Unity, makers of the popular game engine, announced earlier this week it’s getting ready to levy some pretty significant fees on developers, causing many to rethink whether it makes more sense to actually go with the main competition, Unreal Engine from Epic Games. It seems Epic isn’t wasting any time to help transition those creating projects for Apple Vision Pro.

According to Victor Lerp, Unreal Engine XR Product Specialist at Epic Games, the company is now “exploring native Unreal Engine support for Apple Vision Pro,” the upcoming mixed reality headset due to launch in early 2024.

Lerp says it’s still early days though, noting that it’s “too early for us to share details on the extent of support or timelines.”

Lerp posted the statement on Unreal Engine’s XR development forum. You can read it in full below, courtesy of Alex Coulombe, CEO of the XR creative studio Agile Lens:

 

https://twitter.com/ibrews/status/1702088033493778798?s=12&t=Tj4Rk31fZOJWTdVggW6E4Q

During Vision Pro’s unveiling at WWDC in June, Apple prominently showcased native Unity support in its upcoming XR operating system, visionOS. Unity began offering beta access to its visionOS-supported engine shortly afterwards, making it feel like something of a ‘bait and switch’ for developers already creating new games, or porting existing titles to Vision Pro.

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As explained by Axios, Unity’s new plan will require users of its free tier of development services to pay the company $0.20 per installation once their game hits thresholds of both 200,000 downloads and earns $200,000 in revenue. Subscribers to Unity Pro, which costs $2,000 a year, have a different fee structure that scales downwards in proportion to the number of installs. What constitutes an ‘install’ is still fairly nebulous at this point despite follow-up clarifications from Unity. Whatever the case, the change is set to go into effect starting on January 1st, 2024.

In the meantime, the proposed Unity price increase has caused many small to medium-size teams to reflect on whether to make the switch to the admittedly more complicated Unreal Engine, or pursue other game engines entirely. A majority of XR game studios fit into that category, which (among many other scenarios) could hobble teams as they look to replicate free-to-play success stories like Gorilla Tag, which generated over $26 million in revenue when it hit the Quest Store late last year.

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Scott Hayden
Well before the first modern XR products hit the market, Scott recognized the potential of the technology and set out to understand and document its growth. He has been professionally reporting on the space for nearly a decade as Editor at Road to VR, authoring more than 4,000 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.
  • fcpw

    And just like that, Unity snatches defeat from the jaws of victory.

    • sfmike

      Predatory capitalism in action.

      • ViRGiNCRUSHER

        Of course… there can be good and bad Capitalism.. That’s when we need to hold these CEOS making decisions feet to the fire.

  • Christian Schildwaechter

    TL;DR: Nothing will change. The new Unity installation fees will primarily impact mobile F2P. VR game production calculations will be mostly unaffected, if Unity doesn’t retract/change the fees anyway due to the shit storm they created. There is a lot of drama, but not a lot of (new) reasons for Unity VR developers to switch to Unreal, and switching already running projects for non-technical reasons will make no sense in almost all cases. Unity will remain the choice for most VR developers due lower hardware requirements, and much better support for VR development. The rest of the comment is way too many numbers, skip to the last paragraph for AVP development support in UE.

    While I consider the Unity “pay per installation” scheme a rather stupid idea that will cause a lot of trouble and uncertainties in different places, it is mostly targeting the deluge of ad based F2P mobile apps. Unity already tries monetizing these by offering their own ad network, but a lot of developers prefer to use other ad platforms due to higher revenues. The games Unity is going for are usually pushed into the market with ad campaigns that often make up the larges part of the budget, as they have to reach very large install bases to become profitable, and there will be exceptions from the fees for those that buy other Unity services, so they are basically trying to force large ad driven mobile developers to pay Unity in one way or the other.

    The consequences for VR should be rather limited. For one getting any app to a 200K install base is not an easy task with an active monthly user base of ~6.5mn (late 2022) for Quest or (now mostly below) 2mn for Steam. And so far we have very few examples of F2P apps that were successful with in-game purchases. Most apps making money do that via the purchase price, with some like Beat Saber, Walkabout Mini Golf or Puzzling Places being very successful with offering tons of DLC, far exceeding the price of the game itself. With all these the revenue per installation is much higher than with F2P.

    Most (App Lab) VR games will cross neither the USD 200K revenue/12 months nor the 200K installations total line, and both have to be crossed for the fees to apply for all following, but not the previous installs. The majority of Quest Store games sell for USD 10/15/20, 70% of which the developers get. If one of these gets to 200K installs, the developers have made USD 1.4mn/2.1mn/2.8mn from their share. With at least USD 200K of these made in the previous year, they would have to pay USD 0.20 for ever new installation from there on, if they were using the free Unity Personal license. Let’s say they manage to double their installation base to 400K during that second year, they now owe Unity USD 40K, between 0.7% and 1.4% of their USD 2.8mn/4.2mn/5.6mn total revenue share.

    But using Unity Personal is only allowed for those with less than USD 100K/year revenue, so our hypothetical VR developers have to be subscribed to Unity Pro anyway, reducing the install fee to USD 0.15 for the first 100K installs/month, half that for everything up to 500K, going down at USD 0.02 for more than 1mn installations. Realistically this means USD 0.15 for most games, or USD 30K for doubling the install base to 400K in the second year, and USD 30K for every extra 200K installation in the following years. Some big titles may end up wandering into USD 0.075/install territory, as most games make a big chunk of their total sales in the first few days/weeks.

    And as the last batch of annoying numbers, the worst case scenario for Gorilla Tag: not only the ~2.5mn monthly users installed the game, or the 6.5mn active Quest 2 users, but every single of the ~20mn Quest buyers, meaning 20mn installation. And due to bad timing Gorilla Quest has to pay for every single one of them. And they also failed to get a Unity Enterprise license and are therefore forced to pay the higher Unity Pro prices. And the installations are spread evenly since the first release in February 2021, not the December 2022 Quest Store launch, making them miss the cheapest 1m installations/month tier at USD 0.02, increasing their costs by 50% to USD 0.03. In this worst possible case they would owe Unity USD 600K out of the USD 26mn revenue, or 2,3%. In reality most of the downloads were concentrated in a few month, which would have pushed them into the 0.02% tier, there is no way they have even half of that install base, and they wouldn’t really have to pay anything anyway for installations that happened before January 2024.

    The new install fees look dramatic (and are stupid for numerous reasons and very badly communicated), but for XR/VR, the impact will be very limited. I seriously doubt a lot of developers will worry about that once they have done the math. Switching to another tool chain comes with a lot of effort and risk, and doing it mid-project is usually a recipe for disaster , and for most XR projects and teams Unity is the way better option compared to Unreal, with the main exception probably PSVR 2 (hybrid) games. Unreal has benefits for larger teams/projects which can also hire experts that help with optimizing UE that by default expects a lot more powerful hardware than Unity. With most VR games still created by small to medium teams without technical artists and not aiming for a highly realistic graphics style, Unity will stay the major development platform for quite a while. Epic knows that and hasn’t exactly been very active in supporting and improving VR development for e.g. the Quest so far, so I’d suggest to first wait-and-see how their AVP support compares to what the Apple-Unity cooperation for AVP will offer.

    • kontis

      Having a “trust me bro” black box algorithm to calculate how much you have to pay is absolutely INSANE.

      How can you have a contract that you have no means to verify?!

      • Christian Schildwaechter

        TL;DR: I think this license is a reaction to the majority of gaming revenue now coming from rather simple mobile apps pushed into the market with expensive ad campaigns, and a lot of larger developers using this to hide their revenue and not pay any license fees to Unity. Unity tries to stop this with the one thing they can track/control. I really doubt that this is targeted at traditional/smaller developers or will really affect them. Unity has always been very supportive to smaller devs, and I don’t think that will change. The trust issue remains, so we will have to wait and see how responsible Unity handles the new fees.

        That’s one of the many issues I have with their “pay per install” model, but most likely also the reason why they did it in the first place. Up to now, the situation is sort of reversed, Unity has to trust developers to be honest and pick the Unity licenses that matches their revenue. So far that has been less than USD 100K for Unity Personal, USD 200K for Plus, with no limits for Pro/Enterprise/Industry.

        These thresholds are company revenue, not project revenue or earnings, so a company with 10 employees in G7 states will most definitely be above USD 200K revenue per years with salaries alone, so they’d have to pay USD 2000/year for every Unity developer seat. And I know a number of institutions and companies that are running way more than 10 seats with Unity Personal licenses.

        I’m not sure whether the EULA of Unreal Engine grants them the right to ask any license about their revenue, because the licensees have to agree to pay a certain percentage of the revenue to Epic, with generous thresholds. Unity doesn’t get parts of the revenue, so there would be no reason to check.

        In traditional game development for PC and console that’s not a problem. You can easily estimate the size of the team from the resulting project, and most of the time companies actually publish informations about project and team size, so catching license cheaters is at least possible.

        But we now have a massive shift towards mobile games, already generating more than 50% of all revenue, with revenue models based on micro-transactions and ads. These are often very simplistic games that a single developer could create in a few weeks, pushed into the market with massive ads and often rather short lived.

        With this it becomes extremely easy to cheat: A large developer can have employees create dozens or hundreds of mobile games, try which ones stick, make a lot of money from ingame-ads, but never report any of it, claiming that the game made no money, and have all the developer work as “independents” with their own license. Up to now the rather cheap Unity Plus allowed removing the Unity splash screen, so you can basically run a 200 person mobile game sweat shop with 200 Unity Personal and one Unity Plus for USD 400/year.

        Unity can obviously see this, with hundreds of millions of mobile installs from companies that claim that they never cross any of the thresholds that Unity has set for licenses, as the apps phone home during the installation. And I expect that exactly why there are going with a per installation fee: it’s the only thing they can control without having to rely on companies to truthfully report revenue.

        The result is nonetheless a shitty situation. I actually trust Unity that this is not just a stupid money grab targeting smaller developers, but a move to stop what is essentially massive license fraud from large players. So I also trust them to actually try and properly handle double installs, pirated copies, install bombing and demo installs, as they promise in the FAQ. Up to now Unity has been extremely supportive to the Unity and Indy community. The DK1 launched with three months of free Unity Pro, as only Pro allowed for plugins, a requirement Unity dropped shortly after, allowing the free version to be used for VR. With Unity 5 they also enabled all advanced performance features like Occlusion Culling for everyone, essential for power hungry VR apps. They support every XR system, and had abstraction layers enabling cross-platform XR long before OpenXR.

        So I’m not assuming that they now all of a sudden turned evil, but instead their trust based license model sort of broke with the now extremely predatory mobile game revenue models and development. And that’s why I believe that nothing will actually change. The new license terms shift a lot of power to Unity, and they could abuse that and screw developers over. But that would be incredible stupid and fire back. My guess is that they will continue to be very friendly and fair to most developers and not punish developers for becoming unexpectedly successful, and there are already a lot of safety checks in the conditions that ensure that. Instead they will go for larger companies that currently cheat them out of millions, and in a way that’s in everybody’s interest to both finance the further development of a freely available Unity and at least somewhat level the playing field for smaller developers that cannot pay for massive ad campaigns to push their apps into the market.

  • ViRGiN

    Idk, the closer we are to Vision release, the less interested i am in it.

    • Arno van Wingerde

      Well at the price, so am I. But if this works for creators and Apple releases a non-pro version at $1000 or so with actual contents then they might grab a serious share of the market. In a way I feel the same about the Quest3: a step forward in may ways… but will it finally get worthwhile content? Something that is even a remote match for HorizonCotM would make it an instant buy. Running toddler level graphics at a higher resolution… not so much!

  • ameba#23234 mdrea

    Eh who cares about some ar business headset with dubious performance in actual aaa gaming and some extremely unrealiable gesture control instead of controllers.

    I doubt any company can strap 4090 and 1000W PSU to my head without breaking my neck to do things above 30 fps in 8k

    • Arno van Wingerde

      Eh… there is more than one road to Rome. It may not fit for all games, but if slight delays are OK streaming games might do the job as nicely as a 4090, while being practical.