This happens all to often though. Small company comes out swinging to upset the status-quo, essentially poking the bear.
From there it either plays out one of two ways depending on how competent the management of the incumbent is.
1. They underestimate and continually disregard the startup. This generally leads to AMD vs Intel situation. Don't do this.
2. Understand the threat they pose and systematically match all of their advantages, smothering them with investment they can't afford to keep up with. This is essentially what Epic did here and generally what you should always do if you have a dominant market position and can afford it.
Unity is left in a bad situation because accessibility to their engine was it's key draw. A few years ago people also felt it was an easier engine to develop games on but that viewpoint has been shifting back to UE4 as of late because of the difficulty studios have had "actually shipping" Unity based titles, let along long-term maintenance issues. In terms of pure quality Unreal has generally (but not always) been on top and definitely in terms of capability and performance.
Doesn't help that Epic has an enormous cash-cow in the form of Fortnite while Unity has next to no income outside of it's in-game advertising business.
They also bet heavily on VR and that hasn't panned out to be as profitable as people thought it would be with the majority of revenue in the VR/AR space being heavily skewed into the enterprise, government and military verticals which aren't where Unity performs well.
I feel like this happened to Gitlab / GitHub as well. Gitlab was gaining a ton of popularity and momentum with their free private repositories and built-in CI testing infrastructure. Then GitHub swooped in and offered all the same things, taking the wind out of Gitlab's sails.
This is the first I've heard the claim that VR/AR revenue is skewed to enterprise and military. Can you share some links on this? I did a search and while I found a lot of discussion of _investment_ being skewed in that direction, I'm having difficulty finding any evidence that revenue is likewise skewed.
Anecdotal from knowing a lot of fellow entrepreneurs in the space that pivoted into things like hazardous environment training, etc don't have any hard supporting evidence sorry. Specifically most of these companies were originally trying to do games and/or consumer AR/VR apps but were forced to pivot due to lack of traction.
For what it's worth, I have a very, very hard time believing that the _revenue_ in the AR/VR space outside of games is even 5% of the total. If it was a big market, you wouldn't see companies like Microsoft and to a lesser extent WEbex etc. floundering so hard with their non-game-focused products. Even 5% seems unbelievable generous given that, for example, Webex Hologram has $0 revenue and Microsoft's DoD Hololens project is all but dead on launch.
I’ve been in the enterprise vr industry for almost 7 years, and you’re correct with your estimate being very close to where I’d put it. The vast majority of revenue is from gaming.
>Doesn't help that Epic has an enormous cash-cow in the form of Fortnite while Unity has next to no income outside of it's in-game advertising business.
Isn't Genshin Impact really, really, really massively profitable? It would be really sad if Unity takes a constant revenue instead of percentage-based off of that lol
From there it either plays out one of two ways depending on how competent the management of the incumbent is.
1. They underestimate and continually disregard the startup. This generally leads to AMD vs Intel situation. Don't do this.
2. Understand the threat they pose and systematically match all of their advantages, smothering them with investment they can't afford to keep up with. This is essentially what Epic did here and generally what you should always do if you have a dominant market position and can afford it.
Unity is left in a bad situation because accessibility to their engine was it's key draw. A few years ago people also felt it was an easier engine to develop games on but that viewpoint has been shifting back to UE4 as of late because of the difficulty studios have had "actually shipping" Unity based titles, let along long-term maintenance issues. In terms of pure quality Unreal has generally (but not always) been on top and definitely in terms of capability and performance.
Doesn't help that Epic has an enormous cash-cow in the form of Fortnite while Unity has next to no income outside of it's in-game advertising business. They also bet heavily on VR and that hasn't panned out to be as profitable as people thought it would be with the majority of revenue in the VR/AR space being heavily skewed into the enterprise, government and military verticals which aren't where Unity performs well.