Why can’t they remain solvent by adjusting their fee schedule though?
Likely they’ve been remaining solvent through private equity, which has probably dried up. Their fees were probably just enough to entice further investment, but most of these companies operate on paying loans with new loans until they can become profitable in the long term.
Usually when a price hike that doesn’t make sense happens, it’s because they’ve failed to get a new injection of capital to remain in solvency. So they have to speed up the fee schedule to make their payments to the investors.
Corporate profit-seeking is the primary driver of the inflation in the global economy - I think the above commenter has put the cart before the horse.
It’s a public IPO, they don’t have to be profitable, they just have to appear as if they will be profitable to increase share price. This kind of hike is not something that a public IPO would do as it will assuredly drop stock price, which is illegal unless there is no alternative.
Without providing any basis for their charges, and without a way for devs to independently validate them, I can’t see how the charges could even be considered valid legally, let alone pull them out of insolvency. A dev fee per fingerprinted installation doesn’t have any precedent in the SaaS space to my knowledge. I don’t think it would be illegal for an IPO to do this if it was truly meant to increase longterm profitability - e.g. price speculation that’s happened today could similarly happen for any reason at any time on any stock. But the point is it won’t work without a monopoly they don’t have - they’ll have to go back on it (at least with regard to games already released), or end up in costly litigation
Without providing any basis for their charges, and without a way for devs to independently validate them, I can’t see how the charges could even be considered valid legally
Ehhh, it very well might not be. But service providers have an awful lot of control of their platforms and who and how they allow access to it, and for how much. A lot of the interpretations in IP courts when it comes to the digital service seem to be about 5 years behind the actual industry. Add on the fact that a lot of the people running the IP courts barely know how to operate a computer, let alone the ins and outs of digital media and we usually get an environment that’s skewed towards the industry.
A dev fee per fingerprinted installation doesn’t have any precedent in the SaaS space to my knowledge.
I think it would be interpreted pretty close to what reddit did with their API access. Technically it’s just a different type of service fee, and it’s backed by a pretty simple logic of offsetting the cost of the involved traffic.
I don’t think it would be illegal for an IPO to do this if it was truly meant to increase longterm profitability - e.g. price speculation that’s happened today could similarly happen for any reason at any time on any stock.
The main sticking point would be that you would have to prove that there is a logical path to long-term profitability that surpasses or offsets the resulting devaluation of pursuing a completely different profit model.
I think it really depends on how big the devaluation will be at the end of everything, and if they loose large clients specify their reasons for leaving.
It’s all pretty complicated, but Im still guessing theyre having solvency issues, just by looking at their IPO price since the last quarter of 2021 they’ve lost about 50% of their value without any real signs of recovery.
It’s not really an intricacy of IP law though, it’s kinda one step away from a contract saying “I get to write a blank cheque from you to me. Don’t worry, I’ll put in the right amount you owe, and if you don’t think I did just tell me and we can talk about it. I reserve the right to say no though”
To legally charge the dev, an invoice has to be raised. That’s a legal document, there’s an item on it, a quantity, and a price. If the details of the invoice cannot be verified by either party, it is invalid. About as fundamental a principle in contract law as you can get, I imagine.
The way it’s different to reddit is that Unity wants to charge per installation on unique hardware. That is, if you buy a license for the game, and install it on your PC as well as your Steam deck, then the devs need to pay 2x install fees.
It is in the fact that the game was built on their platform using their IP. They may own the game they created, but they don’t own the right to distribution, that’s a service.
legally charge the dev, an invoice has to be raised. That’s a legal document, there’s an item on it, a quantity, and a price.
That’s if you are doing product business, the service industry has more flexibility in their terms of service and how much they can charge for it. The option is typically to discontinue the service or to pay for continued service.
The way it’s different to reddit is that Unity wants to charge per installation on unique hardware. That is, if you buy a license for the game, and install it on your PC as well as your Steam deck, then the devs need to pay 2x install fees.
Right, and as a service they will claim that additional downloads are an responsible for the loss of additional revenue, one they wish to offset to the customer who created it.
I’m not saying that this is a good thing, just explaining that the service industry has a lot leverage in court.
And I’m going a step further to say that’s not actually a defensible argument. The distribution is a distribution of game licenses with associated terms, and those terms don’t dictate a limit to the consumer on the number of installations on hardware they own for private/non-commercial purposes. For Unity to argue additional installations per license represent lost value is an argument against the terms of the licenses, not the terms of their arrangements with devs.
Lost revenue obviously isn’t the reason for it, anyway. It’s almost certainly due to technical limitations of their data collection method resulting in them not being able to associate unique installations with their associated license. So the reason devs must accept a degree of inaccuracy that inherently favours Unity is that it would be illegal for Unity to be accurate.
The distribution is a distribution of game licenses with associated terms, and those terms don’t dictate a limit to the consumer on the number of installations on hardware they own for private/non-commercial purposes.
Right, but it’s not unity who is selling the game license. Nor are they limiting the end consumers ability to download the game as many times as they wish. They are just charging the dev for the use of server space and traffic.
argument against the terms of the licenses, not the terms of their arrangements with devs.
The arrangement with the devs is literally the only thing they have control over… it’s a service based company. Services are allowed to change their terms whenever they want, you don’t own access to their services, you pay to access them. If they change their terms of services and you don’t agree, you stop paying for the continuation of service.
TOS agreements are for the benefit of the company, not the benefit of the consumer. You can sue or arbitrate over the TOS, but it’s primarily only successful in cases involving negligence that harms the client e.g a leak of sensitive data that makes someone loose an important client.
Lost revenue obviously isn’t the reason for it, anyway. It’s almost certainly due to technical limitations of their data collection method resulting in them not being able to associate unique installations with their associated license. So the reason devs must accept a degree of inaccuracy that inherently favours Unity is that it would be illegal for Unity to be accurate.
I think that’s quite an assumption… servers cost money, sending a large amount of traffic through them cost money, it’s pretty standard for service companies to increase fees with increased server usage.
If I were a guessing guy, I would imagine that being able to track unique downloads would be kinda important for a gaming dev service.
Likely they’ve been remaining solvent through private equity, which has probably dried up. Their fees were probably just enough to entice further investment, but most of these companies operate on paying loans with new loans until they can become profitable in the long term.
Usually when a price hike that doesn’t make sense happens, it’s because they’ve failed to get a new injection of capital to remain in solvency. So they have to speed up the fee schedule to make their payments to the investors.
It’s a public IPO, they don’t have to be profitable, they just have to appear as if they will be profitable to increase share price. This kind of hike is not something that a public IPO would do as it will assuredly drop stock price, which is illegal unless there is no alternative.
Without providing any basis for their charges, and without a way for devs to independently validate them, I can’t see how the charges could even be considered valid legally, let alone pull them out of insolvency. A dev fee per fingerprinted installation doesn’t have any precedent in the SaaS space to my knowledge. I don’t think it would be illegal for an IPO to do this if it was truly meant to increase longterm profitability - e.g. price speculation that’s happened today could similarly happen for any reason at any time on any stock. But the point is it won’t work without a monopoly they don’t have - they’ll have to go back on it (at least with regard to games already released), or end up in costly litigation
Ehhh, it very well might not be. But service providers have an awful lot of control of their platforms and who and how they allow access to it, and for how much. A lot of the interpretations in IP courts when it comes to the digital service seem to be about 5 years behind the actual industry. Add on the fact that a lot of the people running the IP courts barely know how to operate a computer, let alone the ins and outs of digital media and we usually get an environment that’s skewed towards the industry.
I think it would be interpreted pretty close to what reddit did with their API access. Technically it’s just a different type of service fee, and it’s backed by a pretty simple logic of offsetting the cost of the involved traffic.
The main sticking point would be that you would have to prove that there is a logical path to long-term profitability that surpasses or offsets the resulting devaluation of pursuing a completely different profit model.
I think it really depends on how big the devaluation will be at the end of everything, and if they loose large clients specify their reasons for leaving.
It’s all pretty complicated, but Im still guessing theyre having solvency issues, just by looking at their IPO price since the last quarter of 2021 they’ve lost about 50% of their value without any real signs of recovery.
It’s not really an intricacy of IP law though, it’s kinda one step away from a contract saying “I get to write a blank cheque from you to me. Don’t worry, I’ll put in the right amount you owe, and if you don’t think I did just tell me and we can talk about it. I reserve the right to say no though”
To legally charge the dev, an invoice has to be raised. That’s a legal document, there’s an item on it, a quantity, and a price. If the details of the invoice cannot be verified by either party, it is invalid. About as fundamental a principle in contract law as you can get, I imagine.
The way it’s different to reddit is that Unity wants to charge per installation on unique hardware. That is, if you buy a license for the game, and install it on your PC as well as your Steam deck, then the devs need to pay 2x install fees.
It is in the fact that the game was built on their platform using their IP. They may own the game they created, but they don’t own the right to distribution, that’s a service.
That’s if you are doing product business, the service industry has more flexibility in their terms of service and how much they can charge for it. The option is typically to discontinue the service or to pay for continued service.
Right, and as a service they will claim that additional downloads are an responsible for the loss of additional revenue, one they wish to offset to the customer who created it.
I’m not saying that this is a good thing, just explaining that the service industry has a lot leverage in court.
And I’m going a step further to say that’s not actually a defensible argument. The distribution is a distribution of game licenses with associated terms, and those terms don’t dictate a limit to the consumer on the number of installations on hardware they own for private/non-commercial purposes. For Unity to argue additional installations per license represent lost value is an argument against the terms of the licenses, not the terms of their arrangements with devs.
Lost revenue obviously isn’t the reason for it, anyway. It’s almost certainly due to technical limitations of their data collection method resulting in them not being able to associate unique installations with their associated license. So the reason devs must accept a degree of inaccuracy that inherently favours Unity is that it would be illegal for Unity to be accurate.
Right, but it’s not unity who is selling the game license. Nor are they limiting the end consumers ability to download the game as many times as they wish. They are just charging the dev for the use of server space and traffic.
The arrangement with the devs is literally the only thing they have control over… it’s a service based company. Services are allowed to change their terms whenever they want, you don’t own access to their services, you pay to access them. If they change their terms of services and you don’t agree, you stop paying for the continuation of service.
TOS agreements are for the benefit of the company, not the benefit of the consumer. You can sue or arbitrate over the TOS, but it’s primarily only successful in cases involving negligence that harms the client e.g a leak of sensitive data that makes someone loose an important client.
I think that’s quite an assumption… servers cost money, sending a large amount of traffic through them cost money, it’s pretty standard for service companies to increase fees with increased server usage.
If I were a guessing guy, I would imagine that being able to track unique downloads would be kinda important for a gaming dev service.