Unity pricing changes ‘step in the right direction,’ says Barclays

Barclays says the new pricing change announced on Friday is a “step in the right direction” for Unity as it protects developers on a number of fronts, including a cap for the runtime fee at 2.5% of revenue. Applying the cap to a prior bottom up analysis, this reduces the firm’s estimated annual runtime fee by 27% to $192M. The analyst believes the changes rolled out on Friday were necessary as the first step to re-gain the trust of its developers while still maintaining most of the economic benefit from the runtime fee, which the firm believes still positions Unity well to reach its $1B EBITDA run-rate target by Q4 of 2024. Barclays keeps an Equal Weight rating on the shares with a $42 price target.