This is AppLovin playing offense to avoid the emergence of a stronger competitor and instead become that stronger competitor.
Unity is not as strong in monetization technologies but it’s a desired asset since it has already a foot in with game developers.
Unfortunately building a game engine is not as profitable as building adware.
I guess Zuckerberg’s idea to buy Unity at certain point doesn’t sound that bad now. Clearly he wanted it for the game engine technology and not to build another ad revenue source. Kind of ironic how things play out in the long term.
Not sure I follow that logic.
We don't know what would have been the outcome since this never happened, but he saw Unity as a valuable core technology, so is reasonable to assume (whether you like Zuck or not) that Meta would have probably invested some serious money in making Unity (the engine) better.
Now that we are past that, we are looking at a company that can't grow its game engine business anymore, so they have started to invest in app/game monetization. But likely at the expense of being less focused on improving the game engine.
So the logic here is that Unity under Zuck (who is ironically the king of ad revenue models) would likely have thrived as a game engine. Instead, Unity as an independent company is now seen as nothing else than adware leverage.
Unity merges with IronSource 397 points 27 days ago: https://news.ycombinator.com/item?id=32081051
Who? It just highlights the parlous state of the current economic structure when some adware outfit is a 'peer' of one of the premier game engines.
This AppLovin offer is almost a step up from that.
[1] https://s27.q4cdn.com/966411597/files/doc_financials/2022/q1...
I am not sure how the continuation of micro monetization in mobile apps shows a large economic peril for the industry. Gamers have been voting with their wallets for stuff like this since 2011.
So, they’re desperate.
Fortnite.
The unimaginable runaway success of Fortnite took Epic from "market entrant" status to "dominant industry leader". It allowed them to pour hundreds of millions of dollars into Unreal development, and enabled them to finally release the engine under a freemium model to indie devs. That, (combined with the iOS ad-pocalypse) has led Unity to a long slow decline in developer share ever since.
The Unreal engine has been around for over twenty years now and has been considered one of the top mainstream engines for over a decade. I'd hardly call that a "market entrant".
As another commenter pointed out, Unreal went freemium two years before Fortnite anyway.
This is a really crap deal for shareholders. They'll go from owning a $15bn company, to owning half of a ~$30bn company, but with all the risk of the merger failing or failing to live up to promises, which, surprise surprise, is the norm.
They are making a big push into their game services division, which is more than ads now: matchmaking, lobbies, dedicated servers (Multiplay acquisition), etc. They also aren't trying to only target Unity for some of these. Multiplay in particular runs a lot of Unreal games, or at least they did (such as Apex Legends).
Unfortunately I don't see a world where these services move the needle at all for a giant behemoth of a company like Unity.
If it's a disappointment, the company could easily be worth a couple billion less tomorrow morning. And then AppLovin's deal might sound more interesting to Unity's shareholders. That's probably why AppLovin timed this announcement like this.
But you have to admit, like "GoDaddy", it's memorable, even if it's for the wrong reasons. From a marketing perspective, it might be a plus. Better than "AppTec" or the equivalent which would be forgotten instantly.
I have happily switched to unreal.
This sounds more like a merger - AppLoving is offering shares which would be worth 49% of the combined company.
Unity provides the Game Engine, AppLoving provides the ad/payment side - it could work.
Both are terrible for consumers/developers.
Unfortunately they don't get to vote on it.
But the play is more consolidation that anything. A large swath of mobile games use Unity, and a large swath of free games monetise using AppLovin. The Venn Diagram of these two is nearly a single circle.
They made an SDK to create installers for Windows that was used by 3rd parties with nefarious means. Said SDK/toolkit has been discontinued for years as well.
Hardly makes them a malware/adware company...
They barely get more than a billion/year in revenue while burning over half that amount. Paying nearly $20B for that is a huge leap of faith with regards to their future potential and hardly a sure thing. The stock market valuing them at that price during a period of zero interest rate with blinders on for risk is not really a valid stamp of proper value. The fact they agreed to sell at that price to a malware company might indicate as such too.
Not that this has anything to do with applovin though
There's a ton of industry structures I don't like. (I won't list various companies I don't like, b/c that would distract from my core point that they do have healthy economics from customers who do like their products.) Existing market structures are usually the result of some form of consistent action on the part of market participants.
So what would a better industry structure be, for customers, that would consistently make money for developers?
I'd like to be proven wrong on this in the future.
The whole Unreal engine with the editor and such is powerful toolset and you can tell it's an engine geared toward professional game designers and artists, basically whole studios, rather than programmers. Unity is really fun to play with if you are a single indie dev. Also it's much better for mobile development. You can do all with Unreal engine too but it's "meant to be" for FPS/TPS games and anything other than that is not harder just you need to "fight" the engine sometimes.
And the Unreal engine is open source. Well it's like open access because there are some very strict rules and limitations around it. But at least it's good for personal use https://www.unrealengine.com/en-US/ue-on-github
Unity is arguably getting worse and seems to lack a cohesive strategy. Last I checked, which was a few years ago, the engine doesn't have functioning networking feature (online multiplayer). They used to, but they deprecated it before failing to launch their new one. There's other stories in a similar vein.
You can of course make it work with third party plugins but it's not a good sign of engineering quality.
The downside of course is that it's not a master of anything, and Unreal has great showcases to demonstrate that.
Unity isn't going away, devs aren't going to magically switch to Unreal for the above reasons. Additionally the transition is massively disruptive for a business built around Unity. You don't just magically become Unreal experts as a team by reading a few tutorials and building a couple of prototypes. Actually shipping a game cross-platform requires a huge amount of technical experience to optimize and work around issues that each brings.
Alas, Unity leadership (CEO) had delusions of world domination and here is where they find themselves. I’m sure Facebook even made a prelim offer behind the scenes and Unity scoffed because they thought they would be a $50b company.
Like they let whatsapp be whatsapp and instagram be instagram?
With current market incentives we should expect these companies to become less benevolent, not more.
WhatsApp feels exactly the same to me. Do I just have a short memory?
Some Oculus users would disagree with you.
Given the level of anti-trust scrutiny aimed at Facebook, there's little to no chance they would receive approval to acquire Unity. Facebook probably would have invested the most money into future development, but they've also traditionally been the most hostile to third-party developers. Any value that Facebook can capture for itself, it will. I've been a Unity fan for years partly because they did seem intent on remaining independent.
I think the combination of Unity and AppLovin is smart. Unity has a tools business that needs more long-term investment and stability to compete against Unreal. Read the latest Unity threads here on HN, which devolved into Unreal and Godot love fests as soon as people smelled blood in the water. AppLovin is a revenue and profit machine but needs somewhere to invest its excess cash flow. Unity has the vision and AppLovin knows how to execute.
An independent, gaming-centric Oculus probably wouldn't have survived 2016 when HTC Vive shipped a much more advanced product than the Rift.