Note to C-suite execs: squeezing every last incremental dollar of profit for your shareholders can be a recipe for disaster that ends in your unceremonious departure. John Riccitiello found that out the hard way when he “retired” with immediate effect as chairman and CEO of a stock-listed company called Unity Technologies after spotting what he thought was a golden opportunity to make bank off his paying customers.
His explosive change in prices last month unleashed a torrent of ‘f-bomb’-spiked criticism from clients, many of whom were sent fleeing into the all-too-welcoming arms of Unity’s rivals. It marks a cautionary tale of how to shatter years spent building up trust and goodwill essentially overnight.
In a statement on Monday, the software developer managed to announce an emergency change at the very top of the company’s leadership without so much as once explaining why Riccitiello retired so abruptly. After nearly a decade at the helm, his departure leaves the board scrounging for a new chief executive.
“Unity would not be where it is today without the impact of his contributions,” new chairman Roelof Botha said of his predecessor, while reaffirming to shareholders the company’s annual targets would not change.
Similar to the Unreal Engine developed by Fortnite publisher Epic, Unity provides the underlying backbone that enables video games to work at a basic level—everything from graphical lighting effects to the technology behind the physics of movement.
No game can function without one but they are typically not seen as a unique selling point and developing them yourself is prohibitively expensive. Even major publishers that once developed their own proprietary engines, such as The Witcher 3’s CD Projekt Red, have since abandoned them in favor of some form of licensing deal.
This frees studios up to focus on the more creative part of the development that can differentiate their product from the competition, such as a compelling story, interesting characters and innovative gameplay.
Last month, however, Riccitiello retroactively changed the terms of service agreed with developers announcing he would now levy a “Runtime Fee” each time a game using its engine was installed in addition to a monthly or annual licensing charge.
Since downloads are not necessarily tied to a developer receiving revenue—many games are for example free-to-play and earn their costs back through in-game microtransactions—this could mean sudden windfall expenses even for games developed years ago. For popular subscription services like Xbox Game Pass, the new Unity fee would fall on the relevant platform provider, such as Microsoft.
‘I am sorry’
The backlash was immediate and devastating, with a Reddit page devoted to keeping track of the torrent of abuse Unity received afterward. The outcry led to Unity walking back some of its changes and clarifying others.
The developer behind Rust posted a statement simply entitled “Unity can get f*cked” and pledged not to use Unity in the future, while indie label Devolver Digital suggested it would only greenlight games that didn’t rely on Unity. Among Us studio Innersloth said it would even go through the pain, effort and expense of reconfiguring already finished games to run on an entirely different engine.
In an open letter, Unity exec Marc Whitten sought to cool tempers, admitting management had not consulted enough before foisting the new price changes onto unsuspecting customers.
“I want to start with this: I am sorry,” he started off writing late last month, before ending with a “thank you for giving us hard feedback.”
Unity could not immediately be reached by Fortune for comment.
Riccitiello is a controversial figure in the industry due to his willingness to find new ways of charging customers for content that was often previously free.
Following his former time as CEO of Electronic Arts, the publisher was voted the “worst company in America” by Consumerist readers for two years running.
More recently he had to apologize last year for calling developers who didn’t push in-game microtransactions onto their audience the “biggest f*cking idiots”.
He himself has said nickel-and-diming players with added fees after they bought a game should be viewed simply as “charging” rather than “gauging” consumers.
Riccitiello’s ill-fated gamble last month to bolster Unity’s bottom line has come to symbolize the rapaciousness plaguing the business ever since it has become a legitimate force in the entertainment industry, with casting, budgets and sales revenue rivaling those of blockbuster Hollywood movies and major publishers floating on the stock market.
His retirement overnight on Monday may be a last-ditch effort by the company to prevent further damage, but the reactions vilifying Unity’s tactics suggest it has suffered a permanent loss of trust in the community.
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