Unity Software (NYSE:U) stock is climbing about 4% after the company announced that its CEO, John Riccitiello, had resigned and would be replaced on an interim basis by a former president of IBM (NYSE:IBM).
In September, Unity, whose platform and software are used to make video games, implemented changes to the fees that it charges developers. In response, a number of developers threatened to stop using Unity’s products.
The CEO Quit
Riccitiello gave up his CEO and chairman positions and his seat on the company’s board yesterday. He had served as CEO of the firm for nine years and had been a former CEO of Electronic Arts (NASDAQ:EA).
Former Red Hat CEO and IBM president James Whitehurst is now the interim CEO of Unity.
Roelof Botha, a member of Unity’s board who works for venture capital firm Sequoia Capital, is now Unity’s chairman.
Riccitiello will remain with Unity in an advisory capacity “to ensure a smooth transition,” the company stated.
According to a recently filed 8K, Riccitiello will continue to receive his full salary and stock benefits until April 9, 2024.
The Fee Change
In September, Unity announced that it would begin charging game developers based on the number of times that their products were downloaded “regardless of whether those installs were legitimate new purchases or whether their games were developed under a different previous agreement with Unity,” The Verge explained.
In the face of the outcry, Unity rescinded the change and decided to allow developers to pay 2.5% of the revenue that they receive for each game that they create.
U Stock Post-IPO Performance
Unity launched its initial public offering (IPO) in 2020 and reported then that its software was used to create 50% of the most popular video games.
However, the company generated an operating loss of $882 million last year. U stock is down about 55% since its IPO debut.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
