Game engine Unity developer talks about privacy and advertising
Speaking of
Unity CFO Kim Jabal interview: Understanding the tradeoff between market share and profits | VentureBeat
https://venturebeat.com/2021/02/14/unity-cfo-kim-jabal-interview-understanding-the-tradeoff-between-market-share-and-profits/
Unity Technologies announces financial results for the fourth quarter of 2020 (October-December), reporting that sales in the same period reached $ 202.03 million (about 23 billion yen), up 39% from the same period last year. did. However, the company also posted an operating loss of $ 80.80 million in the same period, which is double the amount of $ 48.6 million in the same period of the previous year.
But for Unity Technologies, large operating losses aren't a big deal. That's because Unity is used in more than half of mobile games, giving it an overwhelming market share over competing game engines Cocos2d and Unreal Engine . In recent years, Unity has taken a strategy that emphasizes market share over profit, and VentureBeat points out that this strategy was successful by the time the article was written.
One of the two major topics that had a major impact on the game industry in 2020 is 'Coronavirus Disease (COVID-19)'. Due to the pandemic of COVID-19, the
Another topic that had a major impact on the gaming industry in 2020 was 'Apple's decision to change the acquisition of the advertising identifier IDFA to a user permit system.' Apple's change to IDFA acquisition to user permission is expected to have a significant impact on the mobile application market. In fact, Facebook said, ' Revision of iOS 14's privacy policy will make targeted ads harder and drastically reduce ad revenue. ' '(Apple's change in ad tracking specifications) will limit personalized ads, like us. It will affect large companies, but it will have a catastrophic impact on small businesses, 'he said, accusing Apple of unilaterally changing the IDFA specifications.
CEO Tim Cook responds to Facebook claiming that 'Apple's ad tracking specification changes will have a devastating impact on small businesses' --GIGAZINE
It is estimated that changes in the specifications related to IDFA will affect the mobile advertising market by as much as $ 30 million (about 3.2 billion yen), and since many mobile game apps using Unity also use this IDFA as their main source of income, the specifications The changes should be a big issue for Unity Technologies as well.
However, Unity Technologies has experienced a situation where the enforcement of the GDPR has forced it to change targeted ads to user permission. 'We can predict the impact of IDFA specification changes to some extent,' Jabal said, citing that advertising revenue via iOS apps accounts for less than half of the total advertising revenue of mobile apps. Unity has already had a 'IDFA-independent targeted advertising platform' for years.
In addition, the number of downloads of mobile apps developed with Unity or mobile apps monetized by Unity is 5 billion times a month, which is a big difference from the competitors in the advertising field. 'We believe we will be able to gain a significant amount of advertising share in the medium to long term,' said Jabal, CFO.
Given these factors, CFO Jabal predicts that Unity Technologies' sales growth will be around 30% in 2021.
CFO Jabal cites companies such as Google and Facebook as Unity Technologies' 'competitors in the advertising space.' Facebook has announced that the
It also emphasizes that Unity Technologies has a full focus on mobile and gaming, so it can serve targeted ads while respecting user privacy. Specifically, it is possible to place targeted advertisements based on 'the type of game played by the user, the user's behavior in the game', etc. without collecting the user's personal information.
Regarding the current situation where privacy is being emphasized, CFO Jabal said, 'It seems that advertisers do not intend to reduce spending even in such a situation,' and the number of advertisements is decreasing even as the regulation on targeted advertising is tightened. Emphasize that it is not.
In response to the question, 'Advertising is the majority of Unity's monetization methods. Do you have any ideas for improving profitability?', CFO Jabal said, 'In monetization, We are constantly improving our algorithms and the way we deliver value to our customers. We are announcing the Game Growth Program, which is based on in-game adoption and usage patterns, which type of game is successful. This is an example of data utilization that allows you to judge whether it is likely to be done from an early stage. This program is used to support the success of small game developers. In addition to the game growth program, this kind of monetization There are a lot of innovations in terms of profitability, 'he said, highlighting that he is simultaneously implementing multiple measures to improve profitability.
In addition, Unity Technologies is also focusing on the growth of the platform, such as hosting within operational solutions and providing orchestration products, voice services, analysis tools and so on. At the time of writing, all operational solutions were primarily games, but 'there are many opportunities beyond games,' Jabal claims. In fact, Unity Technologies has also announced a product called Forma that can be used for real-time 3D rendering in online product sales and car configurators. Since it needs to be hosted in the cloud, it will also create opportunities for other services such as hosting services and orchestration products provided by Unity Technologies.
Unity Forma: Reimagine marketing with real-time 3D | Unity --YouTube
It's great for users that games will be released across multiple platforms. However, it may not be profitable for the platform operator. On this issue, CFO Jabal said, 'Our focus is primarily on the developer side, not on the end user side. We are beginning to think about creator opportunities on the consumer side, but our main focus is still. Creators, people who create interesting content. Not many developers develop games on just one platform. They want to be able to play games on different platforms, even on PCs and consoles. This allows mobile and console players to play with each other. I can't imagine this trend going away. Platform providers such as Google, Apple, and Xbox are all multi-platform. I think I admit that the times have come. '
When asked, 'Do you think Unity Technologies is similar to early Facebook?', CFO Jabal said, 'I've been with Google for eight years, so I think it's similar to Google. It's very similar and that's one of the reasons I came to this company. Unity Technologies is a technology driven company and innovation is paramount. It attracts employees, makes the company a comfortable place to work, and It's a great culture of encouraging employees to be innovative. It's at the core of any business. I think it's a big similarity to Google in that it can innovate and change over time. '.
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