Unity’s Riccitiello and Whitten talk ironSource merger | Pocket Gamer.biz

News of Unity and ironSource’s upcoming merger came as a considerable surprise to many, but to hear Unity Technologies CEO John Riccitiello and Unity Create Senior Vice President and General Manager Marc Whitten, the partnership is the latest step in an industry that has exploded during the COVID pandemic and will continue to thrive.

It’s also indicative of Unity’s confidence in mobile. Riccitiello and Whitten spoke to PocketGamer.biz about how the merger came about, the company’s optimism about the industry’s future despite the looming recession, and why developers can’t turn their noses anymore. to monetization and comments.

PocketGamer.biz: How long have Unity and ironSource been discussing merge options?

John Riccitiello: Not that long – we’ve known them for years, but our relationship with them is new, so we didn’t start merger talks a very long time ago. The next S4 filler will actually include a timeline of the conversations that took place.

Just like the rest of the games industry, Unity has gotten into a few recent high-profile acquisitions, such as Weta Digital, but this is specifically a merger.

Riccitiello: ironSource became a part of us because they believed so much in the company and wanted to be part of it. It’s not like the Weta situation where Peter Jackson thought, ‘Here’s my business, I’m selling it, I’m taking the money.

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 centers on transforming Unity into a combined growth engine, with features like the integration of monetization metrics. What kind of developer feedback have you received that led to this direction?

Mark Whitten: It boils down to a few key aspects: the first is the massive success of game making in general, especially on mobile. The second is the amount of mobile releases each month, in the tens of thousands.

From the game creator’s point of view, 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 to build a live engine – something that can provide critical feedback as early in the build process as possible, and start that conversation with potential users at that point.

Implementing monetization earlier in the process and conversation is definitely an angle that has been rejected by some developers.

Riccitiello: Ferrari and some of the other high-end automakers still use clay and carving knives. It’s a very small part of the gaming industry that works that way, and some of those people are my favorite people to fight with in the world – they’re the most beautiful, purest, most beautiful people. brilliant. They are also some of the biggest idiots.

I’ve been in the video game industry longer than anyone else – as far as gray hair and all that. Previously, developers threw their game over the wall to the publicist and sales force without any prior interaction. This model is embedded in the philosophy of many art forms and mediums, and it is one that I deeply respect; I know their dedication and attention.

But this industry divides people between those who still hold to this philosophy and those who overwhelmingly embrace how to understand what makes a product successful. And I don’t know of any successful artist who doesn’t care what their player thinks. This is where this feedback cycle comes back, and they can choose to ignore it. But choosing not to know at all is not a good decision.

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

[Creatives are] the most beautiful and purest and brightest people. They are also some of the biggest idiots.

John Riccitiello

Blanched: To double up on John’s point, Unity has democratized creation. These days, if I told you that the next breakaway title will be won by two guys sitting in an apartment in the Philippines, you wouldn’t blink twice. There is a beauty in the tools that allow people to discover that this is how they want to make a living, and our responsibility is to continue this democratization.

Looking at ironSource, they came up with the same ideas. Make commenting and posting more transparent, instead of locking it into a marketing black box. Now creators can look at deep insights into monetization and feedback the same way they would look at load times or where they need to optimize their C# code.

ironSource would have been valued at 74% more than its current value. How did you arrive at this valuation?

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

Mergers and acquisitions often precede personnel changes, and I understand that Unity recently announced layoffs of approximately 4% of its global staff.

Riccitiello: For the sake of clarity, we have not announced anything. It was a leak to Kotaku, and while we said we were eliminating four percent of our positions, over half of them were rehired from other parts of Unity, so as far as stories go of layoffs in quotes, we’re not a lot of one.

Do you foresee any other personnel changes, given the merger?

Riccitiello: Not in light of the merger. On the contrary, I would say that we are both lean and reasonably weighted companies. There will likely be fewer additions, but we are looking at our synergies which will help grow the business much faster.

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

Riccitiello: Tomer joins my direct team, but I can’t think of anything else.

Just one last question: We’ve seen tremendous confidence coming out of the pandemic, and it’s given way to immediate, pre-recession defensiveness. What are your expectations for the coming months?

Riccitiello: One thing that I always find interesting is that whenever we talk about the stock market and the future of recession, the only growing industry becomes pundits. People who have something to say and who don’t really know what they’re talking about.

My personal view is that gaming is going to become an industry over the next five or even seven years.

John Riccitiello

So let me give you a few things I know. First, gaming has been a fast growing industry. For more than 30 years, it was smaller than music, television, cinema; all forms of media. And every year, inch by inch, the gaming industry has surpassed them all in every measure: number of people engaged, time invested, dollars spent. It’s a meteoric, meteoric rise, but it didn’t happen in a straight line.

Second, the level of engagement during COVID was staggering, and not just the games. Many industries have returned to pre-COVID levels. But this industry has accelerated dramatically, and now I would say we’ve made three years of progress in two, rather than four in two.

So if the gaming industry can survive every recession, while winning over every other form of media, for 30 years, that can take COVID as a relatively modest speed bump.

My personal view is that gaming is going to become an industry over the next five or even seven years. This is not a difficult prediction to make as this is the trend line we found ourselves on. But I couldn’t be more optimistic about this industry, and the number one form of gaming is mobile. And when you’re on mobile, you’re driven by in-game advertising. With this merge, we had the opportunity to do something really special.

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