Unity Software (NYSE:U) has received largely positive post-earning views from analysts, even as shares dipped over 7% on Friday after its third-quarter results.

The video game technology company delivered better than expected performance, raised its outlook and appointed a new CFO, but revenues fell, and the company is still incurring losses.

Nevertheless, Needham was positive about the company, suggesting the transition period for the company appears to be nearing an end soon with recently announced CTO and CFO hires, “progress in rebuilding the Grow model and a conclusion to the run-time saga.”

Morgan Stanley was also bullish on Unity (U), noting better-than-expected Q3 results and guidance and confidence in the growth prospects of its Create platform and Grow business.

“[Unity] has a clear opportunity to reaccelerate Grow in 2025 as it deploys a rebuilt AI/data infrastructure,” MS analysts said.

Stifel sees more clarity around Unity’s (U) near-term growth drivers. Pricing increases on the Create platform are expected to generate more revenue as 2025 progresses, potentially double-digit subscription revenue, and ML model testing and improvements in the Grow category are ahead of schedule.

Q4 metrics may remain challenged, but 2025 is looking up for Unity according to Stifel.

On the other hand, Benchmark struck a more cautious note, saying Unity’s (U) Q4 guidance reflects “ongoing challenges in a maturing video game industry marked by significant restructuring, widespread job reductions, and continued studio closures.”

Unity may face disruption from emerging low-cost innovations powered by generative AI-powered innovations, including simpler, AI-enhanced development tools that compete with its Create platform.