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Why is this a trend?
Twitter, Reddit, and Unity have not been profitable. This was fine when money was cheap (near zero interest rates). The market was awash with capital trying to find something that could turn a profit. A business plan that was basically underpants gnomes (1. Gather underpants 2. ???? 3. Profit!) was acceptable. Twitter’s and Reddit’s 1. was “gather users”, Unity’s “gather projects”. Now money isn’t free anymore, and capital is demanding that these businesses fill in 2. with something. Twitter is doing whatever Musk thinks is good, Reddit is trying to monetize its API to make AIs pay and to serve real users ads through its first party app, and Unity is trying to monetize the projects it has gathered. All of them have been offering a product below cost, and users are understandably angry that the cost is going up. (And in many cases, finding that the product isn’t really worth anything.)
Blizzard is different. It operates in a creative field and has been very profitable. Games are art as much as they are products that are sold. As such, they’re fickle: you can’t assembly line manufacture games and make a hit after hit. Artists in music that turn out bangers decade after decade are rare, as are authors, directors, etc. Blizzard’s streak of awesome games was bound to end eventually. AAA games are also extremely expensive to make: if you make an AAA game, it must be a hit or you’ll lose money. Alternatively, you can use dark patterns to monetize it, then it doesn’t have to be as good to make loads of money. Banking on your creatives to keep beating the odds is risky; infesting a good enough game with scummy monetization is a safer bet.
You’re spot on. The changes we’re seeing are seen as “radical”, as users had previously utilized them on the cheap. Given the recent changes in the overall market, shareholders are making radical demands. So companies have to think of something to pivot.
When we look at video games, we’ve seen micro transactions creep up, a slow boil if you will, so consumers have adjusted to the increases in these “optional” purchases. Video games overall have been largely stagnant in terms of price per copy. Even accounting for inflation, we’ve really only seen a 20 dollar increase over the years for the raw “license” of a game. Then you add in premium packs and other “optional” nonsense and most have just accepted it.
I think where people get heartburn on these things is when you introduce such a whiplash of a change with such short notice. I think even if Unity changed the pricing to 2 cents an install starting 2024, then upped it to 5 cents in 2025 and kept it at an incremental increase, it would have been a better “slow boil.” By going outright with the 20 cents per install for the entry level, the market reacted just as radically as the proposed changes.
While I don’t personally agree with the changes, I can understand through your point why they’re trying it. Late stage capitalism and all that
I think where people get heartburn on these things is when you introduce such a whiplash of a change with such short notice. I think even if Unity changed the pricing to 2 cents an install starting 2024, then upped it to 5 cents in 2025 and kept it at an incremental increase, it would have been a better “slow boil.” By going outright with the 20 cents per install for the entry level, the market reacted just as radically as the proposed changes.
It's not short notice, it's negative notice. They're potentially charging people who haven't used Unity in years, and had agreed to a completely different set of terms when they did use it. If they'd just made their charges apply to new versions of the engine going forward then people might still have stopped using Unity since it no longer made sense from a business perspective, but there wouldn't have been the outrage over it that we see now.
The problem is that Unity is trying to change their agreement with their past customers unilaterally to get more money. In that situation, one penny is too much.
You’re absolutely right regarding Unity. And yeah, going back to pilfer your clients piggy banks is horrible optics.
The only times I can think of when a company is justified in retroactively requisitioning cash from a client/business partner is when that client/business partner is either A) They (client/business partner) failed to honor their end of the agreement B) They lit your building on fire (i.e. damages)
Barring those two, not really anything else I can think of that warrants a company saying “oh you also owe us more money now based on your past sales.”
When I was thinking of short notice, however, I was thinking Reddit.
I'm still laughing at reddit and the ads thing. They pushed me more into blocking all their ads and tracking even harder, and to patch their official app when I had no choice but to go to reddit. Everything they've done has backfired as far as I'm concerned.
TL;DR quantitative tightening
So, you're saying that Twitter would've gone the same way without Musk?
I don't think it would've gone the exact same route, but they would've become more aggressive about gaining revenue.
Twitter wasn't very profitable, but it wasn't hemorrhaging cash either. If Musk had come in, left most things alone, and focused on killing the actual dead weight while getting a little extra cash from blue checks his simp army would have had ammunition for another decade.
It was in fact hemorrhaging money. They have been cash flow negative for quite some time now, with steadily decreasing assets. While they recently have been decreasing their short term debts, they have also been accumulating long term debt to such a degree, that in Q1 2022 their cash/debt ratio became negative.
All this long term debt must be becoming an increasing problem during the current economic climate.
No matter what you think of Musk, radical changes were absolutely necessary.
I am extremely skeptical of the claim that these companies have not been profitable. Fuck they said LOTR trilogy lost money and they were some of the biggest movies of all time. I don't think these companies are above cooking the books to make it look like they are losing money on paper.
It varies from company to company, but when infinite growth becomes unrealistic they get desperate for new revenue and start doing shitty nickel and dime tactics.
More specifically for Reddit thoughts are they realized that these new AI tools had already pilfered all of “their” content and they did not see a cent from it and responded wildly.
Not only Infinite growths, but infinite money. Since at least 2008, money was almost free for tech companies and somehow nobody cared, that they never made any profit - Twitter had like 2 profitable quarters in its entire history.
Now that interest rates went up, investors want to see results and if you can't burn through venture capital anymore, you have to get money somewhere else.
The AI training is one thing, but they are also looking to drive all traffic into their own mobile app and site with their own ads.
Reddit's decision about 3rd party apps and API changes actually made business sense. Not only was their content being pilfered on Reddit's expense, but a decent portion of their user base were using 3rd party apps that didn't collect as much data nor serve Reddit ads like the official app. At the expense of losing a decent portion of their community, moderators, and any goodwill their userbase had towards them, Reddit now has all their mobile users on a single, add ridden app that they own and can collect as much data as they want going forward as well as ensures that they get paid for AI API usage
Not really. I just patched my app, and the app of others, so it doesn't display anything nor track anything. Reddit caused themselves way more unnecessary harm and damage/ self inflicted wounds than they should have. That's all if i/we actually still need to go to reddit for anything. I've been purposely avoiding them and their search results and doing fine. The traffic I/we would've given them is significantly less.
Disruption to settle into a new norm.