Unity (NYSE: U) should be in an enviable position. The company's game engine is wildly popular, powering a long list of high-profile and niche games. Unity and Unreal Engine from Epic Games are often the two choices game developers seriously consider for their next game.

Unfortunately, Unity has made a series of missteps. The company paid $4.4 billion in 2022 for ironSource, an app monetization platform, in a deal that hasn't delivered results. At the time, Unity predicted that the transaction would drive adjusted EBITDA to a run rate of $1 billion by the end of 2024. The company's latest guidance calls for an adjusted EBITDA of $425 million at most this year.

Unity also got too big and became too unfocused, leading to massive losses. The company laid off 25% of its workforce earlier this year as it reeled in its ambitions. This was part of a "company reset" initiated by interim CEO Jim Whitehurst in November, which also involved shuttering offices around the world. Unity will now focus on its "strategic portfolio" as it winds down non-strategic lines of business.

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Source Fool.com