Epic Games Admits In Court That Its PC Store Still Isn't Profitable
The company behind Fortnite is currently in a legal fight against Google over in-app fees
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Using dishonest tactics to claw away market share won't work with gamers. Steam got to where it is by good will, good prices and good features.
Steam got to where it is by good will, good prices and good features.
Well, eventually.
When Steam was first released, the running joke was "steaming pile of shit". It was slow, unreliable and only a couple of shades of green away from the worst color in the world. People complained about the birth of "always online" games and about paying full price but not even getting a box with it.
It's not exactly unassailable now either. It's my platform of choice as a user but for indie developers, the 30% cut is brutal and last I used it, the Steamworks SDK was pretty rough. The app itself also has a lot of legacy bloat like a built in MP3 player.
It's ahead of the rest but I think "good will, good prices and good features" might be an overly romantic take on "it's where all my games already are".
the 30% cut is brutal
This part always confuses me. When Steam started allowing non-Valve games on their storefront, 30% was considered a bargain compared to selling your games at retail. In fact, PC versions of games were often $10 cheaper than their console counterparts specifically because distribution and platform fees were lower. It wasn't until MW2 came out that PC prices started reflecting console prices.
It’s confusing to you that manufacturing, shipping, and selling physical copies of a game was more expensive than digital distribution? The world is very different today. Digital distribution is the norm and everybody knows you don’t need 30% to make it sustainable.
It’s confusing to you that manufacturing, shipping, and selling physical copies of a game was more expensive than digital distribution?
That is not what is confusing to me.
Digital distribution is the norm and everybody knows you don’t need 30% to make it sustainable.
I'm not sure I buy this. Epic's 12% is the bare minimum just to cover basic infrastructure costs for distributing modern AAA games. It doesn't even include transaction fees, which vary based on which payment method the user selects (whereas Steam and other storefronts eat these as part of their 30% cut).
Simply sustaining your existing platform is also not enough. Where Epic runs a barebones storefront and client with little in the way of useful features beyond "download game and keep it updated", storefronts like GOG and Steam take their actual profit and re-invest it in improving their platform for everyone. Think of all the time and money that goes into making things like Steam Input, Proton, or even GOG themselves fixing up older games for modern PCs.
The fact that it has been 5 years and Epic still hasn't been able to make their 12% cut break even speaks volumes.
Epic’s 12% doesn’t do much because they’re constantly burning money trying to find more revenue. It’s obvious they’re not doing anything efficiently. They also have far fewer sales than Steam which further hurts their bottom line.
The standard internet payment processors take 3% as their cut.
With modern cloud systems we can quickly distribute files globally for tiny amounts of money.
The truth is that Valve makes a ton of money off of this fee. It’s great that they contribute to open source projects but plenty of companies make similar contributions with a fraction of the resources.
I still remember being annoyed I suddenly needed to get a separate app just to continue playing counter strike.
Ah yeah, I was a bit of a hold out going to 1.6, but eventually all the servers started disappearing. That was like ~8 years ago.. right?
Na homie that was almost 10 years ago.
the 30% cut is brutal
Reportedly Epic's 12% barely covers costs and would not if they included transaction fees. 20% seems to be the bare minimum if you want a store to actually have good service, and then I'm giving Valve additional credit for sinking boatloads of money into general infrastructure, in the long term Proton alone is worth those 10%. Much unlike the rest of the stores (exception GOG) which take the same 30% and are run by humongous multinationals.
...and then there's itch.io. If you're a small and scrappy indie very much an option: They're also small and scrappy. And they'll probably shout at you if you try to upload a 20G game I very much doubt their servers would survive an AAA launch. OTOH, reportedly their average revenue split is 8% (customers can choose).
The difference is that Steam sells a ton of copies every single day. The vast majority of Valve's fortune has come from that fee. People jump to defend Steam but it’s already been established by lawsuits against other major corporations that a 30% cut is mostly driven by greed.
The 30% cut was industry standard for digital distribution for years. Google, Apple, and numerous other players all took 30% as standard.
That being said, Steam hasn't taken a flat 30% for years now - their standard agreement starts at 30%, decreases to 25% after the first $10m in sales, then decreases further to 20% after $50m.
Furthermore, Valve has done more in terms of providing services, APIs/libraries, and end-user features (all with no additional fee to the developers or consumers) than any other game storefront has. I'd say they more than justify their cut.
Industry standard by massive corporations synonymous with corporate greed. Boy am I glad the fee decreases after $10m in sales. That will go a long way with helping out indie devs.
It’s okay to like Steam because they’ve provided us with a good way of purchasing and playing games. I like Steam but we don’t have defend things that are obviously greedy.
Valve is constantly looking for ways to help the customer, just in their own weird ass way. Having linux as a competitive option to windows and being able to refund/return digital games, as well as a built in mod searcher and loader being some of the things they brought to the platform because Valve employees themselves are gamers and want their platform to be useful towards gamers needs
Refunding/returning digital games is an outcome of a lawsuit if I remember correctly
I think they do hell the consumer. And agree it's weird. But would argue against that being their goal with the caveat that what I'm about to say makes no real difference to anything.
I think they're looking to increase profits first and foremost. However, because they're not answerable to shareholders, they understand that the best way to do this is by building loyalty and ensuring "stickiness" loyalty. ¹
It's still about money. They just understand that the safest way to make it is by having a long term view and not burning people.
I think its both tbh. Money is certainly a factor, we live in a Capatalist society, the more money you have, the more you can do and influence, so even companies with the best of intentions will focus on profits. But with the shit Valve does, like the Steam Deck being a Linux machine (and thus open source), and working through the legal hassle of designing and making developers agree to digital item returns/refunds, I'm thoroughly convinced Valve generally does just want to make the gaming scene better as well because the employees themselves are also gamers
I think they just understand whatost executibes are too greedy / shit sighted / stupid to understand. Doing what's right for consumers drives revenue. It can be good for the consumer and motivated by profit. They're not mutually exclusive.
"it’s where all my games already are."
My pet theory is this was realized by epic and so the only reason they give games away is to "help" users build a library they won't want to "leave behind" for another store platform. Once they reach the market share they were aiming for I fully expect the practice to stop.
Moreover, just like that guy, Epic thinks that's the only thing that matters, or at least the biggest issue. The idea that gamers might not use them because their service is actually just worse seems to have never crossed their minds in any serious fashion.
That is their exact strategy...
Yes, there's bloat from old features, but there's also quality tools built into Steam, such as Steam Input and Proton.
Well, eventually.
When Steam was first released, the running joke was
Has anything ever worked perfectly when first released?
If that was true, EA would have been dead in the water 12 years ago.
Didn't EA shut down Origin or at least make it optional?
Remember Valve is the company and Steam is the storefront/launcher.
Epic is the company, EGS is the storefront/launcher.
EA is the company, Origin is (was?) the storefront/launcher.
Didn’t EA shut down Origin or at least make it optional?
Technically no. EA now just calls it "The EA App"
If Mass Effect Legendary Edition actually included ME3's multiplayer I might've considered installing Origin again.
Nope. Star Wars Squadrons (which I got from Epic, BTW) required me to download and install Origin first. I'd be salty as fuck about that if all parties involved hadn't already guaranteed that it was a game that I was never going to pay for anyway.
Yeah, making it a requirement for playing your physical copy of Half-Life definitely looks like good will to me.
And in turn diminished the industry's piracy problm for many years, making PC Games market a stable ecosystem instead of letting all of PC gaming die.
No? Cracks were created for that too
Yes? How can you possibly deny that? Steam was able to claw a market in russia, a country famous for piracy. Gaben was right, convenience with good prices trumps everything.
Sure, cracks still exist, but I've stopped downloading them in favour of buying off Steam because the user experience was a lot better. I'm sure I can't be the only one to do this.
Before Steam existed i would even crack games I had legitimate copies of solely because pre-Steam DRM was such an enormous pain in the ass to deal with.
Even today Denuvo is a veritable paradise compared to what DRM used to be like.
