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Shares of game development software provider Unity (U) rose more than 7% in the Tuesday premarket after the company announced it is parting ways with its CEO, John Riccitiello. Investors welcomed the decision, hoping it could tame the backlash against Unity triggered by Riccitiello’s controversial pricing change unveiled in September. 
 

Riccitiello Steps Down as CEO and Chairman

John Riccitiello, CEO of gaming software maker Unity, is stepping down from the company less than a month after his controversial pricing change that angered numerous developers. Unity’s shares popped 7.7% in the premarket on the news at the time of writing.

According to a Monday press release, Riccitiello will step down as both CEO and chairman of Unity and leave the company’s board. James Whitehurst, former CEO of the software company Red Hat, will become Unity’s interim CEO. Unity Board’s lead independent director, Roelof Botha, will be chairman. 

The video game software development company said it will initiate a search for a permanent CEO. In the meantime, Riccitiello “will continue to advise Unity to ensure a smooth transition,” the company stated

Before today’s premarket rise, Unity’s shares closed down 1.5% on Monday at $29.70. The stock witnessed an impressive turnaround in 2023.
 

The Pricing Change and the Backlash

Riccitiello’s departure comes several weeks after Unity, under his command, unveiled a pricing scheme that would charge developers on a per-install basis for games that meet specific download and revenue goals.

The announcement led to an immediate backlash from developers who use Unity’s game engine to create video games. Notably, a consortium of developers issued a public letter arguing the pricing shift “jeopardizes small and large game developers alike” and was “made without any industry consultation.” 

Eventually, Unity responded to the backlash, acknowledging the discontent and confusion the new pricing scheme caused. In turn, the company adjusted its update to appeal to developers.

“We are listening, talking to our team members, community, customers, and partners, and will be making changes to the policy.”

– Unity said at the time.

Whitehurst, who will replace Ricitiello as interim CEO, has extensive experience in the software industry, having served as an IBM executive and CEO of Red Hat. This IBM subsidiary makes open-source software products for enterprises. It remains to be seen whether Whitehurst can help Unity regain developers’ trust after many gaming studios threatened to ditch the company’s engine after Ricitiello’s pricing policy was announced last month. 

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