Unity cancels runtime fee, Stifel raises its price target

Stifel analysts have raised their price target on Unity Software (U) stock to $25 per share. Unity eliminated its runtime fee that charged developers per download of games built on its platform.

Market Domination anchors Julie Hyman and Josh Lipton report on this news.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Luke Carberry Mogan.

Video transcript

Now let's get to some calls of the day sponsored by Tasty Trade Stel raising its price target on Unity software from 20 to 25.

The note highlight the company's reversal of its controversial run time fee.

Uh, so by way of background here What?

Bloomberg points out.

Julie, uh, company reported plans, I guess, to change its pricing model, including cancelling the so called runtime fee for games customers reverting to a seat based subscription model.

Unity Pro subscription prices are gonna increase 8% to $2200 annually per seat.

Unique enterprise P prices go up 25% effective January 1st Steve, alas, dug into this, obviously like what they saw.

Yes, and one of those analysts, uh, was over at steel here.

Or or you just said CL never mind I I It's my brain.

On Friday, I thought What What the analyst, uh Jay Parker Lane wrote, was interesting here.

Um, and by the way, this all seems to be a positive referendum on the relatively new CEO Matt Bromberg, who is the one who made this decision?

Um so, as Lane writes, the company's announced runtime fees certainly seemed to be an opportunity to take more price as customers find success with games created in U unity.

But he says the reputational juice was seemingly not worth the squeeze for the company.

In other words, the run time fee was go, bringing more in, theoretically to the door of unity.

But it made everybody mad.

So then they they got rid of it, which he says is more straightforward.

And it's good news.

Yes, says it allows the company to move forward and regain its status as a trusted partner to the game.

Industry has not been easy.

Being a Unity Bowl stock is down about 50% this year.

Yeah, it did rise almost 10% yesterday when they announced this and then the positive reaction just kept coming today and the stock continued to rise.