Did Unity CEO John Riccitiello resign? Pricing change controversy explained

John Riccitiello, CEO of Unity Technologies, has resigned amid controversy over the company's pricing changes for game developers. Former IBM President James Whitehurst will serve as interim CEO.

John Riccitiello, the CEO of Unity Technologies, a well-known company in the gaming industry for its cross-platform game engine, Unity, has officially resigned from his position. In addition to stepping down as CEO, Riccitiello has also resigned from the company's board of directors and his role as chairman. His departure comes after significant controversy surrounding changes to Unity's pricing model.

The decision to change the pricing model involved introducing a runtime fee for game developers. This fee would be charged every time users downloaded a game after it reached a certain number of installations and generated a certain amount of revenue. These changes were met with backlash from game developers, who argued that the new model could have a detrimental impact on smaller developers.

On October 9, Unity released a press release confirming Riccitiello's resignation and announcing James Whitehurst, the former president of IBM, as the interim CEO. The press release stated that Riccitiello would continue to advise the company during the transition period. Unity also mentioned that they would be conducting a comprehensive search for a permanent CEO with the assistance of a leading executive search firm.

While the press release did not provide specific reasons for Riccitiello's departure, it is widely believed that the controversy surrounding the pricing changes played a significant role. Riccitiello's aggressive pricing strategies, which he had employed during his time as CEO of Electronic Arts, had already garnered criticism from gamers and developers alike.

The pricing changes introduced by Unity in September were met with widespread criticism. The new fee structure, set to take effect in 2024, included a runtime fee based on game installations. Developers using Unity would be required to pay a fee for each installation once a certain threshold of downloads and revenue was reached. The fees varied depending on factors such as the region and the version of Unity being used.

The backlash from game developers was swift and strong. Many expressed feeling blindsided by the changes and argued that they had not been consulted or given the opportunity for dialogue. A coalition of developers, including Azur Games, Voodoo, and Geisha Tokyo, wrote a collective letter to Unity expressing their opposition to the changes. They likened the new pricing model to automakers suddenly charging consumers for every mile driven in a car purchased a year ago.

In response to the backlash, Unity quickly reversed its decision and made changes to the pricing model. They offered developers a choice between the new engagement-based pricing model or a flat 2.5% revenue share. Additionally, games built on Unity Personal would no longer be required to display the "Made with Unity" splash screen.

Overall, John Riccitiello's resignation as CEO of Unity Technologies comes after significant controversy surrounding changes to the company's pricing model. The decision to introduce a runtime fee for game developers sparked backlash from developers and led to Unity revising its initial proposition. The company now faces the task of finding a permanent CEO to lead them through this transition period.

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