Unity’s pricing change provides ‘clearer path’ to revenue growth, says BofA

BofA notes Unity has announced that it is cancelling the controversial Runtime fee and is instead raising subscription prices 8% on Unity Pro and 25% on Unity Enterprise effective January 1, 2025. Unity’s Runtime fee was met with broad disapproval from game developers who viewed the download and revenue-based pricing as opaque and potentially punitive to smaller game developers. Unity’s pricing change provides a clearer path to revenue growth, BofA argues. The company’s previously announced Runtime fee was expected to have a lagged effect as it was based on new game revenue thresholds and only applied to customers leveraging the latest version of Unity’s game development software. The firm estimates the price increase could add more than $20M to annualized revenue. BofA has a Buy rating on the shares with a price target of $37.