This segment represents 40% of Unity's revenues. Otherwise, they'll have an annual 5% commission to pay. In a logic of market penetration, users can use it for free in the case they are generating less than $100k with it. Unity's business model is divided into 3 segments:Ĭreate solutions: through this segment, Unity customers can create and develop video games with Unity Engine. Major Clients Outside Video-Games Industry (Bloomberg) Unity's Business Model The company is trying to position itself as a comprehensive AR/VR platform to build any sort of virtual reality and benefit from a large diversity of clients ranging from small developers to major institutions.įamous games developed with Unity engine (Unity Software) Aside from that, Unity's platform currently employs a set of diversified use cases that go beyond gaming. Its original goal is to make video game development faster and more accessible. Referring to Unity's 2021 Gaming Report, 94 of the Top 100 development studios (ranked made by looking at global revenues) are Unity customers. Through its platform, Unity Software solutions provide graphic tools to create, run, and monetize real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. According to Gamedesign, the firm is one of the major players in the licensed game engine industry. Company Presentationįounded in 2004, Unity Software is a leading video game software development company based in San Francisco. I initiate coverage on U with a Buy rating and a target price of $35. I expect the firm, supported by strong tailwinds inside and outside the video game industry, to capitalize on its leading position and product to win market shares while going through all the challenges it is currently facing. Currently, the short-term noise linked to the Fed Hawkishnesh, the recent fusion with IronSource (which raises concerns), and data-related issues linked to Apple's ( AAPL ) change in its Identifier for Advertisers policy (IDFA) are unclipping all the major assets and potential this company has. In my view, the company's quality and potential are strongly misunderstood by the market. Unity Software ( NYSE: U) has been severely punished in 2022, a year characterized by a tough macroeconomic context. Gorodenkoff/iStock via Getty Images Investment Thesis
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