Unity Technologies sees big opportunities outside of video games

John Riccitiello, CEO of
game engine maker Unity Technologies, sees a big long-term
opportunity for his company outside of the video game
industry.
Steve Jennings/Getty Images
for TechCrunch

• Unity Technologies offers the most popular software used to
  develop mobile video games.
• But the company’s long-term future lies outside the game
  industry, company CEO John Riccitiello told Business Insider.
• The company’s tools are already being used to do things such
  as offer virtual tours of new buildings and real-estate
  developments.
• But its opportunity outside the game industry isn’t a sure
  thing; it already faces competition from companies that have long
  catered to the types of enterprise clients that Unity is
  targeting.

There’s a good chance that the last mobile video game you played
was powered by Unity Technologies, the 3D engine used in most of
the industry’s smartphone games, from “Pokemon Go” to “Super
Mario Run”

But if Unity CEO John Riccitiello’s bet pays off, you could soon
end up benefiting from the company’s software when you repair a
leaky pipe in your house, customize your next car, or get a
preview of your next house.

Riccitiello, who took the reins at Unity four years ago, believes
that traditional businesses— such as construction, car design,
and film making — will eventually replace video games as Unity’s
main customer base and source of revenue. 

That’s a bold prediction coming from a veteran of the game
industry —Riccitiello served as President of gaming giant EA in
the late 1990s and served as CEO from 2007 to 2014, a span of
time in which EA’s annual revenue swelled into the billions of
dollars.

“There’s a massive amount of interest from a bunch of different
industries,” Riccitiello said in an interview last week with
Business Insider.

Unity offers a development environment that’s designed for
creating virtual three-dimensional spaces. It started off in the
mobile world, and more smartphone games are made with its
technology than with any other gaming engine, according to the
company and analysts.

But it turns out that the same tools that can be used to create
3D mobile games can also be used for other applications. Unity
started to take an early lead among developers of virtual and
augmented reality apps, for example. And because its tools can be
used to create virtual objects, structures, and worlds, they can
be used to do everything from offer virtual tours to allowing
consumers to customize products such as bicycles or cars.

This use of Unity’s software outside of gaming is just getting
started, Riccitiello acknowledges. And it’s unclear how long it
will take before the company see significant revenue from outside
the gaming industry. But he insists it will happen eventually.

Riccitiello thinks Unity’s software could be the next Photoshop

He compared Unity’s development tools to Adobe’s Photoshop. After
it launched in 1990, Photoshop first got traction in the fashion
industry, Riccitiello said. People criticized and made fun of the
industry for using it to digitally alter pictures of models to
hide their flaws or to make them skinnier.

“Pokèmon Go” is just one of many games that were built
with Unity’s software.
Niantic

Now, nearly 30 years later, Photoshop is the core piece of
Adobe’s business and is used by companies in basically every
industry, Riccitiello said. Companies need to be on the web,
which means they need a tool to edit the pictures they post on
their sites, which leads them to get Photoshop, he said.

“It’s everywhere,” Riccitiello said.

The same will eventually be true for tools like Unity’s that
allow companies to create applications with 3D images and to
build environments that can be rendered in real-time, he said.

“Real-time 3D is going have an arc that’s not unlike Photoshop,”
he said. “You’re going to need it for just about everything.”

In the near term, Unity is biggest opportunity outside of gaming
is likely in areas such as architecture, construction, and
engineering, Riccitiello said. Workers in those industries have
long been working with computerized 3D models and related tools,
he said.

Riccitiello declined to make any concrete predictions about when
Unity’s software would reach the same kind of broad adoption as
Photoshop, saying only that he didn’t think it will take as long.

“If you ask in me in 20 years, I know that other industries will
be bigger” for Unity than the gaming industry, he said. “If you
ask me in five years, I’m not sure.”

But some industry analysts aren’t convinced that the opportunity
for Unity outside gaming will be as big as Riccitiello expects.

Unity faces lots of competition outside of the games business

Much of the expected use of Unity’s tools outside of gaming will
be to create augmented- and virtual-reality apps and experiences.
Augmented reality involves the layering of virtual information
and objects over real-world views. Experts on the technology
think it could be used to offer tourists information about the
cities they visit as they walk around them and to allow customer
service specialists to remotely help consumers fix plumbing or
equipment problems.

In some cases, augmented-reality applications will need to be
able to display three-dimensional virtual objects, said Lewis
Ward, a research director at IDC, a tech industry consulting
firm. Unity’s tools will come in handy on those. But many AR apps
will only need to be able to display text or two-dimensional
images, he said.

“If you’re only overlaying data on a screen, you don’t really
need a game engine,” Ward said. “You can use a much simpler piece
of software.”

Unity might find find more opportunity with companies looking to
build experiences that are closer to virtual-reality, in which
users are completely ensconced in an artificial environment, Ward
said. Virtual-reality experiences are very similar to video games
and rely on similar tools, he said. And Unity, whose software
supports many of the VR headsets on the market, has an early lead
in the business of virtual-reality development tools, Ward said.

Creating virtual worlds is “what a game engine does really well,”
he said.

However, even if they are interested in making apps with
three-dimensional objects and virtual worlds, non-gaming
companies could be reluctant to rely on Unity’s tools, said Marty
Resnick, a research director at Gartner, another industry
consulting firm. Enterprise companies tend to be conservative
about adopting new technologies and frequently stick with their
established partners.

And those partners are doing what they can to convinces their
clients to stay with them, even as they begin to experiment with
augmented reality. Oracle, Kony, Mendix, and other firms that
specialize in helping enterprises develop apps are building tools
into them to allow customers to add AR features, noted Resnick.

“That’s what Unity’s competition is going to be” as it tries to
make headway out of the game industry, he said. He continued:
“There’s a comfort level with existing enterprise software
providers.”