AppLovin offers to buy Unity Software in $17.5 bln deal (opens in new tab)

There are some Zuckerberg emails exposed as part of some subpoena process where he describes why Unity was a valuable asset to build Meta's AR/VR business. He goes on a lengthy argument about why owning Unity will create a value flywheel that could accelerate Meta's business by doubling down on Unity's engine as a core technology for building games and other AR/VR experiences: https://sriramk.com/memos/zuck-unity.pdf

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.

It just highlights the parlous state of the current economic structure even more then

I'm using it for 'dire', 'desperate' more than 'perilous', though when your ad agency makes more from your products than you do, you could also say the economic structure is in peril.

> The unimaginable runaway success of Fortnite took Epic from "market entrant" status to "dominant industry leader"

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.

They released Unreal 4 as freemium more than two years before Fortnite became a battle royale and took off. The latter has definitely fueled continued investment in the engine, but it was Unity that forced them to adopt the pricing model.

Is the Epic engine that much better?

> if they don't screw up the merger

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’re like 27% down from their IPO price two years ago. I don’t think their business has deteriorated so drastically that 17.5B would be attractive. I could be wrong though.

Yea, they've spent a lot of money over the last few years on questionable acquisitions (Weta for multiple billions, seriously?).

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.

Unity’s value decrease is mostly (solely?) due to market conditions. That means that their underlying business is the same as it was before the broader market downturn, which means their value should increase as market conditions improve. Unless they need to sell now, their value should increase in the future.

Fun story, I left my unity game running a test in editor over night, accidentally. When I came back in the morning, my harddrive was full. The reason? Unity logging the same telemetry error over and over because it was not allowed to phone home.

I have happily switched to unreal.

Is that really what people are afraid of? Why would they do that? They want developers to put ads in their games certainly, but I don't think they want to alienate the devs with ads in the tool. That seems silly

> Both are terrible for consumers/developers.

Unfortunately they don't get to vote on it.

Well, except that AppLovin is a (non-malware) ad tech company. So I mean, at least there's that.

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.

I'm not related to IronSource but this is some serious mischaracterisation of them...

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...