William Blair has reiterated its Buy rating on Unity Software (U), following a noticeable decline in the company’s share price that came after a recent announcement from Google (GOOGL). The stock reaction was triggered by a Google blog post revealing that the company would begin offering experimental prototype access to Project Genie, its interactive world model and creation engine, to U.S.-based Google AI Ultra subscribers.
The market response suggested growing concern that Google’s move could pose a competitive threat to Unity’s core Create business. However, William Blair believes these fears are overstated and do not reflect the broader realities of Unity’s position within the gaming ecosystem.
In a research note to investors, the firm emphasized that Unity’s Create platform remains deeply entrenched across the gaming industry, currently powering approximately 70% of all mobile games worldwide. According to the analyst, this level of adoption represents a significant competitive moat that would be extremely difficult for any new or experimental platform to disrupt in the near term.
While Project Genie has generated interest due to Google’s strength in artificial intelligence and large-scale computing, William Blair views the technology as complementary rather than directly competitive to Unity’s offerings. The firm argues that Unity’s value extends far beyond content creation alone, especially when it comes to runtime operations, deployment, and cross-platform scalability — areas where Unity has spent years refining its tools and infrastructure.
The analyst further noted that early-stage or experimental tools such as Project Genie are unlikely to replace mature development environments that studios rely on for production-scale projects. Instead, innovations from major players like Google could ultimately drive developers to depend even more on Unity’s established runtime and operational capabilities.
William Blair described the recent selloff in Unity shares as an overreaction, driven more by speculative fears than by material changes to the company’s competitive outlook. The firm suggested that investor anxiety around AI-driven creation tools has led to a misunderstanding of how deeply embedded Unity is within the game development pipeline.
Looking ahead, the firm believes Unity stands to benefit as interactive content becomes more complex and resource-intensive. As new AI-powered tools emerge, developers may increasingly rely on Unity’s platform to manage performance, monetization, and distribution across mobile, console, PC, and cloud environments.
In conclusion, William Blair maintains confidence in Unity’s long-term fundamentals, arguing that the company’s dominant market share and expanding role in runtime operations position it well for future growth. The firm sees the recent stock weakness as an opportunity rather than a warning sign, reaffirming its Buy rating amid what it views as overblown competitive concerns.
