If you click on a link and make a purchase we may receive a small commission. Read our editorial policy.

Unity's $4.4bn malware mistake? | This Week In Business

The engine provider is trying to grow beyond games, but its latest deal may have alienated swathes of its longest-running customer base

Developers are not overly happy with Unity this week.

The reason? Wednesday's announcement that the company is merging with IronSource, a provider of software and tools designed to help developers with monetisation, user acquisition, retention and all those other -tion words that are essential to thriving in the mobile games market.

STAT | $4.4 billion -- Approximate value of the all-stock deal, a 74% premium over the 30-day average ratio of IronSource's stock

Unity positioned the deal as yet another M&A deal to help developers that already use its engine and other services, following its purchase of Weta Digital, Parsec, SyncSketch and Ziva Dynamics.

QUOTE | "If you don't know IronSource, they bring a proven record of helping creators focus on what creators do best -- bringing great apps and user experiences to life - while enabling business expansion in the app economy" - Unity introducing its newest acquisition.

Of course, if you follow enough Unity developers on social media, chances are that's not the "proven record" you've been reading about this week.

The issue centres primarily around InstallCore, IronSource's first product. Released in 2010, this was a program that served as an installer for internet-based applications. It was classified by several companies as malware, and has since been discontinued (but, as seasoned PR Cary Kwok told us this week, it can take years to repair a brand's publication. The frustration from developers against IronSource proves this).

[Update: It's worth adding that Unity has since sent a statement to GamesIndustry.biz, saying that malware made available through InstallCore was the result of "bad actors" and was restricted to a desktop business that was "spun off several years ago"]

QUOTE | "... a family of bundles that installs more than one application on the user's computer, usually by combining a popular title with one or more adware programs" - Malwarebytes' description of InstallCore. The company's titular anti-malware software automatically quarantines it as a Potentially Unwanted Program (PUP)

QUOTE | "This application was stopped from running on your network because it has a poor reputation" - The beginning of Microsoft's own description of InstallCore, which it also automatically blocks on Windows

While IronSource is a legitimate business used by a wealth of companies, some developers still don't believe that's a good fit for Unity

A 2015 Tom's Guide article on the software even reveals that the Mac version of InstallCore first checked for any antivirus programs already installed. If it detected them, the software stoped its own installation. If it didn't, it installed up to ten different unwanted programs -- "including system optimizers, security software, media players and browser hijackers" -- from the internet. Most of these were legal, but none of which were asked for.

IronSource, it turns out, is seen by many as an enabler, if not provider, of malware. While the company is a legitimate business used by a wealth of companies, some developers still don't believe that's a good fit for Unity.

QUOTE | "You'd think really all Unity needs to do to keep its goodwill in games is continue to improve the engine and not get involved with comically evil-villain level shit" - Prominent indie developer and consultant Rami Ismail summing up the backlash

QUOTE | "Man, fuck Unity" - Celeste developer Maddy Thorson summing it up even more succinctly

QUOTE | "Unity recognises that, as a publicly traded company, stock price is driven by growth. To grow, they acquire a company best known for its malware delivery system. Good for stock price vs bad for users = just do it!" - the Twitter take of Bill Roper, a former Cryptic Studios and Blizzard exec

I include Bill's comments because, while shareholder sentiment does not always match that of developers or other industry professionals (let's not forget Activision Blizzard's share price was more impacted by the Overwatch 2 and Diablo 4 delays than any of the multiple lawsuits and exposés it faced last year), in this case the mood against Unity seems to be pretty similar.

STAT | $39.76 - Share price of Unity prior to the announcement

STAT | $33.93 - Share price shortly after. At the time of writing, it has not risen higher than $34.40 since

STAT | $201.21 - Unity's share price on November 18, 2021. Just to give you an idea of how rough a year it's having.

The problem is not only IronSource's past, but what it says about the future direction Unity appears to be going in while encouraging developers to follow.

QUOTE | "What if that process was no longer 'first create; then monetise?'"- A phrase from Unity's blog post about the deal, parroted by some baffled and/or outraged developers on Twitter.

The notion here isn't entirely flawed. Live service games dominate the market, especially on mobile, and the need to understand how you're going to keep funding your game beyond launch is crucial to success on the highly competitive app stores.

But the way it comes across, certainly to many a developer this week, is that prioritising monetisation over creativity is the only way forward -- a message somewhat compounded by Riccitiello calling developers that shun monetisation, or at least early monetisation discussions, "fucking idiots."

It would be unfair to quote that without more context, so here we go:

QUOTE | "It's a very small portion of the gaming industry that works that way, and some of these people are my favourite people in the world to fight with - they're the most beautiful and pure, brilliant people. They're also some of the biggest fucking idiots." - Riccitiello saying that developers who push back against the notion of discussing monetisation early on in the design process are, in no uncertain terms, wrong

You can see what he's saying, or rather what he thinks he's saying -- "I respect that people have a different way of doing things... but they're stupid." But there's definitely a better way to phrase it.

Installcore was discontinued after being classified as malware

Unity is in an increasingly precarious position. Having gone public last year, it's trying to branch into other industries as the world continues to realise the many ways video games technology -- particularly real-time 3D rendering -- can be utilised in different businesses. When we spoke to Unity last year, the company even said it aimed to be "industry-agnostic" -- hence the acquisition of companies like Weta.

The problem is Unity is still seen by many as a game engine provider. To them, it's the indie-friendly choice for video games development, the engine you cut your teeth on as you prototype quirky new ideas that might become the next cult hit, and an especially useful engine if you're developing for mobile. And few companies can survive a dramatic transformation if they alienate their core audience.

Yes, many -- perhaps most -- of its clients need to run a successful business and achieve maximum revenues. But the anger over IronSource's past incident with malware and criticising developers who don't throw themselves wholehearted into squeezing purchases out of their players -- especially, as we established last week, it's only a fraction of the audience that will spend enough to keep you going -- is another dent in Unity's developer-friendly reputation.

The rest of the week in review

STAT | $26.3 billion - US spending on video games products in the first half of 2022, down 10% year-on-year according to NPD

STAT | £41.2 billion - Global spending on mobile games in the first half of 2022, down 6.6% year-on-year according to Sensor Tower

QUOTE | "Mark Cerny is kind of like a rockstar, too, so being able to collaborate with him is really exciting" - Jade Raymond talks to us about Haven Studios officially being part of PlayStation, and how its cloud development model is already inspiring the platform holder's other teams

QUOTE | "It's not that one is a detriment to the other, this is more of a rising tide, and it's a really good place to be in to offer all these different opportunities" - Xbox's Pav Bhardwaj talks to us about the company's ongoing push into cloud gaming, this time via a partnership with the Samsung Gaming Hub

QUOTE | "Upon closing of the acquisition, the company name Dynamo Pictures is expected to be changed to Nintendo Pictures Co. Ltd to focus on the development of visual content utilising Nintendo IP" - Perhaps fueled by high hopes for Chris Pratt and co, Nintendo is investing more in animation

STAT | 17 - Number of UK games companies named Best Places To Work in our 2022 awards earlier this week

QUOTE | "When we started developing Cities: Skylines back in 2013, I thought that selling 300,000 copies would be a fantastic result" - Colossal Order CEO Mariina Hallikainen talks to us about the success of her studio's flagship game. So far it as sold more than 12 million copies, half of which were shifted in just the last three years

STAT | $?? - How much Nordisk Games spent on acquiring The Quarry developer Supermassive Games, its third wholly-owned studio

QUOTE | "There will always be a new collectible to earn, an ultra rare collectible to strive for, or something surprising to collect just for fun" - Sony on the new 'digital collectibles' players can earn as part of the PlayStation Stars loyalty program launching later this year

QUOTE | "It's definitely not NFTs. Definitely not. You can't trade them or sell them. It is not leveraging any blockchain technologies and definitely not NFTs" - PlayStation's Grace Chen assuring The Washington Post that the fears we all definitely had from that last quote are unfounded

QUOTE | "We do not tolerate such libel and will consider taking legal action in some cases" - Kojima Productions' response after Hideo Kojima was falsely identified by news outlets and politicians as the assassin behind the shooting of a former Japanese prime minister

QUOTE | "We are committed to the long-term work needed to address the issues raised" - Bungie's response to an employee calling for trans-inclusive healthcare after repeatedly being denied gender-affirming surgery by the studio's health insurance provider

QUOTE | "We offer our sincerest apologies to everyone involved for any complications or concerns caused by this incident" - Bandai Namco after confirming its internal servers had been hacked

QUOTE | "Since its debut, the game has quickly built a loyal following, and it aligns with our plans to deepen interactivity across the Spotify ecosystem" - Spotify's global head of music Jeremy Erlich on the company's purchase of Wordle-but-with-music Heardle for an undisclosed sound

STAT | $163,000 - Fine issued against a Chinese tech company for publishing without a license from the nation's increasingly strict regulators

QUOTE | "The laws around your company hiring overseas aren't always straightforward. Some studios engage with overseas workers as freelancers, but this can be problematic -- especially where the individual is a de facto employee" - Writing for GamesIndustry.biz Academy, experts from Lewis Silkin highlight legal pitfalls and tips for recruiting talent abroad

STAT | 1.5 billion - Number of tweets about video games in the first half of 2022

STAT | Considerably less than 1.5 billion - Number of tweets about video games that were vaguely constructive and/or respectful

Author

James Batchelor avatar

James Batchelor

Editor-in-Chief

James Batchelor has been a journalist in the games industry since 2006, joining GamesIndustry in 2016, and also runs Non-Violent Game of the Day (@NVGOTD). He does play violent games, but always on Story/Easy mode.

Comments

More Features

Latest Articles