During its annual developers' conference on Monday, Apple (NASDAQ:AAPL) said it is working with Unity Software (NYSE:U) to bring 3D apps to its new mixed reality headset, Vision Pro. The news sent shares of Unity surging higher by 17%.
Commenting during Apple’s WWDC, Susan Prescott, VP Worldwide Developer Relations, said, “We know there is a community of developers who have been building incredible 3D apps for years. Today we are excited to share that we’ve been working with Unity to bring those apps to Vision pro. Popular Unity-based games and apps can gain full access to Vision OS features, such as pass-through, high-resolution rendering and native gestures. And because these Unity apps are running natively on Apple Vision Pro, they can set side by side, rendered simultaneously with other Vision OS apps.”
Commenting on the development, Piper Sandler analysts said Vision Pro could help reinforce the longer-term Unity vision and strategy to become a developer platform of choice for 3D applications.
“Formal support for the new Apple Vision Pro spatial computer drove U shares up >10% intraday. While the initial volumes in 2024 for Vision Pro might be tempered given the list price of $3,499, we see new product launches as positive catalysts that can help recast U in a new light beyond advertising (60%+ of sales),” said analysts.
Morgan Stanley analysts think benefits for Unity will take time to play out and depend on how successful Apple's augmented-reality headset is.
“…we expect that U will play an important role in creating new content for Vision Pro, particularly for (but not limited to) games. That said, we note that U’s engine pricing model is a seat-based subscription, which we estimate generated ~$500mn of revenue in ‘22 (36% of total) based on ~340k paying subscribers. We believe this subscriber base is largely driven by ~75% penetration of the mobile game development industry, which is significantly more scaled and mature than VR/AR is today. While we could see more studios directing efforts towards mixed reality content, we view incremental growth in U's subscriber base (and therefore upside to U growth estimates) as a call option that will likely take time to play out...and ultimately depends on the success of Vision Pro in addition to other hardware platforms,” said analysts.