Unity Software Stock Rebounds As Ceo John Riccitiello Steps Down

Unity Software Stock Rebounds as CEO John Riccitiello Steps Down

Unity Software stock rose in the pre-market trading Tuesday following the sudden departure of CEO John Riccitiello. This unexpected move comes in response to a highly controversial pricing model change that has left the developer community in an uproar.

According to an official statement released by Unity on Monday, Riccitiello will also relinquish his position as chairman and leave the company’s board of directors.

Leadership Transition at Unity Software

Riccitiello, who has been at the helm of Unity Software since 2014, announced his immediate retirement late Monday. To fill the void left by his departure, James Whitehurst, the former CEO of Red Hat (NYSE: RHT), has been appointed the interim CEO. Meanwhile, Roelof Botha, managing partner of Sequoia Capital and the lead independent director of Unity’s board, will take over as chairman.

The decision to make this change follows the tumultuous aftermath of a pricing change that prompted key game developers to threaten to switch to rival vendors.

Developer Backlash Over Unity Runtime Fee (URF)

Last month, Unity Software (NYSE: U) faced a wave of frustration from developers who rely on the company’s software to create video games. Unity introduced a new pricing structure known as the Unity Runtime Fee (URF), which charged developers each time a game was downloaded based on revenue and download thresholds.

Developers expressed their dissatisfaction, arguing that this change limited their flexibility, increased costs, and compelled them to upgrade to Unity’s premium services to access higher download thresholds.

Ultimately, Unity did make some adjustments to its policy change in reaction to the criticism it received.

Unity Software’s Q3 Earnings Outlook

Unity Software (NYSE: U) has also confirmed its third-quarter earnings guidance, projecting adjusted profits in the range of $95 million with revenues estimated at around $545 million. This suggests that management has temporarily managed to mitigate the impact of the pricing structure changes.

Unity Software will release its third-quarter earnings on November 9.

Unity Software stock is up over 4% at $30.99 at the time of publication.