"We have heard you. We apologize for the confusion and angst the runtime fee policy we announced on Tuesday caused," the company said in a post on X. "We are listening, talking to our team members, community, customers, and partners, and will be making changes to the policy. We will share an update in a couple of days. Thank you for your honest and critical feedback."

News of the fee structure created furor in the developer community, which quickly closed ranks against Unity. "We have never made a public statement before. That is how badly you f—-ed up," wrote Slay the Spire dev Meta Crit. "There is no way Unity talked to a single developer before launching this," added Rami Ismail. In protest, many developers switched off Unity ads, and others were considering a class action lawsuit.

Unity announced the changes following a difficult couple of years that saw an Apple privacy change cut off much of its ad revenue. Last year, the company's stock price plunged and it initiated layoffs that impacted 8 percent of its staff, or 600 employees. It has also had a controversy around CEO John Riccitiello after he called game makers who don't consider monetization "f—ing idiots."

Following the initial uproar, Unity attempted to clarify its policies, saying it would only charge for initial installs, charities would be exempt and demos wouldn't count. Owners of subscription services would be required to pay the fee, not developers.

However, some developers who committed to Unity and its previous pricing structure have said they are still effectively screwed. "Put years and years of work into my pipeline. I did so under a simple per-seat license I am happy to pay. Now while I am close to release they spring something new on me. Not a price increase [but] a fundamental change in how we do business together. I have no options, cannot go back, can only bend and [pay up]," wrote The Falconer dev Tomas Sala.

It remains to be seen if Unity's changes will placate developers. "Just be honest, upfront, reliable. We need stability," wrote one developer in response to the company's post.

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Some 265 employees will be laid off, all related to Unity's professional services agreement struck as part of its purchase of Weta Digital's technology and engineering division back in 2021. Employees will have only a week to wrap up before their positions are fully terminated, according to FX Guide — a tough blow just before Christmas. In a statement, Weta FX said it will extend offers to as many affected employees as possible.

Unity will close offices in up to 14 locations including Berlin and Singapore, pending consultation with employees in some locations, while reducing its office footprint in San Francisco and Belleview, Washington. The company will no longer require that employees work from offices three days a week and will reduce "full in-office services" to three days a week.

After Unity's acquisition, Weta FX (the film industry VFX division) split off into a new and separate company. Unity, meanwhile, acquired Weta engineers along with tools for pipelines and FX, Weta's data platform, a library of assets and more. "Unity will retain ownership of the technology it acquired from Wētā in December 2021 and will be evaluating the best way to enhance its offerings with it over time. The technology will also remain fully available to Weta FX," Weta said in a statement.

Just a month ago, Unity rolled out some significant concessions to its developer pricing model after widespread backlash over its plan to charge developers for game installations. The move will directly impact developers, publishers and distributors. The upheaval of Unity’s business model came at the same time as a series of massive layoffs. In 2023, the company reduced its headcount three times in an attempt to cut costs. CEO John Riccitiello, who took much of the brunt of the criticism, stepped down last month and was replaced by former IBM president James Whitehurst, who is serving as an interim CEO.

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The layoffs add to the more than 1,100 jobs it has eliminated since 2021. Unity fired 265 people in November as part of what it called a company “reset,” all of whom were employed as part of its 2021 Weta Digital acquisition. The company also closed down 14 offices around the world. In May of 2023, it announced it would let go around 600 employees, following layoffs of over 500 people in 2022.

Last September, Unity rolled out some significant concessions to its developer pricing model after widespread backlash over its plan to charge developers for game installations. CEO John Riccitiello, who took much of the brunt of the criticism, stepped down shortly afterwards and was replaced by former IBM president James Whitehurst, who continues to serve as interim President and CEO.

After reporting record profits for 2022, the company has missed revenue forecasts over the last three quarters. In a shareholder letter, the company said it aims to emerge from restructuring as a “leaner, more agile and faster growing company.” Unity’s game engine is used in titles like Cuphead, GTFO and Kerbel Space Program.

With game sales flat over the past year, Unity isn’t the only company in that industry to see layoffs. As we detailed in our year-end video game roundup, The Embracer Group, which owns studios like Crystal Dynamics, Square Enix Montreal and Gearbox Software, laid off more than 900 people. Epic Games fired around 830 people, Sony cut 100 jobs at Bungie, CD Projekt RED and Sega laid off 100 employees each and Electronic Arts reduced 6 percent of its workforce, or around 1,130 employees.

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