Unity CEO strives for execution and accountability | Matthew Bromberg interview

The previous CEO of game engine maker Unity didn’t exit on the best of terms. John Riccitiello resigned after an ill-fated pricing battle. Game developers revolted on a scale unseen in modern game development history.

Matthew Bromberg joined as CEO about 90 days ago. The executive team has shuffled. In his first earnings call, Bromberg told investors he would try to create a culture of execution and accountability. Unity reported it had a small improvement in its Q2 adjusted earnings and the stock price climbed a bit. So far, so good, and, for sure, it could have been worse.

I had a chance to talk with Bromberg about his plans and his first few months in office. (Bromberg will be a speaker at our GamesBeat Next 2024 event on October 28-29, 2024, in San Francisco). He told me he has been going around meeting staff and customers in listening mode.

“We could be better partners. We could produce more stable products. We could deliver more value,” Bromberg told me. “That’s what was inspiring for me about the opportunity.”

While Unity has parted with about 2,400 employees since its peak, but it still has about 5,000 employees and alongside Epic Games’ Unreal Engine it remains one of the most important game development platforms. And while competition with Epic is serious — as Epic can finance its engine with Fortnite revenues — there’s a new breed of competition in the form of open-source game engines like Godot. This fall, Unity will formally launch its latest version of its game engine, Unity 6, and it will tackle AI.

I talked with Bromberg about these topics and more. Here’s an edited transcript of our interview.

GamesBeat: How long have you been at Unity now?

Matthew Bromberg: It’s been 90 days. I have it all figured out!

GamesBeat: You called for a culture of more accountability and execution. How do you look back in hindsight at some things that Unity has not gotten right? Things that needed to be addressed or fixed.

Bromberg: I come to this experience as a customer first, a customer of Unity. My excitement about it comes from a place of understanding what is great and foundational about Unity. But there’s also a sense I had as a customer, and that I think some other customers shared, that we could do better for customers. We could be better partners. We could produce more stable products. We could deliver more value.

That’s what was inspiring for me about the opportunity. Unity is such an important company. We’re excited about bringing it back to where it should be.

GamesBeat: Do you look back on the runtime fee controversy as part of that problem?

Bromberg: It’s certainly an example of us getting sideways with customers. It’s okay to take tough decisions, but it’s really important to listen and to understand how your customers want to buy from you. What kind of partnership do they want? That’s important. In my conversations with customers, they’re generally not saying that they’re not okay with paying more. They want Unity to be strong and they understand the level of investment that’s required to make a great game engine. But I’m not sure we’ve always heard them as clearly as we could about how they wanted to do that.

GamesBeat: Some level of certainty about how much they would be paying is important.

Bromberg: Right. Nobody wants to be unclear about what they’re going to owe you and how that’s going to work. You can’t have unbounded things in your business. Nobody would like that. I certainly wouldn’t.

GamesBeat: Do you feel like that’s on the right path now? Are customers generally happy with the ultimate solution that Unity came up with?

Bromberg: That’s one of the first things I’ve been focused on in the last 90 days. I’ve been out speaking to lots of customers. I’m trying to get a feel for where they are on it. I’m not sure we’ve completed the analysis yet, but we’re definitely listening.

GamesBeat: I notice you did better in the last quarter. That seems like a step in a positive direction. Do you think some of that is due to the pricing change that resulted?

Bromberg: No, I don’t think so. We’re happy about the quarter, and thank you for that, but our pricing changes tend to roll into the business much later. They tend to follow adoption cycles. People need to build on the new version. The impact of our pricing changes tends to be way downstream.

GamesBeat: We’ve seen Unity’s business expand into so many things. Can you go back and explain all that?

Bromberg: Our business is really pretty straightforward. We want to be what we think is the only place, the only company in the world, that’s capable of supporting the entire game development cycle. Prototyping through builds through live service and into user acquisition and monetization. That’s what we do. We also sell our core technology to industry customers, primarily around those that are interested in visualization of 3D assets. That’s the business of Unity.

GamesBeat: There’s the division between Create and Grow.

Bromberg: Yeah, Create is the engine. Grow is the added monetization piece. One thing that we’re realizing, and certainly one of the things we’re focusing on, is the extent to which those businesses are unified in the mind of the customer. As someone who’s made a lot of mobile games in particular, it’s a holistic view you have to take. You build the game. You design systems. The game operates. You acquire players. You try to sell advertising. That’s one process. It might be two divisions for us, but the customer wants it to be together.

GamesBeat: Using your engineers for external development, is that still a part of it? Or is that more of a legacy?

Bromberg: We had a whole professional services business that we’ve exited almost entirely, as well as lots of other things. But it’s really just the business I described to you now.

GamesBeat: How many people are at Unity now? How far down is that from peak?

Bromberg: I believe that before I got here we separated from about 2,400 people. We’re about 5,000 people now across Unity. We’re past the conversation–I’m a believer in operating discipline. I think you can get efficiency by operating better. I’m not a big believer in taking big whacks at the employee base. I understand sometimes you can get into a position where that’s required. I accept that. I accept that we were spending too much money. But going forward we’re going to focus on operating the business better. The efficiencies we’re going to gain will be focused on strategic or business changes we make.

GamesBeat: If you’re having to do the work with fewer people, what is the part you’re concentrating on, or where you’re putting more resources? Do you know where that is yet?

Bromberg: I think you conceptualize it the right way. We made choices in our portfolio to stop doing things. By and large, that enables you to operate with fewer people, because you’re doing fewer things. Having said that, we’re focused on ensuring that we have the resources we need to support Unity 6, which is coming out in the fall. We’re getting a good response. It’s a stable new version of Unity. It’s going to be the bedrock of our offering for years to come. We’re making sure we’ve resourced that properly, both today and into the future. On the advertising and monetization side of our business, we’re resourcing some fundamental product work to continue to deliver better ROI to our customers on that side.

GamesBeat: Does the rollout of Unity 6 begin in a soft way, and then eventually reach a point where the new subscription fees would kick in?

Bromberg: We do go through the typical alpha-beta preview phases. We already have customers that have adopted it through that soft phase. The final rollout is this fall. You’ll see adoption increase after that. That process has been going very smoothly.

GamesBeat: In your remarks you mentioned that you’re redoing some of the machine learning stack. Does that involve incorporating generative AI?

Bromberg: The ML and data infrastructure work we were talking about was mostly focused–that conversation is mostly focused on the ad and monetization side of our business, not the engine side. That’s really about helping our customers take better advantage and get better ROI from our data stack. It’s ongoing work. That’s not work taking place in the engine.

GamesBeat: As far as seeing how extensively generative AI is going to affect game development, what’s the assessment right now?

Bromberg: From an AI perspective, our focus is going to be on how we can help customers make games more efficiently and less expensively. Again, having done that for a living, that’s the real pain point that game developers have. We’re uniquely positioned to be able to help there by way of obfuscating some of the complexity in our engine and in the process in general. It’s difficult to make games. We think AI can help that.

I’m a little less focused on generative AI right now, for a simple reason. The Unity platform is agnostic to the derivation of the 3D asset. It can be created in AI. It can be created more traditionally. When you make games you ingest your assets into the engine and then you start building. We’re interested in that moment and everything that comes after.

GamesBeat: How do you look at the competition with Epic now? Especially considering that they monetize in a different way.

Bromberg: We think about our competition as a competition with ourselves. That’s true both in our advertising business and our engine business. The work for us is to be the best version of ourselves and deliver the best products we can make that are uniquely ours. We have a ton of respect for all our competitors, but at the same time–I want us to focus on delivering the best version of ourselves.

GamesBeat: Have you thought of revisiting the notion of Unity making its own games?

Bromberg: It comes up a lot. If you told me before I started that I would be making Fortnite, then I would say yes. The challenge is, having done this for a living, it’s really difficult to make a hit game. The energy there is right. We can do a better job and do more understanding the pain points of our customers in doing more dogfooding with our own software. I 100% agree with that. I’m not sure we need to become a game publisher in order to do that.

GamesBeat: There’s competition coming from the Godot engine as well, from open source game engines. What do you think about that?

Bromberg: We know that our customers have a lot of options in the landscape. We’ve provided some opportunity for those folks to crop up. But again, when we do our job right, we’re going to be fine.

GamesBeat: I often thought of Unity as a kingmaker in some ways when it comes to what platforms you decide to support. Unity being early on the Apple Vision Pro makes the Apple Vision Pro more successful. How do you decide what’s important to support?

Bromberg: The way we think about it is more about our value in the ecosystem. We don’t think so much about just the technology platform. We think about all the value that surrounds it. All the game makers who are using our platform, the hundreds of thousands of developers who work in Unity, the partners who are able to plug into our platform. The biggest advantage of the Unity engine is that it’s extensible. We are open. That’s part of our main value. We’re spending a lot of time thinking more deeply about how we can provide more value in that regard, and in a way that recognizes how central we are to the ecosystem. Maybe we’d forgotten about that a bit.

GamesBeat: I see Epic being much more willing, over its history, to go to bat for developers in some ways. They went to war with Apple and Google, the bigger platforms. I’ve not seen Unity do this in the same way. What sort of philosophy do you have on this front?

Bromberg: We’re focused, in a way, on the opposite. We’re focused on figuring out how to be better partners, rather than going to war with people. We’ve had plenty of wars. We don’t need wars. What we need is to do a better job of listening and getting closer to everyone in our ecosystem. I’m focused on partnerships right now.

GamesBeat: Things are happening that are changing in the world when it comes to what benefits accrue to developers. The European Union has been very active when it comes to regulating the platforms. They’re facing more scrutiny. Do you feel like that’s a positive trend around the world?

Bromberg: There are portents of real movement in some of these markets. I think dynamism in these markets is great. We’re definitely following it. There will be opportunities in the future, it looks like, for more stores and more different ways for customers to find games and pay for them. In general my view is that’s a positive development.

GamesBeat: As far as the ad business goes, Apple’s focus on privacy over targeted advertising threw a lot of the game industry for a loop, Unity included. Do you feel like we’re past that? Are we at a point where there’s a reasonable balance? Is promoting games getting better?

Bromberg: My sense is that publishers and the industry–it’s still difficult. Certainly more difficult than it was. Acquiring players is still more difficult and more expensive. The industry is still feeling that. We see ourselves as existing to help and make that less painful. The more effective our products are at helping game publishers build audience affordably, the better off we are and the better off they are. The privacy landscape and the advertising landscape are always changing. We try to adapt as quickly as we can and offer as much value as we can.

GamesBeat: As far as the acquisition space, do you feel like there are still things Unity needs to pick up?

Bromberg: We’re focused on offering the businesses we have, sticking to the ones we have. We’re much less focused on looking to acquire. We have everything we need to succeed here. We just need to be disciplined in how we operate those assets and deliver for our customers.

GamesBeat: How do you look at some of the bigger trends that have come and gone or come and stayed?

Bromberg: AI is going to have a meaningful impact on how all software is built in the future. I know there’s talk of the AI bubble and things like that. For me that changes nothing about how impactful it’s going to be as far as how people use software to build things. That’s true of games and anything else.

The blockchain games phenomenon has not yet hit the consumer mainstream. Developers seem to have been challenged in building great consumer experiences. They’ve focused instead on monetization and other things that haven’t been sustainable. Over time that will get figured out. It looks like it has proven more difficult than many imagined. But in the game industry you can always depend on people to innovate their way into new things. It’s probably just a matter of time, but I haven’t seen it yet.

GamesBeat: I don’t know what suits you more: the image of rolling up your sleeves and executing, or having a vision.

Bromberg: You know, I’ve always thought that’s a false choice. You can have both. If you’re going to succeed as a business you need to have both. In the popular imagination, it’s like you can only have dreamers or hard-nosed executors, but not both. I’m a big believer that you dream and then you go do it. Both things are possible, and in fact both things are necessary to succeed in our business. But if I had to choose between dreaming and doing, I would choose doing.

GamesBeat: I thought back to the early days of the Xbox. They all seemed to argue with each other across different camps. Ed Fries was there speaking on behalf of developers and gamers, arguing with J. Allard about shipping things, or about Robbie Bach about running a business. The interesting thing now is that Phil Spencer is a combination of all those characteristics in one person.

Bromberg: You need to be able to organize world-class talent. You need the best thinkers you possibly can, and you need to be able to organize that into a plan. You have to be able to deliver things for your customers. You can do both. You really can. I think we’re capable of doing it.

GamesBeat: You need a certain kind of person who can communicate authentically with the right audiences.

Bromberg: I think that’s right. Authenticity goes a long way in general. People want you to believe what you’re saying. If you make commitments they want you to meet them. It’s maybe not the most common quality, but I’d love for us to embody that as a company.

GamesBeat: When you bring new people in, with these executive changes going on right now, is that something you’re looking for?

Bromberg: Absolutely. One of the advantages of having been around for a while, you get to know a lot of people. You get a feel for the kind of people who are going to be the most effective, the best carriers of the culture you want to create. For me that combination of being open-minded, being curious and learning–we have brilliant people here at Unity. You have to listen to all the best thinking. And then you have to figure out a plan and get after it. I’m very drawn to people who possess those qualities.

GamesBeat: What are some things you’re spending time on going forward, in contrast to the first 90 days?

Bromberg: There’s been a lot of listening and learning. Just trying to be open-minded and understand where our customers are and where our employees are, what they want to do and how they feel. Now that those 90 days are behind us, we’re going into operating mode. We’re building products in our ad business. We’re going to release Unity 6. We have Unite in Barcelona in September, where we’ll be with all our customers. We’re really into operating mode.

GamesBeat: Yesterday I had a chance to ask Strauss Zelnick what he thought about where the game industry stands relative to the workforce and the layoffs we’ve seen. He said he felt like there’s a bit of a broad industry upswing in motion, one that’s just starting.

Bromberg: I would tend to agree. I think we’re seeing green shoots. You’ve been through some cycles, same as I have. When you’re late in the hardware cycle, everybody wonders what’s going on with gaming. Why isn’t there growth in gaming? I’ve seen this every time. Sometimes there are years where there just hasn’t been a great game that’s come out. Things are a bit cyclical. Then you get new hardware, new devices. Creative people innovate. Then you get growth. We’re going to be fine as an industry. That’s exactly what’s going to happen, because it always does.

GamesBeat: It feels that gaming culture is still doing well around the world. It’s in movies and TV shows.

Bromberg: There’s no lack of enthusiasm for interactive entertainment that I can see. None whatsoever.