Unity CEO John Riccitiello Steps Down After Price Hike Plan Backlash

In a surprising turn of events, John Riccitiello, the CEO of Unity Software Inc., has announced his retirement as the head of the popular video game software development company. This decision comes in the wake of a severe backlash from the gaming community regarding Unity’s new pricing model.

UNITY CEO

Riccitiello, who has been at the helm as Unity CEO since October 2014, had held the positions of chairman, president, and CEO. His sudden departure, effective immediately, has sent shockwaves through the gaming industry. Unity’s board has swiftly appointed James M. Whitehurst, former IBM Corp. President and Red Hat CEO, as the interim CEO, president, and member of the board. Additionally, Roelof Botha, the lead independent member of the Unity board, has been appointed as the chairman.

The controversy that ultimately led to Riccitiello’s retirement began when Unity announced a new pricing model under his leadership. The model included a Unity runtime fee based on the number of game installations, set to take effect on January 1, 2024, in addition to the existing subscription fees. This decision received widespread criticism, with particular concern expressed by indie developers who feared the increased costs would disproportionately affect them. Developers also worried that the new model would discourage participation in sales and promotions, as these could lead to more installations and higher fees.

Unity Software Inc. later issued an apology and scaled back some of the proposed changes, but the damage was already done, with many developers announcing their intentions to switch to alternative game engines. Riccitiello’s resignation appears to be an effort by Unity to rebuild trust with its developer community.

Jim Whitehurst, the newly appointed interim CEO, is widely respected for his track record in turning around companies facing challenges. He previously played a crucial role in Delta Air Lines‘ recovery during his tenure as COO from 2001 to 2007. Whitehurst later joined Red Hat as president and CEO in 2008, where he continued to demonstrate his ability to lead in demanding situations. IBM’s acquisition of Red Hat for $34 billion in 2018 saw Whitehurst appointed as the president of IBM in April 2020.

Whitehurst expressed confidence in Unity’s future, stating, “With the company’s experienced leadership and passionate employees, I am confident that Unity is well-positioned to continue enhancing its platform, strengthening its community of customers, developers, and partners, and focusing on its growth and profitability goals.”

Unity’s board has initiated a search process to identify a permanent CEO with the assistance of an executive search firm. Meanwhile, Unity is reaffirming its previous guidance for its fiscal third-quarter financial results, which are scheduled to be reported on November 9, 2023.

The departure of John Riccitiello marks a significant change in leadership for Unity Software Inc. as the company navigates through one of its most challenging periods, aiming to regain the trust of the developer community and maintain its position as a leading game development platform.