In 2021 Unity Bought A Part Of Weta For $1.6 Billion. This Week They Closed Weta Digital And Laid Off 256 People

In 2021, in a shock move that surprised many in the industry, Unity announced it would be buying Weta Digital for $1.625 billion. With this purchase, Unity acquired Weta's VFX tools and tool development division, including hundreds of designers, programmers, and engineers from Weta and film director, Peter Jackson. This week, as a continuation of Unity's incredibly fraught 2023, Unity has announced that they are closing Weta Digital, laying off 256 employees, exiting the movie VFX business, and terminating all future contract agreements with Peter Jackson's newly formed Weta-based film division, Wētā FX. The layoff of 256 people represents approximately 4% of Unity's workforce. This compounds layoffs that Unity made in May which saw over 600 people reportedly fired, or 8% of the company's workforce at that time.

Now, the initial reporting on this decision by Unity was incredibly confusing and rife with errors. At the heart of why some publications needed to issue retractions and updates is the general misunderstanding that Weta Digital, what Unity formerly owned, represented Wētā FX, the premier special effects studio associated with Peter Jackson. To address that point of confusion, here's a brief paragraph by gamedeveloper.com that clarifies that issue:

On November 9, 2021, Jackson sold the company's VFX tools development division to video games software company Unity Technologies for US$1.625 billion. Unity's acquired tech assets of Weta will be called Weta Digital, while the visual effects company remained separate and renamed as Wētā FX. The acquisition was completed in December 2021. In April 2022, Wētā FX opened a new studio in Vancouver. It is the company's first dedicated VFX studio outside New Zealand.

Unity's reasoning for this decision is that the company wishes to refocus its portfolio back into games development and away from other enterprises, such as film-making and movie special effects. In terms of the impacted employees, Jackson and Wētā FX made it immediately known that they would be working to re-hire every single laid off employee. In fact, the official statement from Wētā FX in response to this news is:

On November 25, 2023, Unity and Wētā FX mutually agreed to terminate Unity’s service agreement with Wētā FX effective December 10, 2023. This decision comes as Unity refocus their efforts on their core business. The termination of the agreement will see the reduction of 265 Unity roles. Wētā FX will be extending offers to as many of the team as possible as it looks to expand its research, development and support functions. Unity will retain ownership of the technology it acquired from Wētā in December 2021 and will be evaluating the best way to enhance its offerings with it over time. The technology will also remain fully available to Wētā FX. Wētā FX will continue to build and extend the IP, and develop its own tools and techniques, to continue its evolution as a leader in visual effects.

With that, Peter Jackson is effectively regaining all the divisions of Weta he sold to Unity with the only difference being that the tools and technology that Weta traditionally use are no longer theirs. Things are notably worse for Unity which continues to signal that even with the ousting of John Riccitiello that it is on uneasy financial footing.

The fact that they shuttered the unit instead of spinning it off or selling it to someone else shows that either they massively overpaid or it or mismanaged it or both.

The trend of "company buys other companies only to shut them down relatively soon" is always baffling to me.

This year I spent $30 on a pair of earbuds only to lose one within like 2 weeks. If I had instead spent over a billion I would have felt even worse than I already did, which was pretty bad!

Spend $1.6 billion to figure out whether you should compete with Unreal in the film industry using an engine not known for groundbreaking technology, make zero progress, change your mind, take it out on customers instead, cause the entire industry to rally against you, release the ceo, fire hundreds of people... that's quite an impressive experiment.

Unity - noun
The state of being united or joined as a whole

@cikame: What has united game developers and people who follow gaming news more this year than being mad at Unity and thinking it's run by morons?

It's called truth in advertising.

You feel bad about misplacing one of a $30 pair of earbuds, meanwhile these guys don't seem to feel bad about losing *pulls out calculator* the equivalent of around 54.2 million pairs of $30 earbuds.

In all seriousness, there were people back when this latest Unity thing was first starting up again a few months back saying "Hey, Riccitiello isn't the only extremely shitty person at the top at Unity. Most of the other top people are just as bad if not worse." and this news seems to confirm that. A bunch of people who seem incapable of flexing their business guns without shooting themselves in the feet and causing a bunch of collateral damage.