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I have to say, the only thing more surprising to me than seeing the board actually hold Riccitiello responsible for this (with consequences) is seeing that thei

by cojo 3y ago

I have to say, the only thing more surprising to me than seeing the board actually hold Riccitiello responsible for this (with consequences) is seeing that their interim replacement / transitional CEO is someone with a pedigree that, on the surface, seems even more management consulting / investor / revenue focused than Riccitiello was himself. To be clear, I know essentially nothing about James M. Whitehurst other than what is readily publicly available (IBM / Red Hat, advisory roles, etc.). But my read on a lot of the Unity crisis, as a long-time game industry veteran myself, was that one of the increasingly common "management consulting" / investor- & revenue-focused type of gaming executives (e.g. Riccitiello, Don Mattrick [Zynga replacement CEO when Pincus stepped down], Kotick [Activision-Blizzard]) had finally overstepped their bounds and let revenue goals drive decision-making just a bit too far without customer consideration. So, I had assumed that if Unity did make a leadership change here, it would be in a direction away from that - i.e. a more industry-seasoned executive with less of a pure revenue / "business" focus. I think I clearly misjudged the situation here in light the Whitehurst pick; while it's possible that is truly just an interim role and they will still pivot to this in the final hire, or that I simply misjudge "the label on the tin" and Whitehurst is very culture / customer focused, I don't think I would bet on it. This seems like the board actually "doubling down" on driving revenue results - and fast.

djmips 3y ago
I feel it's unfair to include Mattrick in here - he came up as a gamer, making games as a teen and rolling that into his own company so at least he has roots as a developer and I feel a dev/gamer connection but I respect your opinion.
- cojo 3y ago
  I think yours is a fair opinion as well, to be clear - I actually debated editing him out for a couple of minutes after I first posted, because I do know that his background was truly heavy on the gamedev side of things early in his career. I have my reasons for thinking things changed later on, but they are subjective / personal opinion based on personal experience, so I respect anyone who would disagree and exclude him from a list like this.
Willish42 3y ago
"doubling down" indeed... One possible interpretation of events is that he was ousted not for the initial proposal and backlash but precisely for how he backtracked after the fact -- perhaps the board gave a clear mandate and Riccitiello was unable to successfully change pricing structure to match financial expectations. That would explain the replacement. Things aren't looking great for Unity right now...
- cojo 3y ago
  Yeah, I think this could definitely be one explanation. Other commenters in the thread have also given good thoughts / potential scenarios in similar veins - essentially that this was actually a failure of messaging, sticking to the plan, and / or both, plus some other combination of "no, seriously, we need to make money and become profitable, nothing else matters as long as the boat still floats, make it happen and keep this ship going." And I do suspect that Whitehurst will likely be a better fit for that. A seasons gaming industry executive (regardless of investor / revenue focus) may actually be a negative if that's the goal right now... I'll be very interested to see how this all turns out.
- strgcmc 3y ago
  I think that's reading too much into, what is fundamentally a very normal and common way of dealing with CEO turnover -- appoint a safe, business-friendly steward of a CEO, while you stabilize the crisis and decide who the real long-term leader should be. The word "interim" was clearly used, and there's no hint in the PR statement about this being a permanent appointment. So I don't think it's reasonable to equate this to a clear doubling down of anything. At the same time, a guy like Whitehurst is a safe, relatively unimpeachable medium term choice, not like someone you'd use for a truly short interim 30-90 days while you execute an executive search quickly. If you need him for 1-2 years of just don't rock the boat leadership, it'll probably work out fine for the company and the board would be satisfied.
- phire 3y ago
  Boards don't micromanage to that level (or more, they shouldn't) There might have been an explicit mandate that Unity's pricing structure should be changed, but more likely it was just an explicit or implicit mandate that the Unity division should produce more revenue (or profit). The actual details of how to achieve that mandate would be left up to Riccitiello and his management team. My interoperation is that while the board probably agrees with the need to change Unity's pricing structure, Riccitiello is being ousted for the poor implementation with a proposal that generated so much backlash and then some pretty poor handling of that backlash.
ethbr1 3y ago
Right now, I'd imagine Unity is more concerned about placating their investors that the company isn't going to fall off a revenue cliff. Appointing a "developer-friendly" candidate would have caused more uncertainty. As a temporary pick, I'd guess Whitehurst is intended to message "We realize we screwed up, but there won't be any sudden changes." The reaffirmed guidance for current quarter is hilarious though, given any changes would play out in future time (e.g. developer flight for next project).
- cojo 3y ago
  Agreed - the reaffirmation of guidance almost felt to me like a "seriously guys, why are we down 22% up front, you know this doesn't impact short-term revenue..." which... definitely misses the point. It's interesting that after-hours / future trading doesn't seem to have responded positively (yet). Maybe that's just another symptom of lost trust as well.
airstrike 3y ago
Interim CEOs generally tend to be either a board member or a C-level executive that take on the role just to manage day-to-day CEO duties while the board searches for a more permanent replacement. In this particular instance, Whitehurst isn't a board member, but per the press release[0] he is a "Special Advisor at Silver Lake". Silver Lake is one of Unity's largest shareholders (~10%) and Egon Durban is on the board. EDIT: Also worth noting Silver Lake, along with Sequoia, committed an additional $1Bn into Unity at the time of the IronSource acquisition in the form of convertible notes with a conversion price of $48.89 / share[1], which is at a slight premium to the price at which Unity's stock traded then (7/15/2022) and at a meaningful discount to their current share price of $29.70 -- which supports the (admittedly speculative) argument that SLP's voice on that particular board is all the more prevalent today. —————————— [0]: https://www.businesswire.com/news/home/20231009494331/en/Unity-Announces-Leadership-Transition https://www.businesswire.com/news/home/20231009494331/en/Uni... [1]: https://investors.unity.com/news/news-details/2022/Unity-Announces-Merger-Agreement-with-ironSource/default.aspx https://investors.unity.com/news/news-details/2022/Unity-Ann...
- cojo 3y ago
  This is helpful context as well, in addition to doomlaser's explanation of his background re: IBM and Red Hat. Thanks for sharing it. I wonder to what extent Silver Lake drove this overall decision (vs. others on the board potentially initiating it)
- Spoom 3y ago
  Ah, Silver Lake, of Skype acquisition and zeroing-out employee equity fame. https://www.wired.com/2011/06/skype-silver-lake-evil/ https://www.wired.com/2011/06/skype-silver-lake-evil/
  - hedora 3y ago
    I didn’t realize they screwed over some of the execs by zeroing out options. The night before the same transaction, they issued a pile of diluting shares to themselves, effectively clawing back something like 50% of the rank and file employees’ stock options. I might have the date and percentage wrong, but it doesn’t really matter. Silver Lake are total bastards and probably belong in jail. Avoid.
hn_throwaway_99 3y ago
Given the information posted about Whitehurst in another comment, https://news.ycombinator.com/item?id=37825689 https://news.ycombinator.com/item?id=37825689 , I strongly disagree with your assessment of him.
- cojo 3y ago
  I agree! I posted before that comment, which was definitely helpful - that context (and some other helpful replies here and elsewhere in the overall thread) have changed my assessment as well.
rat9988 3y ago
"interim replacement / transitional CEO is someone with a pedigree that, on the surface, seems even more management consulting / investor / revenue focused than Riccitiello was himself. To be clear, I know essentially nothing about James M. Whitehurst other than what is readily publicly available (IBM / Red Hat, advisory roles, etc.)." To me, it seems he has plenty experience with managing companies.
- cojo 3y ago
  I agree - this may be unclear phrasing on my part. What I meant in my original comment was, "wow, this seems like a hire that is only focused on finding someone with lots of experience managing, and not at all on the gaming industry / customer goodwill". So I think you're right - and I also think this shows how I misjudged how I originally thought a scenario like this would have played out.
jzb 3y ago
I was at Red Hat while Jim was CEO. He’s very culture focused and is an excellent choice for restoring faith there. He got great results while at Red Hat, but they plucked him out for a non-CEO role at IBM after the acquisition. IMO that has been IBMs greatest sin in its handling of Red Hat. Jim was active on memo-list and seemed to listen to people. That doesn’t mean he’s perfect, but I’d give him very high marks and I think that he had a lot of goodwill among Red Hatters as CEO.
- linuxftw 3y ago
  [flagged]
  - NegativeK 3y ago
    > Everyone has Mac Books now. I don't even work there and I know that this is, at the least, hyperbole.
    - dralley 3y ago
      I do work there and it's total BS, certainly as far as engineering goes. Maybe in marketing / sales / HR the story is different, but the overwhelming majority of engineering, support and QE (including the management chain) use Thinkpads with Fedora or RHEL.
  - KerrAvon 3y ago
    [flagged]
    - gorjusborg 3y ago
      What codewords would those be?
    - fyrn_ 3y ago
      GP doesn't exactly seem fun at parties, but calling them racist seems pretty extreme
    - 3y ago
jameshart 3y ago
I’d be careful drawing too many parallels between running Unity vs running a game publisher. Unity is a developer platform/tooling company. They don’t care about hits or franchises - they need service, stability, community, and technology innovation. Game publishers are creative industry plays, like movie studios. Completely different business. Of course Epic confuses things by being in both camps but I don’t think Unity is confused that they are competing with Epic in the sense of needing to outmatch Fortnite.
joecot 3y ago
I think back to Ellen Pao at reddit. Ellen was brought on as CEO, and was the face of a number of very unpopular decisions. All those decisions had one purpose -- jettison the things that made the site rough around the edges, and find ways to monetize, so they could make investors happy and work on going public. The backlash was staggering, and much of what they tried was rolled back. Ellen Pao took the blame for it, but it wasn't actually her fault. The founders just scapegoated her in order to make changes they needed for investors -- and depending on how cynical you are, they picked an asian woman so that they could channel internet racism and sexism as part of the distraction. Years later, they did the same thing, making multiple unpopular monetization changes, but this time the CEO taking the backlash is Steve Huffman himself, not a scapegoat put in front of him. CEOs don't make decisions on their own, not really. This pricing change was the direction the company wanted to go in, and they got put on their heels, but only temporarily. They're still going to try to find ways to aggressively monetize.
- mvdtnz 3y ago
  That is some incredible revisionist history.
  - ribosometronome 3y ago
    Elaborate?
    - mvdtnz 3y ago
      What is there to say? The decisions that OP says were not hers, were hers. And the claim that they chose an Asian woman for the intended purpose of setting a racist mob against her is completely unfounded and frankly racist itself. Believe it or not, there are some Asian women out there that have qualities other than being the target of racism.
      - dralley 3y ago
        Most of the decisions Ellen Pao made, especially the banning of the FPH subreddit, was genuinely for the better. She bent over backwards, IMO, to avoid the hate - and should not have.
Waterluvian 3y ago
“with consequences” Depends how many millions he’s accepting to walk away.
rapfaria 3y ago
Isn't Riccitiello stepping down a standard operation procedure in a situation like this?
jmull 3y ago
I don't think you can really draw conclusions from an interim pick like this one. It's who they choose after the search that will tell you something. But things don't look good no matter who they choose. Unity has to become sustainable... that, or go out of business. Their fundamental problem is somehow getting revenue and costs in line with each other. Here are some general ways that could be done... * Squeeze a lot more money out of existing customers * Get a lot more paying customers * Cut spending on things that impact revenue a lot less than the cut saves The first one is what the last CEO tried with that cockamamie licensing scheme. You could go at it in other ways but in the end the impact on customers is the same so I don't think the reaction would be a lot better. Is there any clear way to accomplish the second, at least without an even larger negative impact on revenue? For investors, cutting cost is the least desirable -- they want to grow, not shrink. And customers also don't like to get less for the same price. But perhaps there is a way to cut costs that would spare what provides the core value to customers, and perhaps a business guy could get shareholders to accept that it is the only way.
- Sakos 3y ago
  I don't understand how their cash burn rate is so high that a billion in revenue isn't enough to stay in the black. What are they spending so much money on?
  - ekianjo 3y ago
    Marketing and sales costs have increased tremendously
  - timmytokyo 3y ago
    They've been on a hiring spree, with a ~50% annual growth rate for the past several years [1]. [1] https://stockanalysis.com/stocks/u/employees/ https://stockanalysis.com/stocks/u/employees/
- ChuckMcM 3y ago
  I concur with this, their interim CEO is the person who can do the needful things with respect to cutting executive pay, laying off people, and outright firing others. Once the organization has been pruned, the "real" new CEO comes on board and is given a shot at rebirth with a new point of view.
HillRat 3y ago
I'd argue that what Unity needs is someone who's got a background in enterprise software, because selling to game developers is very different than selling games. No one with (successful) executive experience in enterprise software would have signed off on Unity's original revenue plan, simply because the number one rule in enterprise is "don't fuck with the customer's business model," which the "pay per download" model certainly did. Hiring a game industry CEO who pioneered predatory monetization models and was responsible for horrifying managerial practices within and between studios was a terrible choice for Unity, and his evident contempt for developers showed through often. Whitehurst, on the other hand, has a history of strong execution across multiple industries, and built a reputation as someone who protected Red Hat's culture against attempts from within IBM to "Big Blueify" it (possibly to the detriment of his own role within IBM). Even as an interim, having him onboard is a good sign for how Unity is looking to repair its relationships with developers.
- doctorpangloss 3y ago
  > simply because the number one rule in enterprise is "don't fuck with the customer's business model," On the other hand, the continued growth of gaming revenues, for both developers and services providers, compared to all other creative industries, is all attributable to innovations in business models. I suppose if people rocked the boat as little as you suggest, the only software being sold to game developers would be Denuvo.
  - InSteady 3y ago
    Something tells me there is a fair bit of wiggleroom on the line between "no innovation whatsoever" and "making a large number of my customers situation untenable." I think innovation will continue just fine. Disrupting a business model is not the same as selling software to people under terms that are obviously and immediately harmful. Unless you are really clever and they are really dumb, I guess.
  - lolinder 3y ago
    You're making the exact mistake that OP warned against at the beginning: "selling to game developers is very different than selling games". Even game studios can't just change things willy nilly. If Baldur's Gate 3 had been a microtransaction-funded F2P game, it would have been a flop—their target player base doesn't like that business model and wouldn't have gone for it. It's better to try out a new model with a brand new franchise than to try to pivot an existing franchise. Enterprise software has these same constraints and more, because monkeying with the business model doesn't just mildly irritate prospective customers, it can and does throw off years of planning for thousands of people per company. They can't just shrug and decide to not invest in the next installment in your game franchise, they have to re-do their corporation's 5- and 10-year plans.
reactordev 3y ago
If anyone can save the stinking ship that is Unity, it’s Whitehurst. This is said by someone who wants nothing more than to see Unity die. Whitehurst was pretty instrumental in getting Red Hat sticky in places where it was just RHEL. Open Shift, Open Stack, etc all drove value-add for the business and for their customers. Cloud is fickle though so selling tools to studios and trying to compete with Unreal in the VFX space is how Unity moves forward. Take your lashings from the game devs. Shore up your presence in VFX, Movies, Film. Evolve. The tsunami has squarely landed on Godot’s doorstep. It will be up to them on how they manage the swell.
- doctorpangloss 3y ago
  While I don’t think you deserve to be downvoted for this, your comment is full of opinions that, as a game developer, sound 200% wrong to me. For the sake of curiosity… what are you talking about?
  - reactordev 3y ago
    I’m talking about Jim Whitehurst taking Unity in a different path and leaving us game devs the f#^k alone. We’re done. Go sell to movie studios, VFX shops, Video Wall Warehouses, digital twin and construction. Sell enterprise software subscriptions. I think we both agree that small indie studios will not be returning no matter what promises are made, who is CEO, or what new shiny monetization idea they come up with next. I wish him the best of luck.
    - doctorpangloss 3y ago
      > I think we both agree that small indie studios will not be returning no matter what promises are made One thing I agree on: more often than not, behind an interesting piece of art lies an interesting personality. To advance the conversation based on some substantive facts, based on my conversations with creators of large free to play Unity games, all were already using IronSource and were not impacted by the changes anyway. As a game developer who publishes himself, I do not plan to migrate away from Unity, and I wasn't really impacted either. I can't speak for the 30 or so studios who posted pleas to revert the changes, but based on what happened, I believe they got what they wanted. So if their decision-making is rational / based on facts, I don't think they're migrating either. This is all to say that when you have no budget, so you value your time at zero and you have no visual art you didn't author yourself, it's easy to put 100% of the personality into the product, and make that The Thing. There are people I know who turned 20,000 followers on a TikTok about games into a $1m check for a game studio! This is a viable strategy, it is uniquely suited to people to have opinions about game engines. But my facts-informed opinion is that this isn't representative of most game developers, and that they are actually really happy with Unity and relieved that the pricing changes found a middle ground that is less emotionally charged.
hackerlight 3y ago
> board actually hold Riccitiello responsible It could also just be a PR move. Riccitiello is disliked among Unity customers, so you get goodwill by firing him.
beebmam 3y ago
Bring back engineer CEOs. I'm sick of this trash.
- r00fus 3y ago
  Unfortunately, in our economic system this is not allowed unless that engineer CEO happens to have incredible clout, financial control or both.
- intelVISA 3y ago
  Don't be silly, we're in the era where engineers are both smart enough to wrangle massive technical goals yet also need many layers of babysitting from their betters. You may know what a CRDT is, but (apparently) the Trello board is beyond you.
hintymad 3y ago
> was that one of the increasingly common "management consulting" / investor- & revenue-focused type of gaming executives My read of this debacle is that the Unity CEO did not pay attention to details. It's as if he had ever thought of how the policy would play out -- a signature move of a corner-office boss who simply delegates everything about product to his lieutenants. Or worse, to the lieutenants of lieutenants. This is in such contrast with those founder CEOs, who painstakingly think through product and policy changes.
ajkjk 3y ago
It's the standard playbook. By having the CEO leave it gives the impression that it was his decision and so the bad decision-making is gone and now the company can be trusted again. Of course it wasn't his decision; it was the whole board's, but it's convenient for them and their stock price to make it seem like it was his. No way to know, I suppose, if it was him + the board vs everyone, or him vs the board... but unless somebody leaks the details, I'd assume the board is just as culpable.
floor_ 3y ago
You're acting like the board had no say in the horrible decisions.
bdd8f1df777b 3y ago
You have a rosery view of the board. I on the hand believe that the it was the intention of the board to sell that ridiculous plan. The CEO was a scapegoat, or rather, he was going to leave anyway, so he took the blame in place of the others.
mym1990 3y ago
It doesn’t seem that wild for a board to be looking to increase revenue results/shareholder value, especially in current economic headwinds.
koromak 3y ago
If none of the board is industry, and none of the major shareholders are industry, why would they hire industry? Finance is becoming the only job that exists.
SpaceNoodled 3y ago
Who do you think made these decisions? The board still wants profits, and they're perfectly happy to let Riccitiello take the fall while they find another tool to take his place.

by cojo 3y ago

djmips 3y ago

I feel it's unfair to include Mattrick in here - he came up as a gamer, making games as a teen and rolling that into his own company so at least he has roots as a developer and I feel a dev/gamer connection but I respect your opinion.

cojo 3y ago
I think yours is a fair opinion as well, to be clear - I actually debated editing him out for a couple of minutes after I first posted, because I do know that his background was truly heavy on the gamedev side of things early in his career. I have my reasons for thinking things changed later on, but they are subjective / personal opinion based on personal experience, so I respect anyone who would disagree and exclude him from a list like this.

Willish42 3y ago

"doubling down" indeed... One possible interpretation of events is that he was ousted not for the initial proposal and backlash but precisely for how he backtracked after the fact -- perhaps the board gave a clear mandate and Riccitiello was unable to successfully change pricing structure to match financial expectations. That would explain the replacement. Things aren't looking great for Unity right now...

cojo 3y ago
Yeah, I think this could definitely be one explanation. Other commenters in the thread have also given good thoughts / potential scenarios in similar veins - essentially that this was actually a failure of messaging, sticking to the plan, and / or both, plus some other combination of "no, seriously, we need to make money and become profitable, nothing else matters as long as the boat still floats, make it happen and keep this ship going." And I do suspect that Whitehurst will likely be a better fit for that. A seasons gaming industry executive (regardless of investor / revenue focus) may actually be a negative if that's the goal right now... I'll be very interested to see how this all turns out.
strgcmc 3y ago
I think that's reading too much into, what is fundamentally a very normal and common way of dealing with CEO turnover -- appoint a safe, business-friendly steward of a CEO, while you stabilize the crisis and decide who the real long-term leader should be. The word "interim" was clearly used, and there's no hint in the PR statement about this being a permanent appointment. So I don't think it's reasonable to equate this to a clear doubling down of anything. At the same time, a guy like Whitehurst is a safe, relatively unimpeachable medium term choice, not like someone you'd use for a truly short interim 30-90 days while you execute an executive search quickly. If you need him for 1-2 years of just don't rock the boat leadership, it'll probably work out fine for the company and the board would be satisfied.
phire 3y ago
Boards don't micromanage to that level (or more, they shouldn't) There might have been an explicit mandate that Unity's pricing structure should be changed, but more likely it was just an explicit or implicit mandate that the Unity division should produce more revenue (or profit). The actual details of how to achieve that mandate would be left up to Riccitiello and his management team. My interoperation is that while the board probably agrees with the need to change Unity's pricing structure, Riccitiello is being ousted for the poor implementation with a proposal that generated so much backlash and then some pretty poor handling of that backlash.

ethbr1 3y ago

Right now, I'd imagine Unity is more concerned about placating their investors that the company isn't going to fall off a revenue cliff. Appointing a "developer-friendly" candidate would have caused more uncertainty. As a temporary pick, I'd guess Whitehurst is intended to message "We realize we screwed up, but there won't be any sudden changes." The reaffirmed guidance for current quarter is hilarious though, given any changes would play out in future time (e.g. developer flight for next project).

cojo 3y ago
Agreed - the reaffirmation of guidance almost felt to me like a "seriously guys, why are we down 22% up front, you know this doesn't impact short-term revenue..." which... definitely misses the point. It's interesting that after-hours / future trading doesn't seem to have responded positively (yet). Maybe that's just another symptom of lost trust as well.

airstrike 3y ago

Interim CEOs generally tend to be either a board member or a C-level executive that take on the role just to manage day-to-day CEO duties while the board searches for a more permanent replacement. In this particular instance, Whitehurst isn't a board member, but per the press release[0] he is a "Special Advisor at Silver Lake". Silver Lake is one of Unity's largest shareholders (~10%) and Egon Durban is on the board. EDIT: Also worth noting Silver Lake, along with Sequoia, committed an additional $1Bn into Unity at the time of the IronSource acquisition in the form of convertible notes with a conversion price of $48.89 / share[1], which is at a slight premium to the price at which Unity's stock traded then (7/15/2022) and at a meaningful discount to their current share price of $29.70 -- which supports the (admittedly speculative) argument that SLP's voice on that particular board is all the more prevalent today. —————————— [0]: https://www.businesswire.com/news/home/20231009494331/en/Unity-Announces-Leadership-Transition https://www.businesswire.com/news/home/20231009494331/en/Uni... [1]: https://investors.unity.com/news/news-details/2022/Unity-Announces-Merger-Agreement-with-ironSource/default.aspx https://investors.unity.com/news/news-details/2022/Unity-Ann...

cojo 3y ago
This is helpful context as well, in addition to doomlaser's explanation of his background re: IBM and Red Hat. Thanks for sharing it. I wonder to what extent Silver Lake drove this overall decision (vs. others on the board potentially initiating it)
Spoom 3y ago
Ah, Silver Lake, of Skype acquisition and zeroing-out employee equity fame. https://www.wired.com/2011/06/skype-silver-lake-evil/ https://www.wired.com/2011/06/skype-silver-lake-evil/
- hedora 3y ago
  I didn’t realize they screwed over some of the execs by zeroing out options. The night before the same transaction, they issued a pile of diluting shares to themselves, effectively clawing back something like 50% of the rank and file employees’ stock options. I might have the date and percentage wrong, but it doesn’t really matter. Silver Lake are total bastards and probably belong in jail. Avoid.

hn_throwaway_99 3y ago

Given the information posted about Whitehurst in another comment, https://news.ycombinator.com/item?id=37825689 https://news.ycombinator.com/item?id=37825689 , I strongly disagree with your assessment of him.

cojo 3y ago
I agree! I posted before that comment, which was definitely helpful - that context (and some other helpful replies here and elsewhere in the overall thread) have changed my assessment as well.

rat9988 3y ago

"interim replacement / transitional CEO is someone with a pedigree that, on the surface, seems even more management consulting / investor / revenue focused than Riccitiello was himself. To be clear, I know essentially nothing about James M. Whitehurst other than what is readily publicly available (IBM / Red Hat, advisory roles, etc.)." To me, it seems he has plenty experience with managing companies.

cojo 3y ago
I agree - this may be unclear phrasing on my part. What I meant in my original comment was, "wow, this seems like a hire that is only focused on finding someone with lots of experience managing, and not at all on the gaming industry / customer goodwill". So I think you're right - and I also think this shows how I misjudged how I originally thought a scenario like this would have played out.

jzb 3y ago

I was at Red Hat while Jim was CEO. He’s very culture focused and is an excellent choice for restoring faith there. He got great results while at Red Hat, but they plucked him out for a non-CEO role at IBM after the acquisition. IMO that has been IBMs greatest sin in its handling of Red Hat. Jim was active on memo-list and seemed to listen to people. That doesn’t mean he’s perfect, but I’d give him very high marks and I think that he had a lot of goodwill among Red Hatters as CEO.

linuxftw 3y ago
[flagged]
- NegativeK 3y ago
  > Everyone has Mac Books now. I don't even work there and I know that this is, at the least, hyperbole.
  - dralley 3y ago
    I do work there and it's total BS, certainly as far as engineering goes. Maybe in marketing / sales / HR the story is different, but the overwhelming majority of engineering, support and QE (including the management chain) use Thinkpads with Fedora or RHEL.
- KerrAvon 3y ago
  [flagged]
  - gorjusborg 3y ago
    What codewords would those be?
  - fyrn_ 3y ago
    GP doesn't exactly seem fun at parties, but calling them racist seems pretty extreme
  - 3y ago

jameshart 3y ago

I’d be careful drawing too many parallels between running Unity vs running a game publisher. Unity is a developer platform/tooling company. They don’t care about hits or franchises - they need service, stability, community, and technology innovation. Game publishers are creative industry plays, like movie studios. Completely different business. Of course Epic confuses things by being in both camps but I don’t think Unity is confused that they are competing with Epic in the sense of needing to outmatch Fortnite.

joecot 3y ago

I think back to Ellen Pao at reddit. Ellen was brought on as CEO, and was the face of a number of very unpopular decisions. All those decisions had one purpose -- jettison the things that made the site rough around the edges, and find ways to monetize, so they could make investors happy and work on going public. The backlash was staggering, and much of what they tried was rolled back. Ellen Pao took the blame for it, but it wasn't actually her fault. The founders just scapegoated her in order to make changes they needed for investors -- and depending on how cynical you are, they picked an asian woman so that they could channel internet racism and sexism as part of the distraction. Years later, they did the same thing, making multiple unpopular monetization changes, but this time the CEO taking the backlash is Steve Huffman himself, not a scapegoat put in front of him. CEOs don't make decisions on their own, not really. This pricing change was the direction the company wanted to go in, and they got put on their heels, but only temporarily. They're still going to try to find ways to aggressively monetize.

mvdtnz 3y ago
That is some incredible revisionist history.
- ribosometronome 3y ago
  Elaborate?
  - mvdtnz 3y ago
    What is there to say? The decisions that OP says were not hers, were hers. And the claim that they chose an Asian woman for the intended purpose of setting a racist mob against her is completely unfounded and frankly racist itself. Believe it or not, there are some Asian women out there that have qualities other than being the target of racism.
    - dralley 3y ago
      Most of the decisions Ellen Pao made, especially the banning of the FPH subreddit, was genuinely for the better. She bent over backwards, IMO, to avoid the hate - and should not have.

Waterluvian 3y ago

“with consequences” Depends how many millions he’s accepting to walk away.

rapfaria 3y ago

Isn't Riccitiello stepping down a standard operation procedure in a situation like this?

jmull 3y ago

I don't think you can really draw conclusions from an interim pick like this one. It's who they choose after the search that will tell you something. But things don't look good no matter who they choose. Unity has to become sustainable... that, or go out of business. Their fundamental problem is somehow getting revenue and costs in line with each other. Here are some general ways that could be done... * Squeeze a lot more money out of existing customers * Get a lot more paying customers * Cut spending on things that impact revenue a lot less than the cut saves The first one is what the last CEO tried with that cockamamie licensing scheme. You could go at it in other ways but in the end the impact on customers is the same so I don't think the reaction would be a lot better. Is there any clear way to accomplish the second, at least without an even larger negative impact on revenue? For investors, cutting cost is the least desirable -- they want to grow, not shrink. And customers also don't like to get less for the same price. But perhaps there is a way to cut costs that would spare what provides the core value to customers, and perhaps a business guy could get shareholders to accept that it is the only way.

Sakos 3y ago
I don't understand how their cash burn rate is so high that a billion in revenue isn't enough to stay in the black. What are they spending so much money on?
- ekianjo 3y ago
  Marketing and sales costs have increased tremendously
- timmytokyo 3y ago
  They've been on a hiring spree, with a ~50% annual growth rate for the past several years [1]. [1] https://stockanalysis.com/stocks/u/employees/ https://stockanalysis.com/stocks/u/employees/
ChuckMcM 3y ago
I concur with this, their interim CEO is the person who can do the needful things with respect to cutting executive pay, laying off people, and outright firing others. Once the organization has been pruned, the "real" new CEO comes on board and is given a shot at rebirth with a new point of view.

HillRat 3y ago

I'd argue that what Unity needs is someone who's got a background in enterprise software, because selling to game developers is very different than selling games. No one with (successful) executive experience in enterprise software would have signed off on Unity's original revenue plan, simply because the number one rule in enterprise is "don't fuck with the customer's business model," which the "pay per download" model certainly did. Hiring a game industry CEO who pioneered predatory monetization models and was responsible for horrifying managerial practices within and between studios was a terrible choice for Unity, and his evident contempt for developers showed through often. Whitehurst, on the other hand, has a history of strong execution across multiple industries, and built a reputation as someone who protected Red Hat's culture against attempts from within IBM to "Big Blueify" it (possibly to the detriment of his own role within IBM). Even as an interim, having him onboard is a good sign for how Unity is looking to repair its relationships with developers.

doctorpangloss 3y ago
> simply because the number one rule in enterprise is "don't fuck with the customer's business model," On the other hand, the continued growth of gaming revenues, for both developers and services providers, compared to all other creative industries, is all attributable to innovations in business models. I suppose if people rocked the boat as little as you suggest, the only software being sold to game developers would be Denuvo.
- InSteady 3y ago
  Something tells me there is a fair bit of wiggleroom on the line between "no innovation whatsoever" and "making a large number of my customers situation untenable." I think innovation will continue just fine. Disrupting a business model is not the same as selling software to people under terms that are obviously and immediately harmful. Unless you are really clever and they are really dumb, I guess.
- lolinder 3y ago
  You're making the exact mistake that OP warned against at the beginning: "selling to game developers is very different than selling games". Even game studios can't just change things willy nilly. If Baldur's Gate 3 had been a microtransaction-funded F2P game, it would have been a flop—their target player base doesn't like that business model and wouldn't have gone for it. It's better to try out a new model with a brand new franchise than to try to pivot an existing franchise. Enterprise software has these same constraints and more, because monkeying with the business model doesn't just mildly irritate prospective customers, it can and does throw off years of planning for thousands of people per company. They can't just shrug and decide to not invest in the next installment in your game franchise, they have to re-do their corporation's 5- and 10-year plans.

reactordev 3y ago

If anyone can save the stinking ship that is Unity, it’s Whitehurst. This is said by someone who wants nothing more than to see Unity die. Whitehurst was pretty instrumental in getting Red Hat sticky in places where it was just RHEL. Open Shift, Open Stack, etc all drove value-add for the business and for their customers. Cloud is fickle though so selling tools to studios and trying to compete with Unreal in the VFX space is how Unity moves forward. Take your lashings from the game devs. Shore up your presence in VFX, Movies, Film. Evolve. The tsunami has squarely landed on Godot’s doorstep. It will be up to them on how they manage the swell.

doctorpangloss 3y ago
While I don’t think you deserve to be downvoted for this, your comment is full of opinions that, as a game developer, sound 200% wrong to me. For the sake of curiosity… what are you talking about?
- reactordev 3y ago
  I’m talking about Jim Whitehurst taking Unity in a different path and leaving us game devs the f#^k alone. We’re done. Go sell to movie studios, VFX shops, Video Wall Warehouses, digital twin and construction. Sell enterprise software subscriptions. I think we both agree that small indie studios will not be returning no matter what promises are made, who is CEO, or what new shiny monetization idea they come up with next. I wish him the best of luck.
  - doctorpangloss 3y ago
    > I think we both agree that small indie studios will not be returning no matter what promises are made One thing I agree on: more often than not, behind an interesting piece of art lies an interesting personality. To advance the conversation based on some substantive facts, based on my conversations with creators of large free to play Unity games, all were already using IronSource and were not impacted by the changes anyway. As a game developer who publishes himself, I do not plan to migrate away from Unity, and I wasn't really impacted either. I can't speak for the 30 or so studios who posted pleas to revert the changes, but based on what happened, I believe they got what they wanted. So if their decision-making is rational / based on facts, I don't think they're migrating either. This is all to say that when you have no budget, so you value your time at zero and you have no visual art you didn't author yourself, it's easy to put 100% of the personality into the product, and make that The Thing. There are people I know who turned 20,000 followers on a TikTok about games into a $1m check for a game studio! This is a viable strategy, it is uniquely suited to people to have opinions about game engines. But my facts-informed opinion is that this isn't representative of most game developers, and that they are actually really happy with Unity and relieved that the pricing changes found a middle ground that is less emotionally charged.

hackerlight 3y ago

> board actually hold Riccitiello responsible It could also just be a PR move. Riccitiello is disliked among Unity customers, so you get goodwill by firing him.

beebmam 3y ago

Bring back engineer CEOs. I'm sick of this trash.

r00fus 3y ago
Unfortunately, in our economic system this is not allowed unless that engineer CEO happens to have incredible clout, financial control or both.
intelVISA 3y ago
Don't be silly, we're in the era where engineers are both smart enough to wrangle massive technical goals yet also need many layers of babysitting from their betters. You may know what a CRDT is, but (apparently) the Trello board is beyond you.

hintymad 3y ago

> was that one of the increasingly common "management consulting" / investor- & revenue-focused type of gaming executives My read of this debacle is that the Unity CEO did not pay attention to details. It's as if he had ever thought of how the policy would play out -- a signature move of a corner-office boss who simply delegates everything about product to his lieutenants. Or worse, to the lieutenants of lieutenants. This is in such contrast with those founder CEOs, who painstakingly think through product and policy changes.

ajkjk 3y ago

It's the standard playbook. By having the CEO leave it gives the impression that it was his decision and so the bad decision-making is gone and now the company can be trusted again. Of course it wasn't his decision; it was the whole board's, but it's convenient for them and their stock price to make it seem like it was his. No way to know, I suppose, if it was him + the board vs everyone, or him vs the board... but unless somebody leaks the details, I'd assume the board is just as culpable.

floor_ 3y ago

You're acting like the board had no say in the horrible decisions.

bdd8f1df777b 3y ago

You have a rosery view of the board. I on the hand believe that the it was the intention of the board to sell that ridiculous plan. The CEO was a scapegoat, or rather, he was going to leave anyway, so he took the blame in place of the others.

mym1990 3y ago

It doesn’t seem that wild for a board to be looking to increase revenue results/shareholder value, especially in current economic headwinds.

koromak 3y ago

If none of the board is industry, and none of the major shareholders are industry, why would they hire industry? Finance is becoming the only job that exists.

SpaceNoodled 3y ago

Who do you think made these decisions? The board still wants profits, and they're perfectly happy to let Riccitiello take the fall while they find another tool to take his place.