Unity shares plummet as downbeat forecast sparks fears of a demand slump

SelfRugger · 2026-02-11T15:08:39+00:00

Unity Software's shares fell nearly 30% after the company forecasted first-quarter revenue below expectations, sparking concerns about decreased demand. Fears of AI technology from Alphabet replacing game engines further pressured the stock.

SelfRugger

2026-02-11 15:08:39

Abstract generation in progress

Unity shares plummet as downbeat forecast sparks fears of a demand slump

Reuters

Wed, February 11, 2026 at 11:44 PM GMT+9 1 min read

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Feb 11 (Reuters) - Shares of videogame engine maker Unity Software dropped nearly ‌30% on Wednesday after the company ‌forecast first-quarter revenue below Wall Street expectations, signaling sluggish demand for its software.

Unity expects revenue between $480 million and $490 million for the first quarter, below analysts’ estimates of $492.1 million, ‌according to data ⁠compiled by LSEG.

The firm’s shares have taken a beating this ⁠year largely due to fears that new artificial intelligence technology from Alphabet’s Google, capable of generating interactive worlds, could replace a ‌lot of work done by game engines in the future.

This is in sharp contrast to its stock performance last year, when share prices nearly doubled as ‌investors bet on Unity’s strong positioning in the videogame software market and a recovery in mobile ‌gaming.

While the Unity engine is mostly known for videogame development, it has evolved into a platform that can be used ‌for simulations, filmmaking and digital modeling.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Jonathan Ananda)

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