Interview

John Riccitiello: devs who shun monetisation are "pure, brilliant" and "fucking idiots"

Unity's John Riccitiello and Marc Whitten discuss the merger with ironSource, demystifying monetisation and feedback, and bullishness towards the mobile market

John Riccitiello: devs who shun monetisation are "pure, brilliant" and "fucking idiots"

The announcement of Unity and ironSource's upcoming merger was a considerable surprise to many, but to hear Unity Technologies CEO John Riccitiello and senior vice president and general manager of Unity Create, Marc Whitten, the partnership is the latest move in an industry that skyrocketed during the COVID pandemic and will continue to flourish.

It's also indicative of Unity's confidence towards mobile. Riccitiello and Whitten spoke with PocketGamer.biz on how the merger came to be, the firm's bullishness towards the future of the industry in spite of the looming recession, and why developers can no longer turn their noses at monetisation and feedback.

PocketGamer.biz: How long have Unity and ironSource been discussing options for a merger?

John Riccitiello: Not all that long – we’ve known them for years, but our relationship with them is new, so we didn’t get into conversations about mergers until all that long ago. The upcoming S4 filling will actually include a chronology of the conversations that took place.

Much like the rest of the games industry, Unity has embarked on some recent high-level acquisitions, such as Weta Digital, but this is specifically a merger.

Riccitiello: ironSource became a part of us because they believe so strongly in the company and wanted to be a part of it. This isn’t like the Weta situation where Peter Jackson thought, ‘here’s my company, I’m selling it on, I’m taking money away’.

The challenge is no longer do I have an interesting idea and more do I have an idea that can rise above the noise and find the right customers and players
Marc Whitten

The announcement is centred around transforming Unity into a combined growth engine, with features such as embedding monetisation indicators. What kind of developer feedback have you received that led to this direction?

Marc Whitten: It comes down to a couple of key aspects: the first is the massive success of game creation in general, particularly in mobile. The second is the sheer quantity of mobile releases every month, in the tens of thousands.

From the game creator perspective, the challenge is no longer do I have an interesting idea and more do I have an idea that can rise above the noise and find the right customers and players. We’re really excited about creating a live engine – something that can provide critical feedback as early in the creation process as possible, and starting that conversation with potential users at that point.

Implementing monetisation earlier in the process and conversation is certainly an angle that has seen pushback from some developers.

Riccitiello: Ferrari and some of the other high-end car manufacturers still use clay and carving knives. 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.

I’ve been in the gaming industry longer than most anybody – getting to the grey hair and all that. It used to be the case that developers would throw their game over the wall to the publicist and sales force with literally no interaction beforehand. That model is baked into the philosophy of a lot of artforms and medium, and it’s one I am deeply respectful of; I know their dedication and care.

But this industry divides people between those who still hold to that philosophy and those who massively embrace how to figure out what makes a successful product. And I don’t know a successful artist anywhere that doesn’t care about what their player thinks. This is where this cycle of feedback comes back, and they can choose to ignore it. But to choose to not know it at all is not a great call.

I’ve seen great games fail because they tuned their compulsion loop to two minutes when it should have been an hour. Sometimes, you wouldn’t even notice the product difference between a massive success and tremendous fail, but for this tuning and what it does to the attrition rate. There isn’t a developer on the planet that wouldn’t want that knowledge.

[Creatives are] the most beautiful and pure, brilliant people. They’re also some of the biggest fucking idiots.
John Riccitiello

Whitten: To double down on John’s point, Unity has democratised creation. Nowadays, if I were to tell you the next breakaway title is going to be made by two guys sitting in a flat in the Philippines, you wouldn’t blink twice. There is a beauty in tools that let people find out that this is how they want to make their livelihood, and our responsibility is to continue that democratisation.

Looking at ironSource, they came with the same ideas. Making feedback and publishing more transparent, as opposed to locked in a black box of marketing people. Now creators can look at minute information about monetisation and feedback in the same way they would look at load times or where they need to optimise their C# code.

ironSource was reportedly valued at 74 per cent premium to its current value. How did you reach that valuation?

Riccitiello: The way to look at it is, 11 months ago they were an $11 billion company. That's less than a year ago, and M&A premiums are really different in a high market versus a low one. From our perspective, it’s a great deal, and I would say at a time when the market is really depressed, we made a bold move that is going to create a far more successful company.

M&A often precedes staffing changes, and I understand Unity recently announced layoffs of roughly four per cent of its global staff.

Riccitiello: Just for clarity’s sake, we didn’t announce anything. That was a leak to Kotaku, and while we said we were eliminating four per cent of our positions, over half of them got rehired within other parts of Unity, so as far as quote-unquote layoff stories go, we’re not much of one.

Are you anticipating any further staffing changes, in light of the merger?

Riccitiello: Not in light of the merger. If anything, I would say that we’re both lean, reasonably weighted companies. They will likely be fewer additions, but we’re looking at our synergies that will help grow the business a lot faster.

I understand Tomer Bar-Zeev (co-founder and CEO of ironSource) will be joining the board, but will there be any changes to the c-suite?

Riccitiello: Tomer is joining my direct team, but there’s nothing else I can think of.

Just one last question: we saw tremendous confidence coming out of the pandemic, and it has given way to an immediate, pre-recession defensiveness. What are your expectations for the months ahead?

Riccitiello: One thing I always find interesting is, anytime there is talk about the stock market and the future of recession, the one growth industry becomes pundits. People with something to say and not a lot of knowledge about what they’re talking about.

My personal view is gaming will double as an industry in the course of the next five, maybe seven years.
John Riccitiello

So, let me give you just a couple of things I do know about. Firstly, gaming has been a rapid growth industry. For over 30 years, it was smaller than music, television, film; every form of media. And every year, inch by inch, the games industry grew past all of them by all metrics: the number of people engaged, amount of time invested, dollars spent. It’s a stellar, meteoric rise but it didn’t happen in a straight line.

Secondly, the level of engagement during COVID was staggering, and not just gaming. A lot of industries have returned to pre-COVID levels. But this industry stepped up dramatically, and now, I would say we made three years’ progress in two, rather than four in two.

So, if the games industry can survive every recession, while gaining on every other form of media, for 30 years, it can take COVID like a relatively modest speed bump.

My personal view is gaming will double as an industry in the course of the next five, maybe seven years. That’s not a hard prediction to make because it’s the trendline we’ve been on. But I could not be more bullish on this industry, and the number one form of gaming is mobile. And when you’re in mobile, you’re driven by in-game advertising. With this merger, we had the opportunity to do something really special.


Editor

Former editor of PocketGamer.biz, Khai can also be found on Vice, Star Trek, and in numerous scientific journals and publications.