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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