Unity reconsidering ‘controversial’ Runtime fee policy, says Wedbush

Wedbush notes that Unity (U) posted an apology on X discussing that it plans on making changes to its “controversial” Runtime fee policy, with an update coming in “the next couple of days.” This follows an “extreme backlash” from the developer community that saw multiple studios switch off Unity Ads and ironSource SDKs in all of their titles and a few others pledge to switch game engines if the policy is implemented, the analyst noted. While Unity may decide to delay implementation for an unspecified time over the next couple of days in order to open up doors for communication with the developers, the firm continues to expect to see the Runtime fee implemented by January 1, 2024, “albeit with a considerable overhaul,” says the analyst, who keeps an Outperform rating and $55 price target on Unity shares. However, the firm expects AppLovin (APP) to “benefit from Unity’s rough week,” the analyst added.