A Potential Earthquake in the Videogame Industry: UNITY Install Fees

[Myrdin Potter]

Hah, the "any competent business" is always an exciting concept, given how many vastly incompetent things one sees from companies way too rich to be anywhere near that incompetent. Like, to be fair, 98% of the time wealthy business are plainly competent, at like a baseline level, but that other 2%, hoo boy.

Also worth noting some companies have basically fundamentally useless in-house counsel. You may well have come across this yourself. I've never understood this, because in-house counsel tend to be pretty well-paid and often have better hours than is common, and it's very easy to get cost-efficient legal advice from definitely-competent external law firms (whether engaging them directly, using panels or whatever), so it's mystifying why this is surprisingly common. But you get these companies who have, like a decent-sized, well-paid in-house legal team, and they're just terrible at their jobs. And it's worse because they often essentially have "one job". Some things are probably not worth digging into I guess. Some combination of knowing where the bodies are buried, corporate inertia, internal politics, and so on I guess.

The companies I have been at had pretty solid internal legal departments (I even ran a decent sized one for almost 5 years and I am not a lawyer). More company specific routine matters were well handled by them and we went outside when we needed to. The in-house team was always good and talking to the outside lawyers to make sure business facts and goals were well documented in contracts.

 

[Storyteller Hero]

Meanwhile, Twitter is going to start charging subscription fees from everyone for its use.

I think that rumor was debunked, though if Elon Musk wanted to sell off Twitter, and needed to reduce its share price some more to attract a buyout, I wouldn't put it past him to psych out the user base.

I'm half convinced that the CEO of Unity is doing something like that - couldn't sell his own stock well enough so he cooks up a scheme to make Unity ripe for a buyout. Stock is after all mostly worthless if it can't be sold, at least to someone who just wants to enrich themselves.

 

[Dausuul]

Hah, the "any competent business" is always an exciting concept, given how many vastly incompetent things one sees from companies way too rich to be anywhere near that incompetent. Like, to be fair, 98% of the time wealthy business are plainly competent, at like a baseline level, but that other 2%, hoo boy.

Also worth noting some companies have basically fundamentally useless in-house counsel. You may well have come across this yourself. I've never understood this, because in-house counsel tend to be pretty well-paid and often have better hours than is common, and it's very easy to get cost-efficient legal advice from definitely-competent external law firms (whether engaging them directly, using panels or whatever), so it's mystifying why this is surprisingly common. But you get these companies who have, like a decent-sized, well-paid in-house legal team, and they're just terrible at their jobs. And it's worse because they often essentially have "one job". Some things are probably not worth digging into I guess. Some combination of knowing where the bodies are buried, corporate inertia, internal politics, and so on I guess.

My guess would be that it's simply a matter of non-lawyers having very limited ability to assess whether a given lawyer is any good or not. Everything takes so long to play out in the legal world, and there are so many factors going into any given outcome, that it would be challenging for a busy CEO to connect enough dots and realize their legal department sucks.

Plus, there's a significant chance the CEO sucks too.

 

[GreyLord]

Your first paragraph is ... um ... kinda confused (I'm being kind).

To try and unpack-

1. Implied contracts and "quasi-contracts" are not written on paper. If there is an actual contract, that controls. Instead, "quasi contracts" (such as the equitable concept of unjust enrichment) are simply the idea where the court imposes the obligation, usually under quantum meruit. But they would never take precedence over a written contract.

2. You cannot contract for something unlawful because its unenforceable. That's not a quasi contract, that's just contracts 101. So in some jurisdictions, for example, certain non-compete clauses would be unenforceable.

3. While I cannot 100% guarantee this, I am reasonable certain that any competent business would run proposed changes to licensing through legal prior to announcing them. Whether or not this applies to Unity Software Inc. (dba Unity Technologies) is beyond the scope of my knowledge. That said, this is a truly bizarre post to respond to, even to the extent I tried to understand it, because this is about licensing, and its a truism that implied licenses re: IP are incredibly limited under the law.

4. Finally, as a general rule, don't believe legal stuff from the internet. No, not even mine. If you have a real-world problem, consult a competent attorney in your locality.

I'm not sure we are having a difference of understanding here. I don't see where what I wrote differs from what you wrote (though what you wrote is definitely longer and probably easier to interpret or understand). That said, I may misunderstand it (not my area of expertise to be honest, I deal more in other areas of business and for legal matters like this would refer to...as you suggest...a lawyer or legal department which specializes in this area of interest).

For clarification though, using a dictionary type definition, as you said, law may forbid the non-compete clause, in which case a quasi contract in the same area may actually take precedence (basically meaning, if the written contract is illegal, yes, there is no valid contract in that regards unless otherwise having been understood). This is actually not UNCOMMON in some fields. I mention non-compete clauses because some nations have very specific laws pertaining to ideas in this regards where even if a non-compete clause is written, but not legal, a quasi-contract may state that an individual is therefore subject to other areas of concern. (For example, perhaps though they non-compete is illegal, services were actually exchanged in relation to the non-compete that deal with a quasi or implied contract, or other situations that may not be something to really get into).

Cornell Law definition

A quasi contract is a legal obligation imposed by law to prevent unjust enrichment. This is also called a contract implied in law or a constructive contract. A quasi contract may be presumed by a court in the absence of a true contract, but not where a contract—either express or implied in fact—covering the same subject matter already exists.


Because a quasi contract is not a true contract, mutual assent is not necessary, and a court may impose an obligation without regard to the intent of the parties. When a party sues for damages under a quasi-contract, the remedy is typically restitution or recovery under a theory of quantum meruit. Liability is determined on a case-by-case basis.


The concept of a quasi contract in Bailey v. West, 249 A.2d 414. While recognizing the doctrine of quasi contract, the Court held that “the essential elements of a quasi-contract are a benefit conferred upon defendant by plaintiff, appreciation by defendant of such benefit, and acceptance and retention by defendant of such benefit under such circumstances that it would be inequitable to retain the benefit without payment of the value thereof”.

Now, that said, (and I tried to be clear on this, though it may not have been clear) laws actually differ from nation to nation. What may be legal in one may not be legal in another, and what contracts can be adhered to in one may not be able to be adhered to in another. I do not know all the rules and laws in all the nations around the earth, and the definition listed above may actually not be the correct way to identify it in some areas (I am not about to make a definitive statement in regards to how justified law.cornell.edu stands all around the globe or how one nations laws and their interpretation stand in relation to other nations and their laws and interpretations).

I absolutely also agree on your statement that (and I think I also stated this at the end of my post that one should talk to their lawyer or legal department in this regards) that talking to a lawyer rather than relying on the internet for legal advice is a good thing to do.

 

[GreyLord]

My guess would be that it's simply a matter of non-lawyers having very limited ability to assess whether a given lawyer is any good or not. Everything takes so long to play out in the legal world, and there are so many factors going into any given outcome, that it would be challenging for a busy CEO to connect enough dots and realize their legal department sucks.

Plus, there's a significant chance the CEO sucks too.

I don't know what's going on with Unity. I know many are concerned about it. I have no idea why they are making the decisions they are.

I think sometimes it depends on the size of the legal department. There are lawyers with different expertise in different areas. I have used a team of legal experts and even among them they have different focuses on what they are good at. Many of them work with contracts, but there are different types of contracts and they each have a focus. There are others that work on other areas.

Other places may have fewer lawyers and perhaps only have one that works on contracts, one that works on paper/administrative, one that works on civil defense (civil cases), or perhaps just one lawyer for the entire organization.
I have no idea of the size of UNITY's legal department. I can't find out how big it is with my current resources either.

It may have nothing to do with the lawyers and everything to do with the Board. It could be developers, lawyers, and others are yelling their heads off against the move, but the Board decided to do it anyways. I don't know, it's hard to know what's going on in their business decisions.

In trying to find out I have read some interesting things though, for example that around 9 years ago two execs wanted to sell Unity to Microsoft (deal fell through) and that in relation to the move that just occurred recently there are RUMORS (and that's exactly what they are...Rumors...nothing substantial says this and I've seen no evidence) that a large motivator for this was that they wanted their chunk of Genshin Impact money.

My biggest concern right now...though...ironically, has nothing to do with business. I have Subnautica on a console. Am I going to be able to install it on the next generation of consoles (as long as they are backwards compatible) without having to pay a fee? Yeah...I'm cheap like that.

 

[Dannyalcatraz]

In my experience, the "one job" of a lot of in-house counsel is just coming up with new and inventive ways to say, "No."

It’s also a common practice for city attorneys, ESPECIALLY those in small towns these days.

 

[Paul Farquhar]

I don't recall the city rebelling so much as Lando.

Lando was the leader, he gave the order, but once given the city guards did not hesitate to open fire on the stormtroopers.

 

[fluffybunbunkittens]

I think that rumor was debunked

It was Elon himself saying it two days ago.

needed to reduce its share price some more to attract a buyout, I wouldn't put it past him to psych out the user base.

If they could enrich themselves by screwing their company over, they would, but also... not everything is part of a plan, some of it is just a bunch of dummies high on their own hype juice stumbling into the worst ideas possible and thinking they are the best ever because it's their idea.

 

[Snarf Zagyg]

I think that rumor was debunked, though if Elon Musk wanted to sell off Twitter, and needed to reduce its share price some more to attract a buyout, I wouldn't put it past him to psych out the user base.

I'm half convinced that the CEO of Unity is doing something like that - couldn't sell his own stock well enough so he cooks up a scheme to make Unity ripe for a buyout. Stock is after all mostly worthless if it can't be sold, at least to someone who just wants to enrich themselves.

I wanted to leave this be ... but I just couldn't.

I am not sure where this idea came about, but it's something I've heard a lot of, and it makes absolutely no sense. This is Econ 101.

Acme, Inc., has 100 shares of stock.
Bozo owns 60 shares of the stock (he is the majority owner).

Acme is currently trading at $10 a share. That means if someone wants to buy out Bozo, they would need to pay Bozo $600 for his shares.

What you are saying (and what others say in other circumstances) is that what Bozo really wants is to drive down the shares to $6 a share, so he can sell them for ... wait for it ... $360.

This is the part what someone posts the underwear gnomes and writes, "PROFIT!!!!!"

That's not how the stock market works. It's even less understandable when you have people like the Unity CEO, who is likely also receiving compensation partly in stock options, which only make money when the stock goes up. And in terms of stock that he holds outright, of course he wants the highest possible value for it.

Driving the stock price down only helps potential buyers, not the seller. I truly don't understand why this idea has taken hold. Again, these are publicly traded companies, which means that at any given time the shares are freely transferable at the price point they are trading.


(For reference, according to public documents, Unity's President and CEO hold approximately 3.2 million shares. That is less than 1% of the approximately 383 million shares outstanding as of summer 2023).

 

[Ryujin]

I wanted to leave this be ... but I just couldn't.

I am not sure where this idea came about, but it's something I've heard a lot of, and it makes absolutely no sense. This is Econ 101.

Acme, Inc., has 100 shares of stock.
Bozo owns 60 shares of the stock (he is the majority owner).

Acme is currently trading at $10 a share. That means if someone wants to buy out Bozo, they would need to pay Bozo $600 for his shares.

What you are saying (and what others say in other circumstances) is that what Bozo really wants to drive down the shares to $6 a share, so he can sell them for ... wait for it ... $360.

This is the part what someone posts the underwear gnomes and writes, "PROFIT!!!!!"

That's not how the stock market works. It's even less understandable when you have people like the Unity CEO, who is likely also receiving compensation partly in stock options, which only make money when the stock goes up. And in terms of stock that he holds outright, of course he wants the highest possible value for it.

Driving the stock price down only helps potential buyers, not the seller. I truly don't understand why this idea has taken hold. Again, these are publicly traded companies, which means that at any given time the shares are freely transferable at the price point they are trading.


(For reference, according to public documents, Unity's President and CEO hold approximately 3.2 million shares. That is less than 1% of the approximately 383 million shares outstanding as of summer 2023).

Right. The logic only works if the CEO wants to short Unity stock which doesn't make any sense, because he owns a metric butt-tun of it already. He'd be losing on his long term investment, in order to make a very short term profit.