Unity is reportedly considering spinning off its China business unit to help it expand in the region.
According to a report from Reuters, the engine maker has tapped strategic investors to facilitate the venture, which would value its China business at over $1 billion.
People familiar with the plan said it’s viewed as a way to bring more developers into the Unity fold in China, with the company eager to see its software become more commonplace in the lucrative region — particularly within the industrial design and city modelling sectors.
Unity is also reportedly convinced that a spin-off unit would grant it more ownership and autonomy over how it conducts business in China, particularly as regulations in the country continue to tighten.
When contacted by Reuters, Unity declined to comment on the plans.
A challenging year for Unity
Earlier this year, Unity suggested it would have to endure a rocky 2022 due to “challenges with monetization products” and lowered its fiscal outlook enough to worry investors.
Shortly after, Unity announced a merger with app monetization platform IronSource in a deal that values the company at $4.4 billion. That news rubbed some developers the wrong way for a number of reasons, but many cited IronSource’s brief affiliation with malicious adware as a key concern.
Others suggested the move didn’t serve the best interests of developers and would effectively position advertising revenue as a core pillar of Unity’s business.
Commenting on the news, Unity boss John Riccitiello said the move wold provide developers with a “live creation engine” that can dish out “critical feedback as early in the creation process as possible.” Notably, he also suggested that developers who didn’t want to consider monetisation that early in the process are “pure” and “brilliant,” as well as “some of the biggest fucking idiots.”
Those remarks only proved more incendiary, and Riccitiello eventually backtracked and issued an apology — but not before a Unity spokesperson had suggested his comments had been taken out of context.