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Creators of Slay the Spire will migrate their next game to a new engine if Unity doesn't completely revert their changes (nitter.net)

submitted 10 months ago by [email protected] to c/[email protected]

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[-] [email protected] 237 points 10 months ago

Is it just me or are all big companies killing themself right now?

[-] [email protected] 159 points 10 months ago

Yeah, inflation rate is high, so central banks are trying to counteract that by basically slowing down the economy, so that our normally scheduled inflation countermeasures kick in appropriately. Well, and the usual way to slow down the economy is to make it more costly to loan money, i.e. increase interest rates. Which means investors can't just pump money into any company anymore, they want that money to actually pay out to cover those interest rates. And that means companies need to actually be profitable to get money to finance their operation.

[-] [email protected] 96 points 10 months ago

So does that mean all these businesses were always doomed to fail anyways, just living on borrowed money/time, and now the bill comes due, they’re all fucked?

[-] [email protected] 62 points 10 months ago

Kind of. In the past investors were willing to be more patient, and company values were artificially high, because they were based on potential profits rather than actual profits. That's shifting a bit as interest rates go up.

[-] [email protected] 55 points 10 months ago

Simplified: If you can borrow 1 Million USD for 0% apr and earn 1000 USD with that, you have 1000 USD in profits. Now change the apr to 5% and you are 49,000 USD in the red.

[-] [email protected] 23 points 10 months ago

Eh. Most of these companies were profitable. Just not seeing the exponential growth that the stock market dictates when interest rates are high. Unity, not so much, but its revenue was always fine, its just a really poorly run company. Who knows where they piss the kind of money they are pulling in to.

[-] prole 22 points 10 months ago

Welcome to capitalism.

[-] [email protected] 19 points 10 months ago

A lot of the wealth created by venture capital and the service economy were only ever possible with the help of what is essentially free money. With the increase in interest rates and the collapse of a major venture capital bank, those corporations dependent on low interest payments are going to collapse as well.

As interest rates climb and venture capital dries up, the companies who were just scraping by, or dependent on debt loading during development have had their runway cut short.

We are getting to the point where companies aren't going to be utilize fronting a huge amount of debt as a strategy for long term growth.

Unity looks to be one of the companies who wanted to utilize the slow boil tactic perfected by the likes of Google or Amazon. Where they front the cost of tons of free and convenient services, hoping that companies become dependent on them, slowly creating fees over time until they become profitable.

If I were a guessing guy, they've hit the end of their run way, and have failed to secure a new injection of capital sufficient enough to make the payments on their loans. Likely their options have come to find a way to make your payments, or you'll be giving your entire operation to a bank.

[-] [email protected] 6 points 10 months ago* (last edited 10 months ago)

I'd guess that companies that failed to turn profit when money was cheap are most likely doomed. However not all of the hype companies are like that. Some could be barely profitable, but shareholder pressure might push them to heavier monetization practices.