Unity is a cross-platform game engine with a built-in IDE developed by Unity Technologies. It is used to develop video games for web plug-ins, desktop platforms, consoles and mobile devices.
Unity actually is the union of
A game engine, that allows game created to run (hence to be played) in different environments.
An application where the "visible pieces" of a game can be put together (the IDE) with a graphical preview and using a controlled "play it" function.
A code editor (the one provided is MonoDevelop, but developers can use others).
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