Why Valve actually gets a lot less than 30 / 25 / 20 percent of Steam game sales revenue

[Delicieuxz]

 

Why Valve actually gets less than 30 percent of Steam game sales

 

Quote

Since Epic started taking a 12 percent cut of sales revenue generated on its new Games Store, much has been made of whether Steam's baseline 30 percent revenue cut is justified. But a new analysis shows that Valve sometimes receives much less than that headline revenue percentage for some of the most popular games on Steam.

The reason for the discrepancy is Steam keys, which developers can generate pretty much at will to sell through non-Steam storefronts and brick-and-mortar retailers. While these key-based purchases are still redeemed through Steam and can take advantage of Steam's suite of features, Valve actually takes no commission from sales that don't take place directly through its own storefront.

 

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The results (for non-free-to-play titles) show that "on average, 72 percent of games are purchased through Steam, while 28 percent are purchased through third parties." And while that range can vary widely for individual games, the vast majority (80 percent) register between 50 and 80 percent of their reviews through direct Steam sales (You can view the raw, per-game numbers in this Google Doc).

 

Remember also that Valve incurs plenty of costs for these Steam key sales. Beyond the mere bandwidth costs for game and update downloads, key-based sales can still access the same online lobbies, achievement and leaderboard systems, Steam Workshop inventory management, Steam server APIs, anti-cheat services, and everything else that comes with being on Steam. Epic, on the other hand, provides very few of these services in exchange for the 12 percent cut on its Games Store (though the company does have a roadmap to roll out many similar features in the coming months).

 

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None of this necessarily means Steam's 30 percent cut of direct game sales is justified, or that Valve couldn't afford to lower its rates. But the next time you hear about Valve's 30 percent headline revenue cut, keep in mind that the functional proportion of total sales the company receives is probably quite a bit lower.

 

Keep in mind that Steam has a new tiered fee system by which Valve take 30% from the first $10 million in sales, 25% from the next $40 million, and then 20% percent on all sales after that. So, whatever Valve takes on medium-to-large titles (which are the only titles comparable to titles EGS hosts) is often even less than the article's main point suggests.

 

And then consider that Steam offers publishers and gamers a huge amount of more features for the money than EGS does, and those features cost Valve money to develop, maintain, and offer the bandwidth for. 

 

 

 

Then further factor-in that, unlike Valve's store fee, EGS' 12% store fee isn't all-inclusive. For example, EGS charges extra payment-processing fee in some countries because, according to Tim Sweeney, EGS' 12% store fee otherwise just isn't financially practical.

 

These are details that Epic's Tim Sweeney doesn't mention or allude to when he tries to hype EGS up and talk about how it's a better deal for developers. In the end, there might be very little difference between the two stores' expenses to developers, while there is huge difference in what features and community experiences those platforms provide their customers, and also in the business philosophy between those platforms: Valve is very pro-consumer, EGS is very consumer-disregarding.

 

 

 

Related posts:

 

[Bananasplit_00]

Thats pretty interesting, i had wondered what they did with the keys for a bit so nice to get some insight into that, lets just hope the EGS dies asap and this can all be over

[ADM-Ntek]

another thing to consider paysafe cards. paysafe takes 10% and as far as i know that comes fully out of valves cut.

[williamcll]

Too bad I'm stuck with CD keys most of the time steam in Hong Kong has weird gifting restrictions.

[myselfolli]

16 minutes ago, Bananasplit_00 said:

Thats pretty interesting, i had wondered what they did with the keys for a bit so nice to get some insight into that, lets just hope the EGS dies asap and this can all be over

I don't want the EGS to die out, I'd like for it to stick around and not poach exclusive titles from steam. A bit of competition is healthy imho, but I want to play Borderlands 3 and I'm not going to create a EGS account for it.

[Cryptonite]

1 minute ago, myselfolli said:

I don't want the EGS to die out, I'd like for it to stick around and not poach exclusive titles from steam. A bit of competition is healthy imho, but I want to play Borderlands 3 and I'm not going to create a EGS account for it.

with all the issues with Epic games I do not want them to stick around, I don't feel like I can trust them and do not want them to one day own some sort of exclusive that I really want.

[myselfolli]

2 minutes ago, Cryptonite said:

with all the issues with Epic games I do not want them to stick around, I don't feel like I can trust them and do not want them to one day own some sort of exclusive that I really want.

I haven't really followed the EGS store news too closely tbh, I always knew that I wouldn't move away from Steam...

 

What'd they do?

[Cryptonite]

5 minutes ago, myselfolli said:

I haven't really followed the EGS store news too closely tbh, I always knew that I wouldn't move away from Steam...

 

What'd they do?

https://glitched.africa/news/epic-games-store-spying/ was the issue I was referring to and since it wasn't denied that the code was intrusive and just explained that it was Tim's fault is basically just them putting out a fire in my eyes and don't fully trust it yet. There's also the matter of people that have been banned for simply either using VPN software or just having it open but de-activated while in fortnite. Not really keen on being forced to not use a VPN.

[Jito463]

9 minutes ago, myselfolli said:

I haven't really followed the EGS store news too closely tbh, I always knew that I wouldn't move away from Steam...

 

What'd they do?

Various security issues with their launcher, instances of the launcher scanning your computer (including your Steam profile) without permission, etc.  There's several posts right here in the Tech News sub-forum to view.  And that's without addressing the lack of proper features, such as a simple cart for purchases on the store.

[Yoinkerman]

They also pay like no corporate tax so what's the actual point?  " Businesses have expenses" no way who could have guessed

[Delicieuxz]

1 hour ago, myselfolli said:

I haven't really followed the EGS store news too closely tbh, I always knew that I wouldn't move away from Steam...

 

What'd they do?

EGS is paying millions of dollars to secure store exclusives and Tim Sweeney is feigning innocence despite him formerly viciously attacking Microsoft for trying to create a walled garden with UWP.

 

Here's a recent comment I made about the same question:

On 4/3/2019 at 8:56 PM, Delicieuxz said:

Because Epic Games shows no consideration for the consumer, demonstrates a poor and contradicted-by-law position on software ownership, is hypocritical in their attacks against Microsoft for trying to create a walled garden with UWP, is a bully and is trying to make itself popular by underhanded force and not quality of service, because Tim Sweeney is a conniving con-man, because Epic Games are being anti-competitive, and because Epic Games' Fortnite wealth by which EGS is purchasing exclusives is largely a result of circumstantial happenstance, trend-following, and lifting from an Unreal Engine 4 licenser.

 

Scummy practices all around, not a company worthy of supporting, IMO, and not a place that I trust with the custodian of the games that I own. Going by the attitude EGS have been showing, they won't care one bit if they shut down their service in the future once it's no longer their interest to continue, or it Tim Sweeney retires. And as they're 40% owned by a large corporation, and as so far Tim Sweeney has asserted that consumers don't matter and it's all about the developers, I think that it's likely EGS' policies could gravitate more towards benefiting developers and publishers over time at the cost of the consumer's interests.

 

That's why I'm only taking the free game offers on EGS.

 

 

Steam and EGS comparison of features (it's not entirely accurate):

 

[Doobeedoo]

Well I wonder how next few years will be digital stores wise. Steam will face competition, be it exclusives from EGS and in time feature wise when they catch up to that. Question is, how long will they ride on exclusivity deals and will that end up being benefitial in the long run especially how that leaves a bitter taste and bad rep in general. 

Exclusivity like this looks quite murky for the future. 

[RejZoR]

2 hours ago, myselfolli said:

I don't want the EGS to die out, I'd like for it to stick around and not poach exclusive titles from steam. A bit of competition is healthy imho, but I want to play Borderlands 3 and I'm not going to create a EGS account for it.

Competition is healthy, just not the kind of competition like Epic. They are using scummy tactics to grab at player base. But their exclusivity BS is just pissing on the market itself, making it worse not better. Last thing we needed was this exclusivity BS within PC gaming itself. We already had it with stupid consoles and now there's another one within PC gaming? Piss off Epic. I'm actually sad that people fall for this idiocy for few bucks saved. You're not helping anyone but Epic by supporting such lame business practices. I'm not even saying people should strictly buy through Steam. You can grab Steam keys on "grey" market shops, directly from developer or even through entirely different stores like GOG or Humble Bundle (which usually has Steam keys). Just not from Epic ffs.

[Quadriplegic]

9 minutes ago, RejZoR said:

Competition is healthy, just not the kind of competition like Epic. They are using scummy tactics to grab at player base. But their exclusivity BS is just pissing on the market itself, making it worse not better. Last thing we needed was this exclusivity BS within PC gaming itself. We already had it with stupid consoles and now there's another one within PC gaming? Piss off Epic. I'm actually sad that people fall for this idiocy for few bucks saved. You're not helping anyone but Epic by supporting such lame business practices. I'm not even saying people should strictly buy through Steam. You can grab Steam keys on "grey" market shops, directly from developer or even through entirely different stores like GOG or Humble Bundle (which usually has Steam keys). Just not from Epic ffs.

Exclusivity on PC has been there since the dawn of digital stores like Steam.

If you want truly exclusivity-free PC gaming, you have to go back to using discs, which I am totally down for

[poochyena]

~30% is how much Amazon takes and ~50% is how much traditional retail takes, so its not really that much.