Unity’s new CEO pitches ‘fundamentally different company’ after rough year
Pavlo Gonchar | Lightrocket | Getty Images
Five months into his tenure as CEO of Unity Software, Matt Bromberg is overseeing his first big product launch as he tries to push the company past an extended stretch of challenges.
On Friday, the video game software company announced the sixth version of its flagship product, Unity Engine, a set of tools developers can use to produce games across a number of devices, including iPhones and Android phones.
Unity 6 is emphasizing stability, predictable updates and the ability to support hundreds of players in the same virtual world at the same time, Bromberg told CNBC. The company is seeking to rebound from a dark period that’s included layoffs, significant losses, a troubled relationship with many customers and a shakeup at the top.
“With the release of Unity 6, we’re interested in reconnecting with customers and help them understand that it’s our commitment to deliver what matters to them, and that we’re going to be a fundamentally different company in that regard,” Bromberg said.
Bromberg, a veteran of the gaming industry, was appointed CEO on May 1. He previously spent almost six years as COO of mobile game company Zynga, which was acquired by Take-Two Interactive in 2022, and more than four years at Electronic Arts.
Bromberg’s predecessor, John Riccitiello, announced his retirement last October following a controversial pricing change that frustrated numerous developers. James Whitehurst, former CEO of Red Hat, was serving as interim CEO until Bromberg joined.
The new CEO’s first big challenge was unwinding Riccitiello’s decision to implement what became known as the “Unity Runtime Fee.”
Unity Software ex-CEO John Riccitiello speaks onstage during TechCrunch Disrupt SF 2018 in San Francisco on Sept. 5, 2018.
Steve Jennings | TechCrunch | Getty Images
Traditionally, Unity sold its software by the seat, so companies paid an annual fee per user for the engine. In September of last year, the company said customers would have to start paying a flat fee any time an app or game using Unity was downloaded. Game developers rebelled and threatened to find alternative game engines.
Last month, Unity scrapped its runtime fee. Unity Engine 6 will cost about $2,200 per user per year for companies with revenue of more than $200,000. Negotiable pricing will be available for the largest customers. Unity says it will raise its prices on a predictable annual schedule.
“We’re saying to our customers, hey, this is something you can build your multi-billion dollar game business on,” Bromberg said.
Unity is used to build the majority of mobile games, including Monopoly Go, which has grossed an estimated $3 billion, according to one estimate.
Slumping stock price, steady market share
Unity’s problems go beyond the shifting business model. The stock is down 23% over the past year and has lost 90% of its value since peaking in November 2021, which was a little over a year after the company’s IPO.
For the second quarter, Unity reported a net loss of over $125 million. In January, the company said it was cutting about a quarter of its workforce, or roughly 1,800 jobs, in order to improve long-term profitability.
Even after a tumultuous stretch, the company has maintained its strength with game developers. Morgan Stanley analysts wrote in September that Unity’s game engine still has 70% of the mobile market, proving “how deep its moats truly are, as competitors have been unable to gain share at Unity’s expense.”
Bromberg told CNBC that Unity is staying away from the generative artificial intelligence hype. Game developers tend to be skeptical of generative AI, as many say it rips off work from other artists and represents lower-cost competition.
“We’re less excited about making investments in generative AI,” Bromberg said. Instead, Unity will support using AI-created artwork and character designs, and will use AI behind the scenes to speed up the release of a game.
Another area of focus for Bromberg has been simplifying the company’s push into the enterprise. In previous years, Unity has said that its game engine can be used for all kinds of 3D simulations, including “digital twins,” a buzzword that describes creating a full digital simulation of a complicated operation, such as a factory.
Now it’s more about games, which can include plenty of 3D elements.
“Our strategy going forward is going to be to be focused a little bit more narrowly on the organic uses of our engine in industry,” Bromberg said. “That comes down to 3D visualization.”
Bromberg said he remains optimistic about virtual reality and augmented reality, including Apple’s Vision Pro headset, which is supported by Unity 6.
“The real strength of Unity is we take really big, immersive experiences that are created in our engine, and then you can distribute them on any device, no matter how light it is — the world’s worst phone, a set of glasses, a headset,” Bromberg said.
WATCH: Unity is a ‘mess’
Technology
As nations build ‘sovereign AI,’ open-source models and cloud computing can help, experts say
Digital illustration of a glowing world map with “AI” text across multiple continents, representing the global presence and integration of artificial intelligence.
Fotograzia | Moment | Getty Images
As artificial intelligence becomes more democratized, it is important for emerging economies to build their own “sovereign AI,” panelists told CNBC’s East Tech West conference in Bangkok, Thailand, on Friday.
In general, sovereign AI refers to a nation’s ability to control its own AI technologies, data and related infrastructure, ensuring strategic autonomy while meeting its unique priorities and security needs.
However, this sovereignty has been lacking, according to panelist Kasima Tharnpipitchai, head of AI strategy at SCB 10X, the technology investment arm of Thailand-based SCBX Group. He noted that many of the world’s most prominent large language models, operated by companies such as Anthropic and OpenAI, are based on the English language.
“The way you think, the way you interact with the world, the way you are when you speak another language can be very different,” Tharnpipitchai said.
It is, therefore, important for countries to take ownership of their AI systems, developing technology for specific languages, cultures, and countries, rather than just translating over English-based models.
Panelists agreed that the digitally savvy ASEAN region, with a total population of nearly 700 million people, is particularly well positioned to build its sovereign AI. People under the age of 35 make up around 61% of the population, and about 125,000 new users gain access to the internet daily.
Given this context, Jeff Johnson, managing director of ASEAN at Amazon Web Services, said, “I think it’s really important, and we’re really focused on how we can really democratize access to cloud and AI.”
Open-source models
According to panelists, one key way that countries can build up their sovereign AI environments is through the use of open-source AI models.
“There is plenty of amazing talent here in Southeast Asia and in Thailand, especially. To have that captured in a way that isn’t publicly accessible or ecosystem developing would feel like a shame,” said SCB 10X’s Tharnpipitchai.
Doing open-source is a way to create a “collective energy” to help Thailand better compete in AI and push sovereignty in a way that is beneficial for the entire country, he added.
Open-source generally refers to software in which the source code is made freely available, allowing anyone to view, modify and redistribute it. LLM players, such as China’s DeepSeek and Meta’s Llama, advertise their models as open-source, albeit with some restrictions.
The emergence of more open-source models offers companies and governments more options compared to relying on a few closed models, according to Cecily Ng, vice president and general manager of ASEAN & Greater China at software vendor Databricks.
AI experts have previously told CNBC that open-source AI has helped China boost AI adoption, better develop its AI ecosystem and compete with the U.S.
Access to computing
Prem Pavan, vice president and general manager of Southeast Asia and Korea at Red Hat, said that the localization of AI had been focused on language until recently. Having sovereign access to AI models powered by local hardware and computing is more important today, he added.
Panelists said that for emerging countries like Thailand, AI localization can be offered by cloud computing companies with domestic operations. These include global hyperscalers such as AWS, Microsoft Azure and Tencent Cloud, and sovereign players like AIS Cloud and True IDC.
“We’re here in Thailand and across Southeast Asia to support all industries, all businesses of all shapes and sizes, from the smallest startup to the largest enterprise,” said AWS’s Johnson.
He added that the economic model of the company’s cloud services makes it easy to “pay for what you use,” thus lowering the barriers to entry and making it very easy to build models and applications.
In April, the U.N. Trade and Development Agency said in a report that AI was projected to reach $4.8 trillion in market value by 2033. However, it warned that the technology’s benefits remain highly concentrated, with nations at risk of lagging behind.
Among UNCTAD’s recommendations to the international community for driving inclusive growth was shared AI infrastructure, the use of open-source AI models and initiatives to share AI knowledge and resources.
Technology
Amazon CEO Jassy says AI will lead to ‘fewer people doing some of the jobs’ that get automated
Amazon CEO Andy Jassy said the rapid rollout of generative artificial intelligence means the company will one day require fewer employees to do some of the work that computers can handle.
“Like with every technical transformation, there will be fewer people doing some of the jobs that the technology actually starts to automate,” Jassy told CNBC’s Jim Cramer in an interview on Monday. “But there’s going to be other jobs.”
Even as AI eliminates the need for some roles, Amazon will continue to hire more employees in AI, robotics and elsewhere, Jassy said.
Earlier this month, Jassy admitted that he expects the company’s workforce to decline in the next few years as Amazon embraces generative AI and AI-powered software agents. He told staffers in a memo that it will be “hard to know exactly where this nets out over time” but that the corporate workforce will shrink as Amazon wrings more efficiencies out of the technology.
It’s a message that’s making its way across the tech sector. Salesforce CEO Marc Benioff last week claimed AI is doing 30% to 50% of the work at his software vendor. Other companies such as Shopify and Microsoft have urged employees to adopt the technology in their daily work. The CEO of Klarna said in May that the online lender has managed to shrink its headcount by about 40%, in part due to investments in AI and natural attrition in its workforce.
Jassy said on Monday that AI will free employees from “rote work” and “make all our jobs more interesting,” while enabling staffers to invent better services more quickly than before.
Amazon and other tech companies have also been shrinking their workforces through rolling layoffs over the past several years. Amazon has cut more than 27,000 jobs since the start of 2022, and it’s announced smaller, more targeted layoffs in its retail and devices units in recent months.
Amazon shares are flat so far this year, underperforming the Nasdaq, which has gained 5.5%. The stock is about 10% below its record reached in February, while fellow megacaps Meta, Microsoft and Nvidia are all trading at or very near record highs.
WATCH: Jassy says robots that will eventually do delivery and transportation
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