Video Game Billionaire: Soaring Stock Makes Unity Software CEO Super-Rich

Sometimes, it’s just the second time that’s when the magic happens. It’s true with Unity Software CEO John Riccitiello, the man who Forbes claims has become the industry’s latest video game billionaire due to its rising shares, just eight years after his infamous resignation from the gaming firm Electronic Arts.

Unity hired Riccitiello, and the San Francisco-based software maker used to create hit games like Pokemon Go, Among Us, and Overcooked, as the company was the CEO in 2014. The age-old Riccitiello is currently worth $1.4 billion, thanks to the rapid growth of Unity shares, which have nearly tripled in the time since Unity’s IPO in September of 2020. Riccitiello holds 3.5 million Unity shares. He also has the option to buy almost 2.8 million shares more and has amassed around $215million (after-tax) from previous transactions of Unity and EA stock.

Riccitiello’s fortunes have been buoyed after the announcement of Unity’s largest acquisition to date: the division of technology of Weta Digital, the visual effects studio founded by Lord of the Rings director Peter Jackson, for which Unity will pay $1.625 billion, both in cash and shares. The shares of Unity have increased by 15 percent to $197.55 after the news of the deal. It has also created a billionaire from Jackson. The Icelandic-born David Helgason founded Unity in 2004 before stepping from the position of the CEO in October 2014 to make way for Riccitiello and has also been a billionaire as co-founder and chief technology officer Joachim “Joe” Ante from Germany.

Essential to understanding Riccitiello’s achievements in Unity is his background in EA, one of the largest gaming companies around the globe. After graduation in 1981 from the University of California, Berkeley in 1981, and working for more than two decades working for various consumer products companies, including Clorox, PepsiCo, and Sara Lee — the Pennsylvania native became a part of EA as the company’s president and chief operating officer in 1997.

Riccitiello was the leader of the company during an era of rapid growth, characterized by its experiments with the latest console technology and hugely loved games such as Madden and FIFA, and FIFA, but he left in 2004 to start his venture: the private equity company Elevation Partners, which he co-founded with technology investment Roger McNamee and rockstar Bono. Riccitiello was the head of the division of video games. (Elevation Partners was a shareholder within Forbes Media LLC.)

When Riccitiello was re-appointed as CEO of EA after his 2007 appointment as its CEO, Riccitiello quickly acknowledged rapid changes to the company’s business triggered by the advent of digital gaming. Despite multiple attempts to move to the mobile age and drastic cuts in costs, EA stock didn’t recover from the rout it endured in the market’s 2008 crash. The stock plummeted by nearly two-thirds during Riccitiello’s six years as CEO of EA and was terminated in March of 2013.

In a letter addressed to workers, Riccitiello claimed “100 percent” of the blame for the poor performance in the last quarter but claimed that EA was “never been better place as a business.” Although his legacy was a bit splintered, experts (for most of the time) agreed. “I believe that the only mistake he made was the high cost of his acquisitions,” mused Wedbush Analyst Michael Pachter in 2013, “but even these acquisitions resulted in an impressive social and mobile business, as well as several legitimate franchises.”

In the year following, Riccitiello took the helm of Unity. According to the company, the cross-platform game engine has become popular with independent studios and has reached more than 600,000 developers per month. Since he was appointed the company’s CEO, some of the hits made with Unity software have included the viral sensation Pokemon Go; Unity also integrated its games into content made for Facebook’s Oculus. Before its IPO in September of 2020, Unity had raised more than $718 million following Crunchbase and an estimated value in the region of $6.5 billion. This figure more than tripled after Unity’s IPO resulted in $1.3 billion, which boosted the value of its stock to $13.7 billion.

While posting huge losses–the company isn’t profitable and has lost $282 million in 2020 despite revenues of $772 million. However, the company has also boasted impressive sales growth and skyrocketing the price of its shares amid the increasing demand for mobile gaming and virtual reality. It has beaten Wall Street expectations and reported revenue of $286 million in the 3rd quarter, which ended September 30, a rise of 43% over the same quarter in 2020. Unity states that it used its program to create 71 percent of the top 1000 games for mobile and 50 percent of games for console, PC, and mobile in 2020.

Riccitiello has been the driving force behind an active campaign to ensure that Unity is on the cutting edge of technological advancement, as demonstrated by its recent series of acquisitions. This includes RestAR, a deep-learning and computer vision firm, and Pixyz, a 3D preparation and optimization program. He believes that the purchase by Weta Digital will help with Unity’s quest to create an ‘ethereal’ world, which is a reference to the buzzy and vaguely defined term used to describe the digital realm where users interact with avatars.

“What we’d like to achieve is for an average teenager capable of doing the same thing as Peter did when he created Gollum and placing that character in the metaverse,” Riccitiello told The Wall Street Journal of the partnership.

However, his time in the company of Unity was not without its share of problems. In 2019, Riccitiello was identified as a defendant in a case brought by the former vice director of talent acquisition Anne Evans, who claimed Riccitiello, together with others on Unity’s management team, publicly discussed women employees sexually and engaged in relationships with the women. Evans further claimed Riccitiello was a sex-harassment peddler who manipulated her and her direct employees to have sex.

Evans claims that she was dismissed in retaliation to reporting the allegations of sexual harassment. Unity did not believe this and instead stated her resignation due to “serious infractions” exposed in a “third-party probe.” Unity also denied claims regarding Riccitiello and other employees of Unity management, stating that it will “vigorously fight back against false accusations.” The matter is waiting to be heard before a California court.

SEC reports from Unity say that Riccitiello’s wife–described by a Unity spokesperson as the former Unity Software Chief People Officer Elizabeth Brown–held around 1.4 million options in the last year but was selling and exercising them regularly. She currently has approximately 477,000 possibilities that are worth around $93 million. Evans stated in her suit she was aware that Brown and Riccitiello were involved in a relationship that was sexual from the year 2016, at the time that Brown was an employee within the company (she was fired from Unity at the end of November of 2019).

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Adam Collins
Adam writes about technology, business and economics. With master's degree in Economics, he's presented six papers in international conferences. As a solivagant in the constant state of fernweh, curiosity is the main weapon in his arsenal.

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