Unity Surges as it Unveils AI Marketplace, Expanding Beyond Gaming

Unity, the gaming tool maker, experienced a significant increase in its stock price, rising over 15% to $42.38 per share on Tuesday. This surge followed the company's announcement of a marketplace for artificial intelligence (AI) software, positioning Unity as a platform in the rapidly growing AI industry.

 

Unity's customers, who utilize its game engine software to develop games for various platforms, will now have access to AI software from independent companies like Inworld AI or Polyhive. This software can perform tasks such as generating game dialogue or creating textures and graphics using AI algorithms. AI companies will be able to distribute their software through Unity's Asset Store and charge for their offerings.

Unity's stock price increase coincided with the company's recent focus on the potential of AI. CEO John Riccitiello expressed his belief that AI will have a transformative impact on gaming, making game development faster, cheaper, and of higher quality. In addition to the AI marketplace, Unity has been given an overweight rating and a target price of $48 by Wells Fargo analyst Brian Fitzgerald. The note from Fitzgerald's team suggests that investors may consider Unity's current share price as an opportunity to buy, and it speculates that Unity could expand its business beyond gaming into areas like "digital twins" and other simulation products for enterprises.

 

While Unity has been associated with virtual reality (VR) headset efforts, particularly with Meta (previously known as Facebook), the company's recent focus on AI has redirected attention. Apple recently announced that VR apps created with Unity would be supported on its upcoming Vision Pro headset, further highlighting Unity's relevance in the VR space. Unity's CEO, Riccitiello, expressed his disapproval of the term "metaverse," which Apple avoids using. He considers the word to be loaded and somewhat foolish, as stated in the AP interview.