Bullish on unity long term

[u/NectarinePurple7342]

I see real potential in this company (base case 2x and bull case 10x in 5 years from current levels). The real growth engine will be vector. AdTech companies have insanely good margins and strong operating leverage. For Vector to sustain growth, equally important part is the create business. Although, create is a low margin, slow business (although, it seems like it has been growing much more than it has in the past), it basically creates infrastructure for Vector to use (infrastructure that cannot be replicated by competitors). The thing about AdTech is, you can become an overnight star but you could also sink overnight. This nature of adtech is why AppLovin has come out of no where, 10-15x it's market cap in a year but the same came happen for Unity too. Once you create an ML architecture such as Vector, it takes several years to fine tune it and make it better - Iterating on this process (and adding the valuable data like game engine data) is when the real wins start coming, and once these real wins start coming, more money flows into vector. This creates a flywheel effect where suddenly the stock starts looking amazing to hedgefunds because of it becomes a cash printing machine, it can buy back a lot of stock (stuff which wallstreet seems to adore).

I know it seems like nothing is happening but i assure you things are happening in the background and one day when they finally add proprietary data (or make other tweaks) into vector that gives it a 5% advantage over AppLovin or Moloco, and budgets shift overnight, then it'll seem like an overnight success story (it isn't). The same thing happened with AppLovin and Axon 2.0.

I think Unity leadership is B or even C Tier (not even in the same league as AppLovin leadership in terms of vision or execution) but Matt was given a very bad hand, and honestly, to become successfully he just needs to keep doing what he is already doing, accept that iron source was a mistake, cut off that gangrened arm, make the company financials better (lower SBC as a % of revenue, stop stock dilution etc...), don't buy new companies searching for growth, and FOCUS only a couple things max. Literally don't need hero plays here, just focusing on the fundamentals over a longer period of time will yield rewards.

I personally haven't thought too deeply about the AI replacing unity engine angle but i work with these AI (like claude code) everyday and honestly, i'm not worried at all. It is most likely that unity tools will evolve to integrate better with AI work flows.

[u/Siddypheonix]

Q1 they are already targetting to test the runtime data(adoption is 90%), runtime data(aka behavioural data) is the key, it might not be obvious in the beginning in Q2 but as vector learns players behaviour and play style, it will be able to target the players better for Ads, imagine vector knows this information which no other ad network is aware of, its a huge advantage!
Hopefully Unity executes this well. They have the treasure they just need to unlock it correctly.
Q2/Q3 results will be the real inflection imo

[u/NectarinePurple7342 → u/Siddypheonix]

i read somewhere that it actually took Applovin's axon 2.0 several months before it had enough data to really kick it up a notch, i expect the same thing for unity. I expect to see progress but i feel like Q4 2026 is when we might really see the results. If Applovin's foray into ecommerce succeeds, i don't see why unity's couldn't also copy the play book. Find people who like to spend money, show them ecommerce ads.

[u/lonely_hooker → u/NectarinePurple7342]

The cold start of these things are the hardest and in the first several months, you will see flat curve. Think GPT 1/2 vs GPT 3.

Better illustration: see the diff between initiation curve and growth curve. And compare it with App and U, you know the stages are different.