Catenaa, Wednesday, February 11, 2026- Unity Software stock fell by nearly 30% on Wednesday after the company forecast first-quarter revenue below Wall Street expectations, signaling sluggish demand for its software.
The video game engine maker 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.
Unity reported adjusted earnings of 24 cents a share for the fourth quarter of 2025, ahead of analysts’ consensus estimates of 21 cents, according to FactSet. Revenue totaled $503.1 million, up 10% from last year and above Wall Street’s call for $492.8 million.
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 video game software market and a recovery in mobile gaming.
While the Unity engine is mostly known for video game development, it has evolved into a platform that can be used for simulations, filmmaking, and digital modeling.
Unity Software stock is down by over 54% so far this year.
