Shortly: Unity Software closed its offices in Austin, Texas and San Francisco on Thursday after the company received what it called a “credible death threat.” The closure comes amid controversy surrounding the recent announcement of charging a fee for games created using the Unity game engine and suspicions of insider trading shortly before the news was made public.
Bloomberg notes that the company has done this planned A town hall meeting was scheduled to be held today to address concerns about the new fee, but the hearing was canceled along with the office closure. The company is cooperating with law enforcement and it is believed the offices will be closed for the day only for security reasons. However, it was not specified if and when the town hall would be rescheduled.
The controversy began on Tuesday when Unity told developers they had to start doing it pay $0.20 per install once the game reaches 200,000 downloads and earns $200,000. Optionally, developers could pay $2,000 per year for the Unity Pro plan, giving them a higher threshold and therefore lower fee percentages. The so-called “Term Fee Policy” comes into effect in January 2024.
We want to acknowledge the confusion and frustration we heard after we announced our new term fee policy. We would like to address some of your top questions and concerns:
Who is affected by this price increase: The price increase is very targeted. In fact, more than 90% of our…
– Unity (@unity) September 13, 2023
The announcement immediately excited developers, who began using X (formerly Twitter) en masse Vocal problems. Unity tried to quell the backlash with a lengthy tweet that said developers were simply “confused and frustrated” by the new policy and that 90 percent of Unity customers weren’t even affected by it. It was reiterated that the fee only applies once a game reaches 200,000 installs And $200,000.
Massive Monster advised players to get Cult of the Lamb before the end of the year, as the new fee will see the game withdrawn from stores on January 1st.
– Cult of the Lamb ï¿½’… ðÂÂÂ (@cultofthelamb) September 12, 2023
Many other developers have called on Unity to reverse or change the policy so that the use tax does not burden smaller developers. Many operate on very thin margins and lose two percent or more of their sales.
– AGGRO CRAB (@AggroCrabGames) September 12, 2023
While the new policy is enough to keep the community on tenterhooks for weeks, suggestions of insider trading have fanned the flames. On Wednesday, it was revealed that Unity CEO John Riccitiello was among several executives and board members who dumped Unity shares in the weeks leading up to the term fee announcement.
According to Guru Focus, Riccitiello sold 2,000 Unity shares on September 6th. That’s not much for typical deals, but it led to further scrutiny of his stock activities revealed He has sold over 50,610 company shares in the last year, totaling around $2 million.
In addition, several other executives and board members are said to have sold large portions of their shares shortly before the announcement. Last year there were 49 insider sales and no insider purchases. Unity Growth President Tomer Bar-Zeev sold 37,500 shares for $1.4 million on Sept. 1, and board director Shlomo Dovrat sold 68,454 shares for about $2.6 million on Aug. 30.
The SEC has not filed charges or investigated at this time because legitimate insider trading continues to occur for a variety of reasons. For example, managers and employees often exercise options as they become more mature. Although this is common and completely legal, it can look suspicious if the shares mature before an event occurs that affects a company’s stock price. The news of the new policy is one such case as it resulted in an 8 percent drop in stock valuation, which has not yet fully recovered.
Photo credit: Lori Butcher