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D13H4RD

Tim Sweeney to Steam: Don't want timed-exclusives? Match our revenue split

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Posted · Original PosterOP

Well, it seems the battle between Tim Sweeney & Co. versus GabeN & Co. is going to get a wee-bit more interesting.

 

In response to a tweet from a user regarding Epic's potential response if Valve were to announce that they would be adjusting their revenue split to be more-in-line with what Epic currently does, Tim had the following to say;

Quote

If Steam committed to a permanent 88% revenue share for all developers and publishers without major strings attached, Epic would hastily organize a retreat from exclusives (while honoring our partner commitments) and consider putting our own games on Steam.

To recap, Epic Games operates with an 88/12 split, with 88% of the share going to developers/publishers and the 12% going to Epic, much of which are operating expenses. In comparison, Valve uses a much more conventional 70/30 split, with 70% going to devs/pubs and 30% going to Valve, although the developer share does increase by 5% increments after a certain revenue target is met, up to an 80/20 split.

 

From a developer's point-of-view, this much higher split is certainly much more enticing, specifically towards indies (the royalty fees for the Unreal Engine is also waived), who may also be interested in Epic's revenue guarantees, where Epic guarantees that a game will generate a certain amount of revenue, which it will compensate if it fails to meet such targets. However, the community has often debated whether this model can be sustainable when Epic inevitably adds more features (and hence, cost overhead) alongside concerns whether Epic could live up to this word given the seemingly rebuked response by Sweeney when asked if Epic were to continue snatching exclusivity away from Steam after the head of the EGS claimed that they did not want another fiasco like Metro: Exodus again.

 

Regardless of where one's stance is, it's mighty interesting to see where it goes from here. And it would be of keen interest to see if Valve responds to Sweeney's comments or if Epic finds more challenges to maintaining its 88/12 split once more features are added.

 

Personal take

Spoiler

It's certainly very well-understood on why Epic's strategy is enticing towards developers, especially indies, as it provides a good safety net if the title somehow fails to take off. And there's argument to be made in how taking on a giant like Steam may require drastic (and often unpopular, even controversial) decisions strategies in order to even make a dent. However, there is an important distinction to be made.

 

Epic's overhead is likely much lower than Valve's when it comes to operating their respective storefronts. That's mostly because Epic's storefront is very lean as of now whilst Steam is chock full of features, some of which can be a bit much for some, alongside others like investments into VR and such. While there is certainly some argument to be made that the 70/30 cut might be a bit too much, I don't think such a large storefront can do an 88/12 split. Perhaps an 80/20 split or at the leanest, an 85/15 split, but I could see issues if it goes any lower. It's also interesting to note that Valve actually doesn't take the full cut in some cases, notably when buying Steam keys off websites like Humble Bundle or GMG, which ends up being closer to 20% or less.

 

I think Valve will have to adjust their revenue split eventually, because whilst they have tweaked their policy in response to Epic's, it also seems to favor larger volume titles in terms of sales than indies, which could have played a role in EGS grabbing a number of timed-exclusive indie titles. At the same time however, I'm also beginning to question if Epic is able to maintain their 88/12 split once their launcher gets more features and such, with rumors from people who claim to be EGS staff claiming that Paypal transaction fees already take up a significant chunk of Epic's share.

Source: TechRadar


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*grabs some popcorn*  Just waiting for others to bring the salt.


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EGS doesn't do regional pricing, and as a result games are typically more expensive on EGS than on Steam for customers outside of North America. GoG did regional pricing until EGS started undercutting them. At that point, GoG released an announcement saying that they can't operate at a profit while continuing to do regional pricing at rates competitive with EGS, and so they're cancelling their regional pricing program.

 

EGS' 12% fee isn't enough to cover transaction fees for all countries without having to add additional costs in some countries. So, that tells me that EGS couldn't possibly do regional pricing and keep their current fee system.

 

 

From Valve's 30/25/20/0% fee system, they:

 

Supply games for download

Have developed and supports a comprehensive feature set that Tim Sweeney has said he doesn't plan to match

Do lots of physical product R&D (Steam boxes, Steam link, Steam controllers, HTC Vive, etc)

Do lots of software R&D (linux gaming, Steam features)

Offers regional pricing

Allows publishers / developers to print as many free Steam keys for their games as they want and sell them elsewhere, with Valve taking 0% on all of those sales - some estimates suggest that 30% of all Steam games are bought on a site other than Steam, in which case Valve would be getting 0% revenue from 30% of the games they supply hosting, download, community features, support, etc, for.

 

 

With EGS's 12%/18% fee system, they:

 

Supply games for download

 

Here are some other interesting posts from the Twitter discussion where Tim said EGS would retreat from exclusives if Steam matches their 12%/18% fee:

 

(for a large version of the image, click it, then click it again, then click it one more time)

 

1173958319_TimSweeney5.thumb.png.227bbf74f0d9d6f43228a895783b7156.png

 

 

And this is another look at the claim that EGS is 12% compared to a supposed 30% on Steam. The entire thread has to be read:

 

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Any games that go to the EGS in any exclusive way lose my purchase. Don't care what it is or how long I waited. I don't even fucking want steam but if I am going to be forced to give up physical media I'm damn well not doing it to 35 different launchers.

Also, from his "ultimatum":

Quote

The key “no major strings attached” points are: games can use any online systems like friends and accounts they choose, games are free to interoperate across platforms and stores, the store doesn’t tax revenue on other stores or platforms (e.g. if you play Fortnite on iOS+PC)...

Quote

More “no major strings attached”: if you play the game on multiple platforms, stuff you’ve bought can be available everywhere; no onerous certification requirements. Essentially, the spirit of an open platform where the store is just a place to find games and pay for stuff.

 

Good luck on that one. This is all just a giant PR move to have the internet kiss his ass.


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Any game exclusive to any platform won't get my purchase.  Am I doing it right? 


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5 minutes ago, Rune said:

Good luck on that one. This is all just a giant PR move to have the internet kiss his ass.

agreed, it reeks of "no, we're doing this for you guys, we're trying to help developers, we're not being anti-competitive, trust us"

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Posted · Original PosterOP

I don’t know how else to say this, but this is kinda like the Tesla strategy

 

Spend a heap of money to get stuff off the ground and then gradually pare back and become more mainstream once it does indeed get off the ground.

 

Honestly, I’m not sure if 88/12 is sustainable when EGS inevitable goes feature-parity with Steam. I’ll be mighty impressed if they manage to but it’s also a mighty tall order.


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After he lied straight to our faces about exclusives, there is no reason to believe him anything. Also epic will sell games via sites like GMG who take 30% as Steam so yeah, don't believe him anything. He just wants to look like the good guy he never was. 


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He knows he is fighting a lost battle so he's trying to make empty threats while other studios publishers start realizing how controversial Epic store is not willing to take deal anymore, they should've just sticked to fixing Epic store first and snatching exclusives from console only, i don't remember steam ever having payed for exclusives so why even attack them on that front, feels like Tim Sweeney is only attacking steam not Sony or Microsoft.

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I promise we won't won't try and be competitive if you change your business model to make less money, hmmmm  🤔


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Epic, get fucked with your dishonest bullshit. Steam ALREADY provides that because some games are sold with ZERO revenue while they still provide all the services Steam offers via externally sold keys that get activated on Steam. And don't get me started with how much more Steam offers to developers in terms of SDK's, exposure etc

 

Maybe they should adjust the cut for developers who are new to the game and not only give the cut to big corporations because they want to be more greedy, but other than that, Steam works fine and is not "greedy". Which I can't say the same for fucking Epic with their endless whining while stealing developers and making them exclusive to their garbage rotten platform.

 

So, yeah, Epic, get fucked. You suck and you suck more every time you open your god damn stupid mouth, just further reinforcing my stance on NOT buying any of Epic games. At all. And not even pirate them. Just ignore them like they don't exist. Not gonna give them satisfaction of whining about muh pirates.

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2 minutes ago, RejZoR said:

Epic, get fucked with your dishonest bullshit. Steam ALREADY provides that because some games are sold with ZERO revenue while they still provide all the services Steam offers via externally sold keys that get activated on Steam. And don't get me started with how much more Steam offers to developers in terms of SDK's, exposure etc

 

Maybe they should adjust the cut for developers who are new to the game and not only give the cut to big corporations because they want to be more greedy, but other than that, Steam works fine and is not "greedy". Which I can't say the same for fucking Epic with their endless whining while stealing developers and making them exclusive to their garbage rotten platform.

 

So, yeah, Epic, get fucked. You suck and you suck more every time you open your god damn stupid mouth, just further reinforcing my stance on NOT buying any of Epic games. At all. And not even pirate them. Just ignore them like they don't exist. Not gonna give them satisfaction of whining about muh pirates.

Both of their modern games are free.  I don't know why you'd buy either of them.


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Posted · Original PosterOP
7 minutes ago, mr moose said:

I promise we won't won't try and be competitive if you change your business model to make less money, hmmmm  🤔

Just seems odd that they are saying that this is somehow "saving PC gaming". 

 

I didn't think PC gaming needed to be saved to begin with. Is it good to have alternatives? Oh, for sure. But in this sort of way? It gets much cloudier in that regard. 


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2 minutes ago, D13H4RD said:

Just seems odd that they are saying that this is somehow "saving PC gaming". 

 

I didn't think PC gaming needed to be saved to begin with. Is it good to have alternatives? Oh, for sure. But in this sort of way? It gets much cloudier in that regard. 

IF I ask my competition to match my price in exchange for me not undertaking competitive practices, then the proper term for this is price fixing.


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It's never been about the revenue share, as Discord offer a 90% share, and barely anyone supports it.

 

Developers know of Discord, and if it was all about revenue split they'd be praising it all over. The difference is the cash lump sum Epic gives them as an incentive; despite having even less features, and a worse revenue split than Discord.


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58 minutes ago, valdyrgramr said:

Both of their modern games are free.  I don't know why you'd buy either of them.

Their store is not about THEIR games. And neither is this "news". I don't care if Fortnite is free, I couldn't give any less shit about it.

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Posted · Original PosterOP
5 minutes ago, NeuesTestament said:

I doubt they will be able to pull that off.

Yeah, it's questionable if they're even able to maintain that revenue split once they achieve feature parity. 

 

Rumor has it that the PayPal transaction fees already take up a significant portion of it. 


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4 hours ago, Delicieuxz said:

EGS doesn't do regional pricing, and as a result games are typically more expensive on EGS than on Steam for customers outside of North America. GoG did regional pricing until EGS started undercutting them. At that point, GoG released an announcement saying that they can't operate at a profit while continuing to do regional pricing at rates competitive with EGS, and so they're cancelling their regional pricing program.

 

-more about that-

That's definitely a concern, but couldn't Valve take a lower cut on "rich" regions like NA and adjust it regionally?

 

Also, doesn't the GoG statement kind of contradict you? If the games are more expensive outside of NA why would GoG's regionally adjusted prices be less competitive than before? If anything it should be the opposite. I think GoG is simply selling less games for a variety of reasons (not least of which their lower media presence and commitment to DRM free games, which by the way I applaud); the EGS is just another large competitor in a market that is already not in GoG's favor and to stay afloat they need to make more money on the games they sell.


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4 hours ago, D13H4RD said:

I don’t know how else to say this, but this is kinda like the Tesla strategy

 

Spend a heap of money to get stuff off the ground and then gradually pare back and become more mainstream once it does indeed get off the ground.

 

Honestly, I’m not sure if 88/12 is sustainable when EGS inevitable goes feature-parity with Steam. I’ll be mighty impressed if they manage to but it’s also a mighty tall order.

Tesla is rather different. Tesla had to make all of the Design technology to make the products work and learn how to do high-end manufacturing at reasonable prices. The latter part has actually been harder than the first.

 

As for EGS, I did some basic math when this came up and 18% was the lowest rate I could come up with where EGS wasn't a poorly run company. What this means is Tim is taking the fact Valve won't really say anything and trying to get free publicity from it. However, what it really means is that this approach is already having problems.

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Posted · Original PosterOP
17 minutes ago, Taf the Ghost said:

As for EGS, I did some basic math when this came up and 18% was the lowest rate I could come up with where EGS wasn't a poorly run company. What this means is Tim is taking the fact Valve won't really say anything and trying to get free publicity from it. However, what it really means is that this approach is already having problems.

So in essence, a PR stunt. 

 

What I'm thinking of right now is just how sustainable it is. Because my wisdom leads me to think that it's more likely that the increased operational expenditure that will come when Epic adds more features may lead them to rethink their strategy when it comes to the dev/store cut. 

 

On a side note, what I mean by the Tesla strategy is mostly just the whole "spend a heap now and profits come later". Though now I feel the term "startup strategy" is more fitting. 


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