Unity is on the mend. That’s the view of Matthew Bromberg, who was appointed as CEO of the game engine maker just seven months ago after the previous CEO flubbed a price increase.
We heard from Unity on October 28 at our GamesBeat Next 2024 event in San Francisco, where I did a live fireside chat with him through the metaverse miracle of Zoom while he was in New York. Mercifully, it worked and we had a good talk about the landscape of gaming and Unity’s future. (You can use this $100 off discount code, HG24DEAN100, to register for GamesBeat Insider Series: Hollywood and Games on December 12 in Los Angeles on the same day as The Game Awards).
Since that time, Bromberg has filled out the company’s roster of new executives with a new CFO, CTO, CPO for ads and other importance positions. Unity also issued its third quarter earnings report on November 7. The company met its financial targets for the quarter with revenues of $429 million, down 2% from a year earlier. And the October 17 launch of the Unity 6 game engine has gone off without too many problems.
Under Bromberg’s leadership, Unity canceled the Runtime Fee that was announced in 2023; back then, the firestorm of vitriol from developers cost then-CEO John Riccitiello his job. Bromberg still has challenges, as the stock price is still down more than 40% from the start of the year. Rivals are on both sides. On the high end, Epic Games’ Unreal Engine (CEO Tim Sweeney also spoke at our event) is supported by the juggernaut of Fortnite, allowing Epic Games to choose developer-friendly business models and pursue an open metaverse strategy. And the open source Godot engine has also been gaining steam.
Unity has to make the right decisions to navigate its course, and that’s what Bromberg is prioritizing, tapping feedback from users — understanding their pain points — to make decisions like rolling back the Runtime Fee. I asked him about Unity 7 and Unity 8, but Bromberg said he was heads-down on making Unity 6 the best launch in the company’s history. He did say he was an optimist when it comes to using AI in the game development pipeline to make developers more efficient.
And his observations about the game industry were optimistic. He said that gaming has gone through cycles before, and we’re in a rough patch now, but game developers have always innovated their way back to growth.
“We focused on execution and discipline to drive more rapid product innovation and to restore the strong, authentic bond we have with our customers in our community. We’ve acted on those intentions over the course of the last 90 days in many different ways, and we’re feeling we impacted that positive momentum, both inside and outside the company,” Bromberg said in the recent analyst call.
Bromberg added, “We started off with a cancelation of the runtime fee, a reversion to a subscription based model in introducing price increases that customers could understand. And all this has unblocked our renewals pipeline and reconnected us. We thought that with delivery of Unity 6, the best performing, most stable version of Unity we’ve ever shipped, Unity 6 marks a fundamental change in how we’re going to approach the development cycle going forward.”
To see what else he said at GamesBeat Next 2024, check out the edited transcript or watch the video.
GamesBeat: Matt Bromberg is the CEO and president of Unity. Last time we talked, you knew exactly how many days you had been on the job. Do you still know that?
Matthew Bromberg: No, I stopped counting days. We’re beyond that point now.
GamesBeat: But just a short number of months. Not yet a year. The game industry has faced certain challenges over the last few years. We’ve seen 32,000 layoffs in the last two and a half years. Market saturation, shifting consumer preferences. Where do you see growth coming from, and which trends will have the greatest impact on industry growth in 2025?
Bromberg: The first thing I’d say is that it’s true we’ve experienced pain as an industry, but it’s always important to remember that the market is still more generally robust. The video game market is still bigger than the combined revenue of streaming video, streaming music, and global box office receipts combined. There’s a lot of opportunity. Coming off COVID, we had some slowing, but the gaming market, especially mobile, is more than 20% bigger than it was in 2019. There are ups and downs.
You’ve been covering this industry for a long time. I’ve been making games through several cycles. Sometimes, when we’re late in a hardware cycle and there hasn’t been a breakout console hit in a while, there’s sometimes a sense that gaming is less dynamic and that it won’t grow. That has always turned out to be wrong. The industry will always find its way back to growth. We as an industry will diversify away from some of the sequelization that plagues us. We’re going to get great new content from amazing creative individuals. We’ll get back to growth. It’s a cycle that we’ve had three or four of and we’re going to continue to have them, but the industry will grow again.
GamesBeat: What’s your view of AI when it comes to going back to growth?
Bromberg: It’s a big part of it. What we as an industry have to do is get a bit better at balancing the art and science of developing games. How do we bring our innovative, creative minds and data together in a way that drives innovation? Part of the reason I’m so excited about being at Unity is I feel like we can help change the calculus by making it easier and faster to make games, and therefore enable more innovation and more growth.
AI is a big part of that. I am an AI optimist. I think AI can help us transform and make the game creation experience better and faster. As someone who spent a long time running a game company, the calculation you have to make–how many new game starts can I afford this year? How much innovation can I afford versus making safer choices? If it’s faster and less expensive to make games, you’ll make more games. AI will help drive that in a meaningful way.
Today that looks like maybe intelligent chat-based help and other things. We have a great product of that nature. But I think tomorrow will look more like telling software what you want it to do. Spending hours dropping lighting probes or learning how to use a shader tool–we can use AI to obfuscate some of the complexity of game-making and allow professionals to spend more time and value innovating. I fundamentally believe that it’s one of the solutions to growth in our industry, and it’s one that we’re invested in.
GamesBeat: Unity has been trying to return to growth as well. Where do you see growth happening, knowing that you already have 70% of mobile game market share?
Bromberg: It’s important to remember for us that Unity is principally a cross-platform game creation tool. Cross-platform means that as we continue to grow with AR, that leans into our strengths. The other thing to remember is a lot of what we have now are new console or PC-related starts. It’s important to remember that 25% of the top PC games on Steam are also made with Unity. It’s not just a mobile company.
Also important to remember is the aspect of live games. When we were talking about where growth is going to come from, existing games are going to get cheaper and cheaper. A lot of innovation in that sense is moving inside these franchises. That’s a challenge for the industry, but also a continued source of growth. Our ability to build a platform with tools that help you through the whole life cycle, from prototype to release and also into live service–again, remember that monetizing users and acquiring users is our strategy to continue to grow. We want to do all that in the context of reminding ourselves that customers are the center of everything we do. Being a good partner will be the foundation of all that.
GamesBeat: One thing that triggered the CEO change at Unity was the decision to implement the runtime fee price increase. You reversed that decision. Can you fill us in on how you’re making decisions? Can you walk us through the process for that reversal?
Bromberg: At Unity we’re trying to reinvent the company and be a fundamentally different company. The most important piece of that is having deep partnerships with our developers and connecting with them and understanding their needs and pain points. When I came to Unity about five or six months ago, the first thing I did–I had read about the runtime fee issue. I was very much aware of it. But the first thing I did was get on a plane and start flying around the world to ask folks – and not just large customers, but I spent a lot of time in dev groups in different cities, hobbyist groups – just trying to understand how they were connecting with us. How, in particular, did the runtime fee strike them? What did they think was the best way to fix it?
The very first thing you have to do, if you want to make decisions that your customers appreciate, is you have to ask them. It’s a bit of a cheat code. People will tell you. They told me, again and again, all over the world, that folks valued Unity as a partner, but they didn’t like the way we were connecting with them. They didn’t like the fact that we hadn’t consulted with them. They didn’t like the way we were planning to charge them. They were very open-minded about paying us more. They understanded we were delivering a lot of value. They just didn’t like the way we were doing it.
We went into a deep consultation with them. Many people were surprised by how long it took us to announce the reversion of the runtime fee back to a more traditional subscription model, but how we did it was at least as important to me, if not more so, than what we were going to do. Making sure that everybody knew in advance, that there were no surprises, that we fully grasped all the issues, that was a very important piece. To your question, it’s not just about the runtime fee, which is just one decision. It’s our intention to make all the decisions about the company in that same way.
My experience in general is that if you do things in the right way, you tend to get better outcomes. It’s about the quality of the process and the authenticity with which you go into it and the openness with which you go into it. That’s the kind of company we want to be going forward.
GamesBeat: How do you envision monetization models shifting to sustain long-term growth?
Bromberg: The heart of game development has always been the seamless integration between game design, an understanding of how that design leads to engagement, and then how monetization will be an outgrowth or downstream impact of that engagement. That unified process, which is increasingly becoming personalized for players given our ability to leverage data to create different experiences–that will always be at the heart of how we think about monetization downstream. The heart of all of it is we need to understand player behavior and player preferences, and then use that to maximize return, but in a way that is authentic to the game, a way that grows organically out of the game, and is deeply respectful of players.
As an industry we still think more about CPM than LTV. What I mean is, we think about generating a return in the immediate sense rather than thinking about the lifetime value of players. That process of deeply understanding players and then using that to inflect the entire life cycle of development, improving how you acquire and monetize, that entire life cycle is exactly what we’re focused on. It’s what we want to have Unity specialize in and excel at.
GamesBeat: What game are you most excited about right now?
Bromberg: Since I started working at Unity, I haven’t had as much time as I would like to play. The last game I was playing really deeply before I began was called Last Train Home, by Ashborne Games. It’s a PC game, the kind of thing I really like. I came out of MMOs and RPGs. Historically-based RPGs are my thing. This is a game that follows some Czechoslovakian legionnaires after the Russian civil war. They’re trapped in Russia on a train along the trans-Siberian railway to get back home. It’s an extraordinary game.
I’m also really excited about a new game being built by a very cool studio called 10 Chambers. If you saw any of Unite this year, we featured that game, called Den of Wolves. It’s built in Unity 6. It’ll release in 2025. It’s been described as Payday meets Inception with some Ghost in the Shell thrown in. If that makes sense to you, that’s the vibe of the game. I’m looking forward to that as well.
GamesBeat: You didn’t mention competition so much when talking about your decision around the runtime fee. What is Unity’s position or advantage from this competitive viewpoint? Epic Games, with the Unreal engine, finances the development of their technology with the success of Fortnite. You have some open source engines like Godot coming along. How do you feel about the decision-making that has to happen in the context of competition?
Bromberg: We’re deeply respectful of all our competitors in the market. We know that folks have a lot of options. We like to think about what we can do best and what we can do that’s unique. Unity as a company is uniquely capable, in an integrated way, of helping developers through the whole life cycle of the experience. Prototyping through building a game through operating a live service and then turning to UA and monetization. There’s no other company that I know of in the world that’s capable of helping developers with that whole life cycle. That’s what we’re focused on.
It’s important to remember that Unity is a platform. It’s not just an engine. Extensibility is its strength. The extent that we can help bring the best possible tools to bear for developers throughout that life cycle, whether we build them or third parties build them, but we can integrate those things tightly and deliver value–if we can do that, there’s plenty of opportunity for us regardless of what our competitors do.
GamesBeat: How far are we along with democratizing game development? Where is that heading?
Bromberg: In some ways I think we’ve achieved that vision. If you think about 20 years ago, when there were no game engines whatsoever, the founders of Unity had a dream that they could create a tool that would make game-making accessible to millions of people. We have achieved that vision. There are folks who sat in their living rooms and made games that millions of people have played. They used our tools and the tools of others to do it. If that isn’t the achievement of democratizing game development, I don’t know what is.
The question now for us is, what does that mean going forward? For us the answer is in the last question you asked. We still have an opportunity to democratize a broader, deeper tool set throughout that entire life cycle, including, crucially, how folks are operating live games. People are now operating multi-billion-dollar games inside Unity. When games are successful, they’re moving quickly through prototyping and building into live. Then they need to go find users and monetize inventory. Democratizing that process, providing tools for everyone to be able to do that from an incredibly high level, is the next area where democratization is going to take place.
GamesBeat: We heard a lot about the metaverse today from Tim Sweeney and Neal Stephenson. What’s your own view of the metaverse?
Bromberg: I would never ask you to believe my view of the metaverse over Neal Stephenson’s view. Much of what I think about it I probably gleaned from him. I believe, and I think we’ve already seen, that there’s a tendency for players and people to want to engage really deeply inside environments in which they’re comfortable. It’s always been my view that the beginnings of the metaverse are already with us. The closest things we have are the deep, expansive, ongoing experiences we have in video games. Those worlds are, I think, what we need.
But there won’t just be one thing. There’s going to be a lot of things. AR and VR will coexist. Sometimes you want to be in an immersive experience with a headset. Sometimes you’ll be wearing a set of glasses with a light AR experience. Sometimes you’ll just be looking at your gaming device. We find ourselves often imagining that there will only be one version of the future, but the past has taught us that there will be multiple versions.
I do believe, and I’ve seen the data–we’re thinking hard at Unity about how we enable the experience and provide tools to help developers deepen the experience inside live game environments. That’s the pathway through into the metaverse.
GamesBeat: You just launched Unity 6. Do you have any early feedback?
Bromberg: We’ve been really pleased by the early feedback we’ve received. It’s the most stable version of Unity we’ve ever shipped. We spent more time than ever on ensuring that what we offer from an upgrade perspective is going to be simpler, less problematic, and easier as our customers migrate. The early reviews have a really positive vibe to them. We’re very much looking forward to leaning into Unity 6, supporting it and helping folks use it for many years to come. We’ve also announced that we’ll update Unity 6 in a very different way, so that we no longer force our customers to choose between bringing new features on board and losing stability. We’re very focused on leaning into Unity 6 as the basis on which folks will make games with us for many years.
GamesBeat: What is the road map looking like for Unity 7 and Unity 8?
Bromberg: I’m all about Unity 6 right now. We just released it. I know we have a tendency to start talking about several versions at a time. I actually think that’s a mistake. Our entire company is focused on making Unity 6 the best it can be. Yes, we’re also in the back creating new things for another version, but I’m really interested in making this version as perfect as it can be.
GamesBeat: We had some interesting feedback from Tim Sweeney about the future version of Unreal, Unreal Engine 6. He talked about trying to solve the problem where you could have a battle royale experience of thousands of players in a single shard. The other was combining user-generated content and Unreal Engine 5 into the same kind of experience. Essentially having a metaverse game engine at some point. They’re stretching for some big things. What are some big things that Unity is going to be shooting for?
Bromberg: Multiplayer support and building out multiplayer tools in the ways that Tim described is undoubtedly an incredibly important piece of the future of gaming. Unity 6 contains within it a real upgrade in our capabilities in that respect. We’ll continue to invest in that, because the majority of games created today are multiplayer games, and they’re just going to get bigger and deeper. That’s a major focus of ours as well.
I also believe it’s important for Unity and Unity developers to be able to build experiences at any time on any platform. Remember, especially when you’re talking about the metaverse, about AR and VR, it’s important that games be able to run on these new devices, on headsets, on glasses in the future. That’s our core strength and one we’ll continue to double down on, so that experiences made in Unity can be experienced anywhere. That’s a crucial part of the future as well.
Question: What are your thoughts on a first-party studio or studios at Unity? Not necessarily to make a Fortnite, but how could that play into making the engine better?
Bromberg: It’s incredibly important that we be able to experience the use of the engine as game creators. To your point, that’s a way to create a feedback loop for our engineers and product designers so that we know what to deal with. It touches the first question Dean asked me about what we want the company to be. We very much want the company to have this direct feedback loop with our customers to build products that are effectively designed by our customers, because they’re designed with customers’ needs in mind. All of the innovation that we’ve had inside Unity has been sparked by customers’ needs.
The truth is, we have a lot of access to that kind of information. We make and distribute lots of pilot games through our Supersonic group out in Tel Aviv. We have a part of our company that does make full games and engage with developers when help is needed in making parts of games. We’re constantly connected to our customers in that way. What we maybe haven’t done as well as we could have in the past is completing that feedback loop.
It’s not that we don’t have the feedback or that we’re not engaged with our customers. Many hundreds of our engineers and developers are constantly in dialogue with them. The last piece is, how do we get that back into the product development and engineering cycle and improve the product? That’s the part we need to get better at. I don’t know if we need to start a games business in order to achieve that. I spent a lot of years making games. I love the games business. For us as a platform, it’s much better to be able to devote all our time and energy to our customers and building out that whole platform.
