Shares of Unity Software plummeted Wednesday after the maker of videogame-development software beat fourth-quarter earnings expectations but issued weak guidance for the current quarter.

Unity reported adjusted earnings of 24 cents a share for the fourth quarter of 2025, ahead of analysts' consensus estimates of 21 cents, according to FactSet. Revenue totaled $503.1 million, up 10% from last year and above Wall Street's call for $492.8 million.

The company, however, expects revenue of $480 million to $490 million in the first quarter of 2026. Wall Street had been looking for $492 million. It forecast earnings before interest, taxes, depreciation, and amortization of $105 million to $110 million, below forecasts of $116.9 million.

Unity Software dropped 24% in premarket trading Wednesday. Shares closed Tuesday down 34% on the year.

Investors fled game-development stocks like Unity last month after Alphabet's Google announced the availability of its artificial-intelligence virtual world creation tool, Project Genie. The platform remains in its infancy but investors worry that generative AI tools may someday lessen the need for more complex game-development software.