I think they really were that stupid and though people would just go with it. And once that didn't go how they planned this was backup plan.

This allows studios to not rush the transition to different engines, but staying with Unity shouldn't be an option for anyone that wants to make a living from making games. There is just no trust left.

Just that their reputation is heavily tarnished anyways. This isn't a B2C company. The people buying from them are taking years to complete their work and how much money they have to pain can matter painfully.

So now they can't trust not to get fucked over after years of being deep into working with the engine. You can't plan business with this

This still leads to people choosing different on new engines on new projects. Everything that already rolls in Unity will keep doing that, but that's more because switching engines midway or afyer you already done is no fun, rather than Unity doing something right

I'd usually be inclined to agree with you, except no one in gamedev would have balked at the final position. 2.5% revenue share over 1m is less than Unreal even.

Maybe it's a tactic they believed they were using. But that would just be a different kind of stupid, because they burnt a lot of trust over something no one would care about.

It could be another kind of bluff though. It could have been the CEO signalling he's the toughguy who's willing to make tough decisions so he can get some job down the line.