an all or nothing approach, which generally just means you have to choose if you want the CPU or GPU to bottleneck your game. You can't distribute the load to balance it. You can really only use a fraction of the CPU power available on modern CPUs. There's also a lot of workflow issues like how assets are managed and how the build process works that just make it brutally slow to work with if your project gets large.

Unity certainly is open to custom licensing. I've heard of studios that negotiated custom licenses that include source code access. They weren't even very big studios. Big enough to be an established business with multiple games in production at a time, but small enough that most gamers would never have heard of them.

Unity was never profitable. They survived off investor funding, and then off the funds from their IPO. Like many other businesses, they took advantage of their high stock price immediately after the IPO and used their stock to buy up a bunch of other business. The hope was that those other businesses would help them become profitable faster, but it just hasn't been long enough to know if that's going to work out or not. The new acquisitions haven't been fully integrated into Unity yet and there are likely going to be layoffs in the future as merge the companies together.

Things have settled down now after the IPO and the stock has a more realistic valuation, so there probably won't be a ton of acquisitions going forward. There is now an expectation to make the company profitable soon. This is what lead to the license changes.

Re:

[LDiCesare]

Unity was profitable for a while before the IPO, when they sold licences, around the time before Epic decided to basically give away Unreal Engine.

Re: Fix the licensing problems

[RegistrationIsDumb83]

Yep, Unity was just overstaffed and inefficient. Three different render pipelines, really? Plus all the services that'd get half built, tossed, and rebuilt, etc. They needed focus and to dogfood their own product. Unity is well known as a game engine built by a non gamedev company... Now they're bringing in some guy who has never worked in the industry at all. Unity is toast.

Re:

[edwdig]

One of the pipelines is legacy and doesn't really get active development.

They're not really overstaffed tho. Each of their feature teams is just a couple people. They're trying to get by with bare minimum teams and it causes a lot of problems. They rewrite their networking systems every 5 years or so because they only put about 2 people on the team and then the team moves on to another company. It's a fun experience when you're on a support call with them and you realize you're talking to the entire dev tea

Too late

[DrXym]

Unity's attempts to shake down developers caused many of them to jump ship with others almost certainly planning the same on their next projects. I bet their revenue curve over the next couple of quarters won't be pretty as less games launch that use it.

Sincere apologies

[null etc.]

I guess no one bought Unity's apology of, "we apologize for the confusion we've caused." Maybe Riccitiello will have an opportunity to better refine his apologies at the next company he ruins.