The main issue I'm seeing so far, is that there are going to be devs who are midway through dev and then this just crops up out of nowhere (if devs had known, we would have heard of this agreement to changes made months ago). That CEO basically has the devs locked in and by the balls, metaphorically speaking.
Something will likely come of this, but it'll probably be behind closed doors. I doubt we'll see any dev/studio coming out on Twitter to state they are getting lawyers involved (something lawyers would advise you not to do).
Oh, I absolutely agree. Despite thinking that this is probably technically legal, I still think this is a terrible move that will result in something.
Chances are high that it is both legal and binding (Unity's lawyers would have likely checked this through multiple times, but I've no idea why their lawyers did not advise to not just throw this info out so suddenly).
But either way, even with some of the backtracking Unity is doing at this moment, the damage has been done. I'm already hearing about devs who are either in dev wanting to move away to Godot/UE, some that want to flat out scrap their early projects and just move to the other two, or those left with finishing their projects to then move onto the other two engines, but all of these tells us that devs have lost trust with unity and are willing to switch to another engine (even if that means dealing with months of learning to use a different engine if you're not well versed, and for aspiring indie devs, that can be a setback).
Tbh, after seeing this all blow up so fast and so loudly, I don't really think Unity can earn the trust back. I think the damage was quite large, maybe not completely fatal, but enough damage that has caused ripples in the dev side of the industry, that it's gotten Godot to increase it's gains of public/dev attention, and of course I imagine Epic will gladly use this short window of time to advertise their engine over Unity.
If I was on a board of directors for Unity, I'd vote to have the CEO removed from position within the month. His history, despite the money he can and has made, is not worth long-term damages he has caused. It's wild to me, utterly wild how general citizens around the world can sue for defamation, yet CEO's for corps are allowed to waltz in and utterly demolish entire businesses and walk away with a golden parachute and not suffer any heavy penalties for it.
That CEO is possibly one of the worst I have seen. I have always seen Tim Sweeney as a bit of a childish person (especially his sense of entitlement to a platform he willingly abandoned and mocked for years), but Riccitiello is just a whole other level of vile, and the link Curl posted speaks volumes of how that guy views everyone around him, devs and customers, as "fucking idiots".
No one should ever hire that man for any position of power, because he is incapable of leading anything towards long-term sustainability.