In 2021, Unity Technologies acquired software tools, pipeline, technology, and engineering talent from Lord of the Rings director Peter Jackson's Oscar-winning visual effects studio Wētā Digital in a deal valued at $1.63bn.
At the time, Unity’s stated goal was to “put award-winning VFX technology in the hands of millions of creators and artists”. This sounds a lot like a suite of prosumer tools. As recently as August 2023, they touted plans to “deliver the most widely used and trusted solutions for artists to collaborate and create 2D and 3D content… designed to make high-end VFX production and premium content creation accessible to creators.”
Some commentators saw the deal as an effort to establish Unity as a major player in the professional M&E market, which is, of course, a much smaller space than the prosumer market.
Either way, it was never going to work.
A great myth of the $10Bn VFX industry is that the awe-inspiring imagery you see on the screen in movie franchises like Avatar, Avengers and Star Wars is created principally by clever technology. The term “computer generated imagery” fuels this misconception, as my colleague Anthony Kramer and others have pointed out. It’s a bit like saying “keyboards write essays” or “pianos play music”. What these tools produce depends, to a very large degree, on the person using them.
To believe that award-winning visual effects are created by computers is even more absurd when you understand the true complexity of the work. At studios like Wētā, visual effects are created by large – often very large – teams of highly specialized professionals. They collaborate in proprietary technology pipelines, in which tools are held together (often rather loosely, on a project-by-project basis) by software “glue”. These pipelines grow organically out of the shared institutional knowledge of that studio; no two are exactly alike. While there is both excitement and trepidation at the promise of AI, this technology will merely be another tool in the hands of those artists for the foreseeable future.
Timoni West, vice president of product for Unity Wētā Tools, was quoted in an interview in August 2023 saying, “We’ve been really just doing the work over the last year and a half, trying to figure out what best we can take from that acquisition. The tools are very successful. They’re used on hundreds of different movies and films today…. But figuring out what we can extract and start to really productize… for our next service is what this is. The idea is to take this technology and figure out how it can be used for other studios, for games, for any kind of interactive content... to take what is used for high-end art and figure out how to make it accessible for everyone.”
With the Wētā deal, Unity purchased an orchestra’s instruments -- without the orchestra. To be fair, they also acquired the engineers who make and maintain those instruments and signed a service contract with the orchestra to allow their musicians to keep playing them. But the real goal, it seems, was to take innovations in the design of those instruments and help millions of musicians around the world be better players.
I don’t mean to suggest there was nothing to gain here. If Unity intended to acquire patents and ingenious technology solutions, they would not have been disappointed.
At the same time, these tools were not built for a prosumer market; they were built to produce world-class music in the hands of professional musicians. And not just any musicians – musicians who had been playing together in one specific orchestra for years.
It’s rare for a tool developed inside a VFX studio to succeed as a commercial product. Compositing software Nuke is one success story. Nuke was developed at visual effects studio Digital Domain (and won Digital Domain an Academy Award for Technical Achievement in 2001). It was subsequently sold to software developer Foundry, who took over the development and marketing of the software. Nuke is now the most widely used compositing software in film and television visual effects. Who uses it? Professional visual effects artists, of course, along with students training to become professional visual effects artists. (Adobe’s After Effects is, arguably, the prosumer equivalent, although it has seen a fair amount of professional use in visual effects too.)
Tools developed by a studio for internal use tend not to have much care lavished on the user interface, documentation, or testing that makes them robust enough to use without ongoing support from an in-house dev team. This provides a clue as to what Wētā got out of the deal (aside from the $1.63bn). They essentially outsourced development and support for their proprietary tools to a very capable technology partner. Unity’s capability to develop, distribute and market commercial software was certainly greater than Wētā’s too. But still, it seems, not enough.
In November 2023, Unity terminated their agreement with Wētā, along with 265 Unity employees – the engineering teams acquired from Wētā as part of the deal -- in a move designed to “refocus [Unity’s] efforts on the core business”.
For their part, the visual effects studio now called Wētā FX is rehiring those engineering teams, who were formerly employed by the Wētā Digital entity. According to their press release, Wētā FX will go back to “getting support for its use of the Wētā Tools directly from its own crew – a shorter path which makes sense for both companies.”
The notion that movies like Avatar are created by brilliant technology, and that this technology can be productized for wider use, is a very appealing thesis for investors and technology firms. But it represents a profound misunderstanding of the role that technology plays here. The visual effects industry of today is still fundamentally a creative services industry, in which value is created by the hard work of thousands of talented visual effects artists around the world.
