Unity CEO John Riccitiello Resigns Amid Pricing Controversy

John Riccitiello, the Chief Executive Officer of Unity Technologies, has resigned from his position following a pricing change that ignited controversy and dissatisfaction among gamers and developers. This change proposed charging game development studios each time a game was installed using Unity’s code, which serves as the backbone for numerous modern video games. Large developers were already subject to licensing fees for utilizing Unity in their games. In response to the backlash, Unity has reversed many of its initial plans and issued apologies. The company announced that Mr. Riccitiello’s retirement would take effect immediately.

Unity’s game engine is fundamental to the creation of many popular video games, including titles like Pokémon Go, Genshin Impact, and Beat Saber. It is widely adopted by small studios, providing a versatile platform that aids developers in game creation by offering tools for animation, audio, and more. While it is possible to build a game engine from scratch, the complexity of such a task often leads companies to opt for ready-made solutions to save time. Unity, in particular, is favored by developers due to its broad adoption and accessibility, especially for beginners.

However, tensions arose when Mr. Riccitiello unveiled plans in September to change the way the company charged developers. This announcement sparked widespread outrage, with some developers considering abandoning Unity altogether. Gamers and fans also expressed concerns about the impact of these new fees on free-to-play games. Unity even had to evacuate its San Francisco offices in response to a death threat reported on social media.

Mr. Riccitiello later expressed his humility in response to the controversy, as it was not the first time he had clashed with the gaming community. Previously, he was compelled to apologize for using inappropriate language when describing developers who disagreed with his approach to monetizing their games. No specific reason was provided for his sudden departure.

John Riccitiello had been with Unity since 2013, joining from Electronic Arts (EA), the renowned publisher behind popular games like EA Sports FC (formerly known as FIFA), The Sims, and Mass Effect. He served as EA’s CEO from 2007 until his resignation, acknowledging that the company’s results would fall short of forecasts and taking full accountability for the situation.

In his departure statement, Mr. Riccitiello expressed gratitude for his nearly decade-long leadership at Unity and his commitment to supporting the company during the transition while anticipating its future success. Notably, he took Unity public in September 2020 in a stock market flotation that valued the company at $13.6 billion. Unity’s share price reached a peak of nearly $200 a year later but has since declined and currently trades at $29.70 per share. Despite growing revenue, which reached $553 million in the three months ending on June 30, the company still operates at a loss, with its most recent quarterly results showing a pre-tax loss of $188.5 million.

James Whitehurst, a former executive at IBM, will assume the role of interim Chief Executive Officer following John Riccitiello’s departure. This transition marks a critical moment for Unity as it navigates the challenges of pricing strategies and corporate leadership.