Following the release of Unity’s annual State of Gaming Report 2024 we caught up with Unity's chief product and technology officer, Marc Whitten, and Felix The, SVP of product and technology, Grow, to discuss the state of Unity and their plans for 2024 post-GDC.

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PocketGamer.biz: The Unity State of Gaming Report 2024 was a great piece of work for us because our readers are all about the artistry and science of making great games and then those games turning a profit and making good on an investment too. It was great to see both sides covered.

Marc Whitten: That’s awesome. I’m really glad to hear that. Gaming is so big and yet it remains so dynamic. There are trends and you can see those trends build year over year. I think listening and hearing from game developers and creators and what they're experiencing and encountering is always really fascinating.

Let’s wade straight in with the state of AI. From the report, AI is already being used by 62% of the surveyed studios. That’s a nice high figure this early on in the game, and that’s only going to get higher, right?

We really see this taking off. I think if you were to do a state industry ‘X’ report you would see pretty substantial AI usage in there. But I think that there's some really unique things around the gaming side. I think obviously on things like coding, more and more people are using some form of AI assistance, whether it's Unity Muse, or Copilot or, Chat GPT because it just helps navigate the complexity in a much faster way and allows you to level up and frankly be more productive.

But, you know, at the end of the day, in gaming especially, going off and trying to figure out how to make a fun game - finding that core loop of your game - is all around iteration. The more iterations that a game team can go through to find that loop, the better.

And I think on the content, coding or even some of the behaviour and other elements side, AI is one of those things that supercharges people to be able to iterate more and find the fun faster, which hopefully is a really positive thing in terms of quality of games and the success of those games.

I think one of the main things that people worry about is that video games have worked so hard at becoming an art form alongside music and film, and so for AI to come and take away that humanity that we've finally managed to inject into games… That’s a worry for some. Aren’t games all going to become the same if we hand them over to AI?

Yeah, I don't think that that's where we're headed. Now, I think there's obviously going to be be a pretty substantial amount of disruption that comes from AI and there’s a completely new, different set of tools that come from it, but I think one of the things it does is that it’s a tool and it's a tool that allows people to express creativity and try out different things in very different formats.

AI is a very broad thing. I think you're really talking about generative AI art. But one of the very exciting things in Muse is that when you get an error message for something in Unity and you click on it, it gives you helpful help and helps you get there. It’s all about helping you get where you're going faster.

But even on the content side, part of what AI can do is just be a tool for you to mould faster. So if you imagine, hey, I wanna go try to figure out how to block out a level so that I can try to develop the idea I have for the game. The more times you can do that the better, and, at the end of the day we think this is about having artists in control with more capabilities than they've ever had before. I think that will be a very valuable thing that will lead to more things.

The other place where I believe we will find some new elements of creativity is AI running at run time. Not just at the create time side. Suddenly you have this new thing that you can drop into the middle of a gameplay loop and have magical things happen. It's a superpower that you can add to the game.

So, for example, if you go back and think about a game like Scribblenauts where you can type whatever you want and something will happen. Well imagine putting that with an even more powerful set of AI technologies that can understand the intent of the player and creatively think about how you design new gameplay experiences with that. I think that will lead to new types of games that have never existed before.

And I think it will empower our creators to do ever more interesting things. But it is new and it’s the type of thing that you have to be willing to embrace and adopt and learn. It’s not something that the industry or individuals can ignore. It’s going to change your workflows and it's going to change how you think about game development.

What do you think the end game for AI and Unity is? Is the fantasy that eventually the end user might be able to just sit in front of whatever machine and say, “make this” and it'll make it? Is that it? The last time we spoke, we spoke about democratising game making and making it easier for anybody to make whatever it is they want.

I don't know that I see it as simple as that because I believe that you're going to continue to see this need to iterate and design. One of my favourite games of all time is Portal. Portal started as a student project here in Redmond and the Valve guys found it, brought the team along and they built a great game out of it.

And there's two things there. First there's this mechanic. A super interesting idea of a gun that shoots geometry, right? No-one had really thought about it. But then inside of that, there's an idea to make interesting progressive puzzles that also tell a story, right? And so both of those things come from the creativity of multiple people coming together to find something central and core.

So to come back to what you're saying, I think that opening up the tools so that I can describe my intent without having to know that in this particular language you have to have a semicolon here, or the computer only likes it when you talk to it in this way - that's a great thing.

We all learn this second language as programmers - to try to speak closer to the computer's language. In some ways AI is about computers speaking closer to human’s language. And that level of conversation, I think, can be a great thing.

But I don't think it goes down to there's this ‘gamemaker.com’ where you type in a sentence and you get a full game out of it. I think it's just another level of abstraction that allows us to build our visions using a set of tools. To your democratisation point, I was at Microsoft for a long time and obviously I've used Office and their apps and there's one button on all of those apps. The most important button. Which is format painter, right? Where you say, “I don't know what's going on over here, but can you make it match this thing?” It's the magic thing button that knows what I'm trying to do!

And to me that's how I think about some of these things. It's like here's what I'm trying to do, will you please just make it happen? Versus me having to know all of these intricacies about how you work. And that's what allows creative people to express their vision more directly. I think that can only be a positive thing.

Pocket Gamer Connects London 2024 played host to this discussion on how AI will shake up game development

Just to bring it from the creative side to the money side. One of the things I noticed in the report was in-app purchases are down and so smart ad implementation needs to be on the rise. Why do you think this is happening? Why have in-app purchases fallen out of favour and advertising is the new way forward?

Felix The: Generally, a lot of people in the world have smartphones these days and so smart phone sales are going down. And with smartphone sales going down the need for new high fidelity games that come with the upgrade of phones becomes a bit less pronounced. If you look at the top games they tend to be older games that have been around for a while but they're kind of the cool kids on the block. People still play and are still highly engaged but over a period of time as an expression of statistics, they drop more, and then they pay less as an aggregate because it's the same game.

Now what that means is that if that revenue stream starts to taper off a bit, it's in the developer's best interest to explore new ways of monetization. The advertising side is growing because data and data science is the gift of the 21st century. A lot of vendors in that space know how to price the transaction more accurately and with more and more vendors participating there's more competition.

The industry has shifted towards real time auction. So all combined, you have a crushing pricing pressure upwards for a seller that represents the buyer to win the auction. So that's the primary reason why in-app advertising is up. But in addition to the classical ad network there's alternative monetization strategies as well.

What if you can monetize your players through their purchases outside of the direct purchase inside the game? So that's where products like Offerwall come in. You want to buy Nike shoes? You want to buy something else outside? Why not get an in-game currency reward as part of it?

The other thing we also offer is this service called Daily Rewards. Essentially, it's a mechanic that rewards highly engaged players as they proceed and achieve certain milestones within a game. Those are different monetization mechanics that it's good for developers to consider as the IP sector is softening a bit.

And this is the Tapjoy product that's now part of Unity and makes it easier for putting these kinds of daily rewards within your game?

Correct. The main product is called Offerwall and Daily Rewards is a new release. We actually are going with general availability at GDC, which is exciting. The reason why Daily Rewards in particular is going to be even friendlier for game developers is that Offerwall tends to work well with hardcore games where your game economy is quite robust, right? But that means two things. Firstly, a player needs to reach level 50 before getting a reward, which is typically only possible for games that allow level 50 to begin with! So that basically locks out a good proportion of the market, especially on the casual side. Daily Rewards allow all game developers of all types and size and genre to participate because like you break the rewards into smaller chunks.

Secondly, from an end player perspective, you get that progression dopamine that people like in games, right? So you don't have to say there's a big windfall in a one time event at level 50. Instead you can have a level five check in… Level 10 check in. It's a wonderful thing for both the players as well as our game community because everybody can now participate in the product.

And for today's monetisation, the drive is all about maintaining that audience and keeping them playing?

Marc Whitten: The reality is that gaming is a very, very large and relatively mature market and it's hard to get your game discovered. It's probably too hard. I say that just because there's so many on any platform, like Unity. By the way, I think on average about 10,000 people start a new game on Unity every day. All of those don't make it to the end of course, but a lot of new games are released every month on mobile devices and it's expensive and hard to find a hit.

So if someone has discovered my game and I found a player that is really into the core concept of my game, it's really, really important for the long term health of your business to try to keep them because, frankly, it's a lot harder to get them to discover the next new game than stay with the one that they've already expressed that they like.

It's the reason why multi-platform is becoming so much more important. I need to have my game where my player wants to play because I don't wanna lose that opportunity to stay in a relationship with them. Indie games and creators are thinking a lot more about multi-platform. Mobile first titles are thinking a lot more about being on other devices. I really do believe it comes down to being where your players are and maintaining your engagement with them in any of the ways that you can, because the next hit is far from guaranteed.

The report mentions that multi-platform games are on the rise. And for me, that's always been one of the core parts of Unity.

When I think about the core of Unity, I really think about two things. The first is that unity has this extraordinary community of game creators. And so they can help you. They're just pushing on us and each other all the time on creation.

And the second is that we are essentially the dev kit for all the hardware that you might care about.
And therefore you can figure out your game and your players and try to make sure that you're gonna be able to be successful wherever they are.

I think we're going to see a really big uplift in web. It's almost like there's all the platforms… But then there's the web version on all of the platforms and your ability to think about instant games, maybe as a hook into your game or think about the web as a real platform with support being more ubiquitous and performing across devices.

Yeah, you can always also go to things like Apple Vision Pro like where game creators are obviously always looking for new possibilities. And yeah, it's obviously something we care deeply about and are really invested in. But I think it also plays to what's enduring about game games, which is, whatever platform exists the first thing that people generally try to figure out is how can I play games on it? And that’s amazing.

I'm interested to get your take on the survey showing an increase in the amount of time required to make it a title. Whether this is a good thing or a bad thing? The numbers were 218 days formally and now people are spending 304 days on average to make a game? I would have expected that number to come down rather than go up?

I think it comes back to the totality of these trends, things like the fact that games are becoming more multiplayer and live. So that's more complexity that you have to think about. But the other one is that there's just bar raising, you know? A change in what a great game looks like. It's always in your head - “What is my minimum product? My minimum lovable product?”

Well, the minimum lovable product from two years ago might not be minimum lovable now because the rest of the water level of gains all around you has gone up. And this definitely plays into things like AI and other ways that give an ability to iterate faster and drive more productivity. They’re going to be more and more important.

Just to talk about the business side of Unity. It's fair to say that it’s been a tough year. There have been things that have been rolled out that haven't gone according to plan. How do you feel the community is responding and how are you set for the year ahead?

You're right. It's been a tough year and we've been going through a bit of a reset to make sure that we're as focused as we possibly can be on the core of what matters for Unity and what matters for our game creators and making sure those are one and the same.

You actually said something at the very beginning of our talk. You said that your readers equally care about the creation of games and making them into successful businesses and that’s what we've been talking a lot about - Felix and I and the teams all around us. This idea of how do we do essentially three things:

How do we help more game creators make great games, how do we help them find and engage the players that are going to love their games? And ultimately, how do we help them build really successful businesses? Our reset was really about getting down to the fundamental core of the Unity engine, the Unity Cloud and our monetization services so that we can deliver that as effectively as possible.

At GDC we have hundreds of one on one and group meetings with our developers. Tons of technical talk tracks, obviously, some critical stuff. Felix talked about the Daily Rewards but there’s the preview of Unity Six and then the path to GA and our roadmap.

What our game developers want from us is to know what we're trying to accomplish, to help them to see that we're listening to the things that are causing them problems and to make sure that we're investing back into continuing to push forward there. And that for us is central to what we're focused on across the company.

But we're definitely trying to make a sustainable business and by being a great sustainable business, we're better able to invest in the things that move it forward. A vast majority of people will continue to use lots of Unity tools for free. And I think that's great because the community is the core of Unity.

Every time someone has this idea that they want to create a game, goes to Unity.com, downloads the Unity editor and starts working is awesome. But we're definitely a business and I think we need to be a stable business. I think it's an awesome business and we're gonna do great things but it's really about how do we make sure that we are helping elevate game creation and democratising access to those tools and ultimately helping people build great businesses.

And if we do a great job in that, I think, all those developers will continue to want to be on the journey with us.