Epic Games competitor Unity Software files for IPO as Fortnite feud heats up
Game developer's fight with Apple could boost rival as it prepares to go public
A new player has entered the arena prepared to take advantage of the smoldering feud between Apple and Epic Games.
On the heels of Epic's decision last week to offer a direct payment system for its popular game Fortnite that would skirt a 30% commission fee to the tech giant's App Store, comes a bold move by Unity Software. The rival video game developer is moving forward with its plans to go public, according to a Securities and Exchange Commission filing on Monday.
Unity claims it is "the world's leading platform for creating and operating, interactive real-time 3D content," boasting that in 2019 it made more than half of the top games on mobile, PC, and consoles — including 53% of the top 1,000 games in the iOS App Store and Google Play, with three billion downloads per month.
In its filing, Unity boasted a global reach of more than two billion monthly active users, with more than 8,000 games and applications developed on the platform so far this year.
All those numbers could add up to one big challenge for Epic. The company's controversy with Apple could stall Epic’s Unreal Engine. That could prove advantageous to Unity’s rival engine.
APPLE SLAMS 'FORTNITE' MAKER EPIC GAMES FOR 'SHOPLIFTING' FROM APP STORE
Unity's revenue primarily comes from helping companies – including Intel, Google, Microsoft, Nintendo, Electronic Arts, Samsung, Sony, Ubisoft, Tencent, Take-Two Interactive and Zynga – monetize their content through advertising and other forms.
|EA||ELECTRONIC ARTS INC.||119.10||-0.09||-0.08%|
|TCEHY||TENCENT HOLDINGS LTD.||49.92||+0.63||+1.28%|
|TTWO||TAKE-TWO INTERACTIVE SOFTWARE INC.||116.59||-0.08||-0.07%|
Unity said 74% of its total revenue is made up of 716 customers with over $100,000 in revenue. Still, to attract investors for its public offering it may have to do better, as the company has never turned a profit.
Last year, Unity reported a $163.2 million net loss on revenue of $541.8 million -- widening the loss in 2018 of $131.6 million.
The company's filing also noted potential business conditions that could impact Unity such as "adverse changes in economic and political policies relating to China." In addition, decisions by Apple or Google to "change their technical requirements or policies in a manner that adversely impacts the way in which we or our customers collect, use and share data from end-user devices."
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Recently, Microsoft's general manager of gaming developer experiences, Kevin Gammill, declared that if Apple follows through on its threats against Epic, game developers would likely be forced to seek an alternative.
"For game creators in the later stages of development utilizing Unreal Engine and targeting the iOS and/or macOS platform, Unreal Engine’s sudden loss of support for iOS and macOS would create significant costs and difficult decisions," Gammill said in a statement. "The creator would have significant sunk costs and lost time using Unreal Engine for game creation, and would have to choose between (a) starting development all over with a new game engine, (b) abandoning the iOS and macOS platforms, or (c) ceasing development entirely."
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Unity Software, founded in 2004, is led by John Riccitiello, who previously served as CEO of Electronic Arts and has a workforce of more than 3,300 full-time employees.
The company, which has been valued at around $6 billion, according to Pitchbook, plans to file on the New York Stock Exchange under the symbol "U."