Unity to Acquire Weta Digital for $1.6 Billion+

Unity to Acquire Weta Digital for $1.625 Billion

Unity has recently announced its intention to purchase Weta Digital, the renowned visual effects firm co-established by Peter Jackson, in a deal valued at $1.625 billion.

Weta Digital’s Impact on Cinema

Even if the name isn’t immediately familiar, the impact of Weta Digital’s work is widely recognized. From the “Lord of the Rings” trilogy to “Avatar” and “Shang-Chi,” many blockbuster films that are considered must-sees in theaters have benefited from Weta Digital’s significant contributions to visual effects (VFX).

The Structure of the Acquisition

Prior to this agreement, Weta Digital functioned as both a team of artists specializing in visual effects and a team of engineers responsible for developing the tools utilized by those artists. Specifically, it is the tools and the engineering teams that Unity is acquiring. The visual effects artistry team will be reorganized as a separate, independent entity.

Personnel Changes and Future Collaboration

Over 275 engineers from Weta Digital will be integrated into Unity. The VFX artists will form “Weta FX,” with Peter Jackson retaining majority ownership. Both companies anticipate continued collaboration, with Unity envisioning Weta FX as a key client within the Media and Entertainment sector.

Unity’s Acquisition of Weta’s Technology

Unity will assume control of the development of Weta Digital’s proprietary tools. These include City Builder, which generates detailed 3D urban environments, Manuka, a custom physics renderer, and Gazebo, a real-time renderer for scene previews. The acquisition also encompasses technology for character rigging, facial animation, motion capture processing, and simulations of natural phenomena.

Insights from Unity SVP Marc Whitten

To understand the rationale behind the acquisition, a discussion was held with Marc Whitten, SVP at Unity.

“Considering the growth of 2D imagery over the past decade,” Whitten explained, “the volume of photos created has increased exponentially. We are now witnessing a similar trajectory in 3D.”

He further noted a key difference: “While I could attempt to take a photograph 10 years ago, modern smartphones employ sophisticated code to enhance the image. However, creating something in 3D remains inaccessible to many. Our goal is to democratize 3D creation by making complex technology more user-friendly.”

Addressing the Growing Need for Accessible 3D Tools

In essence, Unity recognizes a rising demand for simplified 3D creation processes, an area where Weta has dedicated decades of expertise.

Expanding Unity’s Digital Asset Library

The deal includes access to Weta Digital’s extensive catalog of digital assets. This collection, encompassing 3D models, algorithms for simulating effects like smoke and fire, and simulations of animal movement, could be integrated into Unity’s products. However, recognizable intellectual property will not be included.

Unity’s Previous Acquisitions and Cloud Ambitions

This acquisition represents Unity’s largest to date, exceeding the $320 million purchase of Parsec earlier this year. Whitten previously indicated that the Parsec acquisition aligned with Unity’s broader cloud strategy, a theme that continues with this latest move.

The Power of Weta’s Integrated Pipeline

“Weta Digital’s tools form a cohesive pipeline,” Whitten stated. “Each tool is powerful on its own, but their interconnectedness ensures seamless workflow. Changes made in one tool are reflected consistently across the entire pipeline, facilitating collaboration.”

“Our intention is to integrate these cloud capabilities directly into the workflows of artists using software like Maya, Houdini, and Unity itself.”

Cloud Accessibility and Future Integration

“We aim to make this pipeline accessible via the cloud, enabling artists to work from anywhere with a simple connection.”

Deal Completion and Leadership

Unity anticipates finalizing the acquisition in the fourth quarter of 2021. Prem Akkaraju, Weta Digital’s CEO, will lead the newly formed Weta FX, while Joe Marks, Weta Digital’s CTO, will join Unity as CTO of Weta Digital.