It’s been a busy month for games and specifically game engines, what with the scare that the Epic Games and Apple lawsuit could result in users of Epic’s Unreal Engine being kicked off the App Store, and now with the IPO of Unreal’s major competitor, Unity ($PRIVATE:UNITY3D). The Unity engine submitted its S-1 on Monday, giving a clear window into the company’s metrics and impact across the gaming industry.
Though most game studios build their own proprietary engines - a base set of tools with which to build games or 3D media - Unity is often favored by mobile and indie developers whereas Epic’s Unreal Engine is often used by many large, AAA developers. According to Unity’s S-1, over half of the 1,000 top games across the App Store and Google Play Store last year were made using Unity.
Led by CEO John Riccitiello, Unity estimates its market opportunity within games to be over $16 billion by 2025, and has reached an estimated 2 billion users, according to its S-1. That’s not to say that a quarter of the world’s population are game developers, but rather that products made and supported using Unity have reached that broad of an audience. The size of that audience is likely to keep growing as gaming grows worldwide in popularity, a trend accelerated by COVID-19 which has pushed user metrics and stocks for games worldwide through the roof.
That global trend has helped push Unity to grow at breakneck speeds, as we reported earlier this summer. Unity’s Linkedin Headcount has grown 37% since January and 135% over the last three years as mobile and indie gaming have grown in popularity. With a new console generation on the horizon and more people playing games than ever, Unity is likely trying to increase its support for and reach out to more would-be developers to lay claim to its share of the growing market.
Job listings are soaring as well, having increased 45% since January and 140% over the last three years, defying our previously observed trend of companies slowing down hiring ahead of an IPO. Unity sees that the market for games is only going to grow, and it wants to show that it’s leading the pack.
This level of growth and the expanding market for games across all platforms will help to sweeten the less-appealing aspects of Unity’s filing, like their $163.2 million in losses in 2019, up approximately $30 million from the year prior. That blow is also softened by its 2019 revenues of $541.8 million, up 42% from 2018.
Unity has already cemented itself as a major player in the world of game development and is establishing a powerful brand beyond simply being a behind-the-curtain service. Our June reporting found a dramatic increase in Facebook and Twitter engagement around the engine, which is unusual considering the overwhelming majority of the game-playing population only interacts with end products and brands rather than the engine itself. By establishing strong name recognition and positioning itself to capitalize on its growing market, Unity is likely to have a successful IPO launch and to grow substantially in the years to come