Unity Software (NYSE:U), the maker of one of the leading gaming software engines, recently changed its pricing structure to a per-installation model that left creators scrambling in its wake. Investors, meanwhile, also panicked at the thought of hordes of hobbyist developers going elsewhere for their engine needs and pulled out over 6% of Unity’s market value with them in Monday afternoon’s trading.
Multiple analysts, including those from Benchmark, Jefferies, and Oppenheimer, all cast doubt on Unity’s move. They wondered what the extent of the losses would be as developers hauled stakes for anywhere else rather than grapple with Unity’s bizarre new pricing decision. This comes in the wake of an upgrade from Bank of America, as analysts there noted that better monetization means a better Unity. Though that rings a bit hollow in light of the responses seen so far.
Indeed, the backlash from Unity’s decision has been downright epic. Gaming webcomic mainstay “Penny Arcade” compared Unity CEO John Riccitiello to some kind of eldritch horror. And that was one of the funnier interpretations; only last week, Riccitiello had to cancel a town hall meeting to explain the changes following at least one credible death threat. Even “The Game Awards” host Geoff Keighley got involved, and he was not on Riccitiello’s side. Unity—perhaps sensing that its entire operation faced disaster—announced that there would be “changes” made to the policy, with updates to follow in “a couple of days.” Part of Keighley’s response, meanwhile, was an open demand to “see the changes” in question.
Is Unity Software a Buy Sell or Hold?
Despite today’s losses, a wounded Unity Software still has friends among analysts. Supported by 10 Buy ratings and seven Holds, Unity Software stock is considered a Moderate Buy. Further, with an average share price of $49.19, Unity Software stock offers investors 44.63% upside potential.
