Epic Games paid 9.49M€ for Control exclusivity

closer · Sep 20, 2019

I say this in every egs thread but imo epic's goal is not to replace or serve as actual competition to valve (which imo has an iron grip on the pc retail industry), but to bolster their userbase further and to bring over typical steam customers. I think it has to do with streaming but iunno. I don't see anything that would indicate that Epic can actually compete with Steam and I don't see their current strategies as something that can achieve this.

Kill3r7 · Sep 20, 2019

closer said:
I say this in every egs thread but imo epic's goal is not to replace or serve as actual competition to valve (which imo has an iron grip on the pc retail industry), but to bolster their userbase further and to bring over typical steam customers. I think it has to do with streaming but iunno. I don't see anything that would indicate that Epic can actually compete with Steam and I don't see their current strategies as something that can achieve this.

That's because you look at Epic as that company that makes money off Fortnite instead of thinking this is a Tencent backed venture to gain control of the PC market.

Kerotan · Sep 20, 2019

Happy for them to get such a big chunk of the budget back.

I wonder what they'll offer for RDR2. Probably 100M.

EVA UNIT 01 · Sep 20, 2019

Do i think the state of egs is acceptable?
Fuck no.
Do i blame devs or pubs for taking that kinda change?
Nope.

Kyougar · Sep 20, 2019

Luke88 said:
Honestly this is a good deal, it's not like EGS getting those 9.5M back takes anything away from Remedy/505, if anything Remedy and 505 are the ones making a profit out of this deal no matter what:

If the game sold less than 160k then they earn 9.5M as opposed to less than that;
If the game sells more than 160k these 9.5M mean they essentialy get 100% revenue from those 160k copies as opposed to the 87.5% Epic usually gives developers and any additional copy sold is at the usual percentage;

it's a win-win scenario for the people behind the game

It is not even guaranteed that the sales guarantee pays out 100% or even 88%. We don't have any reports on how Epic handles the sales guarantee, but other deals in the past in the Industry had more like companies paying <50% of the price as a guarantee for a sale. Reason being: they take the risk and include pricedrops in a specific period (sales etc.)

Kyougar · Sep 20, 2019

Cactuar said:
And? Not taking this money doesn't guarantee actual humans will play the game either. The game is readily available to 140 million-plus gamers on console already and the sales still didn't set the world on fire.Extremely smart move in hindsight.

Smart move for the present? maybe
Smart move for the future? not really.

505 didn't make their investment back yet and doesn't see any money from PC sales until the sales guarantee for whatever amount of games is reached on EGS. They will probably see money from Steam in 12 months before they see money on EGS ever. Why should they invest in remedy further?

MilesQ · Sep 20, 2019

505 Games, a Digital Bros subsidiary, secures exclusive 20 year rights to the next game from Remedy Entertainment, renowned developer of AAA video games franchises, with an investment of €7.75 million.

The Group will publish a brand-new game by contributing €7.75 million in development funding and providing marketing and publishing services through 505 Games for digital and retail versions worldwide. The agreement includes a payment of 45% royalties on net sales.

505 Games signs worldwide publishing deal with Remedy Entertainment - Remedy

Milan, 3 May, 2017 – Digital Bros S.p.A. (DIB:IM), a digital entertainment company listed in the Star segment of the Milan Stock Exchange, through its subsidiary 505 Games S.p.A., announces today that it has entered a new worldwide PC and console publishing agreement with Remedy Entertainment...

www.remedygames.com

505 did well for themselves, I'm sure they'll come out net positive from the deal.

closer · Sep 20, 2019

Kill3r7 said:
That's because you look at Epic as that company that makes money off Fortnite instead of thinking this is a Tencent backed venture to gain control of the PC market.

I just don't see where the control of the PC market part comes from, unless, like im conjecturing, the pc market moves away from retail storefronts towards streaming and subscription services. If <--- is true, valve is uniquely positioned to enter the market and again define it, but if Epic is able to bolster their userbase by poaching steam users via exclusives, they may be able to compete. Currently I see no way for Epic to compete in the current PC environment, Steam is too large and too powerful, and the service Epic provides is both lesser than Steams and cannot move ppl who are completely used to Steam and want everything to be in their Steam library.

thebishop · Sep 20, 2019

closer said:
I say this in every egs thread but imo epic's goal is not to replace or serve as actual competition to valve (which imo has an iron grip on the pc retail industry), but to bolster their userbase further and to bring over typical steam customers. I think it has to do with streaming but iunno. I don't see anything that would indicate that Epic can actually compete with Steam and I don't see their current strategies as something that can achieve this.

EGS is particularly frustrating because it is accelerating a horrible trend already well underway on PC. Namely the fracturing of what had been an extremely convenient and user-friendly gaming experience with Steam. I'd argue this bad trend started about 10 years ago with the launch of EA Origin, and the addition of Activision games to Battlenet. These per-publisher gaming portals were already annoying. It sucks to have to load a separate app for EA, Activision, Microsoft, and Ubisoft games. EGS basically sucks as much as those portals, but with the salt in the wound of attracting (relatively) smaller publishers like 2K and 505, and even some of the larger indie devs/pubs.

We're now in a situation where by far the best way to game on PC actually doesn't get most of the biggest PC games at launch. That is terrible, and it's making me go back to Playstation for most of my games even though I just upgraded my PC a couple months ago.

"But Steam supports non-steam games" you say. "just add the exe to your Steam library, and there's no difference"

The problem is these exes still run the portal app at launch. So if you try to run Apex Legends from Steam, it will load Origin in-between, and break the work Valve has done to pass through gamepad maps and properly load into full screen. If you use Big Picture Mode on a TV, this really sucks because you often have to grab a keyboard and alt-tab to get back to the game. The whole point of Big Picture is to bridge the gap between PC and console. These shitty launchers are widening that gap just as Valve was getting close to fully modernizing PC gaming.

It would be one thing if ANY of these launchers were actually good. I'd love it if Epic made a better all-around PC gaming platform than Steam. But they're not close to doing that, and they're fucking up the decent experience we have currently.

closer · Sep 20, 2019

that's basically why I don't think Epic can really compete with Steam; the only incentive they have are exclusives and a better rate for devs/publishers. their library is curated, unlike Steam which is basically the de facto store for any non-exclusive pc title. there's just nothing there that would make someone buy on Epic rather than Steam. so to that end, I really don't think the goal for Epic is to replace Steam as a game portal, nor is it to compete on Steam's terms using their new rate. In addition to this, EGS was released as a minimum viable product, prioritizing releasing earlier rather than releasing with full features. I can only interpret this as Epic wanting to bolster their userbase asap, that's the only thing that seems logical to me. I think there was also a recent article about Epic opening some sort of streaming-focused thing, but that's me trying to attribute something to my own thesis without any real basis.

sirap · Sep 20, 2019

EvilBoris said:
which means epic were right and you lose out on playing great games from your favourite developers. Seems like you are the one that loses

Not really. Saves me money and I can focus on my huge backlog. Opens up the opportunity for me to discover new "favourite" developers too, ones that truly need support and aren't lucky enough to win Tim's golden ticket.

KernelC · Sep 20, 2019

no wonder they accepted. That is honestly way more money than I thought

closer said:
hat's basically why I don't think Epic can really compete with Steam; the only incentive they have are exclusives and a better rate for devs/publishers. their library is curated, unlike Steam which is basically the de facto store for any non-exclusive pc title

I hope it does compete with Steam. As a developer, losing 35% to Steam and the Engine owners sucks.

Dreams-Visions · Sep 20, 2019

Yea, that's...

I understand, 505.

poklane · Sep 20, 2019

If Epic is willing to pay this kind of money for (timed) exclusivity they might as just well take the next step and become the actual publisher for these games.

Kill3r7 · Sep 20, 2019

closer said:
I just don't see where the control of the PC market part comes from, unless, like im conjecturing, the pc market moves away from retail storefronts towards streaming and subscription services. If <--- is true, valve is uniquely positioned to enter the market and again define it, but if Epic is able to bolster their userbase by poaching steam users via exclusives, they may be able to compete. Currently I see no way for Epic to compete in the current PC environment, Steam is too large and too powerful, and the service Epic provides is both lesser than Steams and cannot move ppl who are completely used to Steam and want everything to be in their Steam library.

Tencent owns a major piece of Epic. They own Riot. They are the second largest shareholder in Bluehole. They helped Ubisoft fend off Vivendi.

My take is that if you start having most of the major releases exclusively in your store. The people will come. Steam won't die off but they will lose marketshare.

Kyougar · Sep 20, 2019

KernelC said:
no wonder they accepted. That is honestly way more money than I thought

I hope it does compete with Steam. As a developer, losing 35% to Steam and the Engine owners sucks.

99.9% of indie developers would lose 100% without steam. Because they will never get on EGS.

closer · Sep 20, 2019

Kill3r7 said:
Tencent owns a major piece of Epic. They own Riot. They are the second largest shareholder in Bluehole. They helped Ubisoft fend off Vivendi.

My take is that if you start having most of the major releases exclusively in your store. The people will come. Steam won't die off but they will lose marketshare.

Right, but as a lot of ppl point out, that seems to be a short-term plan without lasting consequences. Like, say borderlands released on steam and EGS simultaneously...is there any incentive to go with EGS beyond trying to get the ppl making and releasing borderlands more money? When I see most consumer testimonials, they really don't care about that at all, they prefer the features that Steam provides, and if they don't use the features they still prefer the comfort that Steam provides. I understand that Tencent is gigantic, but currently the amount spent on bringing ppl over so EGS can claim the sales from the initial sales period does nothing to make ppl stick with EGS as a de facto storefront; Steam still is the King and EGS doesn't really compare when it comes to features. I see the free games as an extension of this as well, games in which the sole purpose is to get ppl to sign up for EGS and provide their personal information to Epic.

Granted, the biggest franchise they've put out is BL3, I would be interested to see what it would mean to see an exclusive Elder Scrolls 6, or Cyberpunk, or Football Manager, something on a bigger level. But I don't see that happening. And it still wouldn't really convince ppl to buy a game on EGS when it is also available on Steam

another thought I had was that they were also trying to kind of condition the young Fortnite playerbase towards using EGS as their own generational "Steam" as I'm sure most aren't out there purchasing games on Steam, but there's no evidence to support that the Fortnite playerbase is engaging with EGS this way and most ppl in this thread don't see a correlation there.

sandweed · Sep 20, 2019

Kill3r7 said:
Tencent owns a major piece of Epic. They own Riot. They are the second largest shareholder in Bluehole. They helped Ubisoft fend off Vivendi.

My take is that if you start having most of the major releases exclusively in your store. The people will come. Steam won't die off but they will lose marketshare.

Tencent owns 40% less than half isn't a major piece.

Champion · Sep 20, 2019

I still think someone would need to look at the specifics of the deal in order to judge stuff like this.

Steel · Sep 20, 2019

How long can Epic afford to keep doing this shit.

DOBERMAN INC · Sep 20, 2019

Now I feel a little better about not supporting them at launch.

BradGrenz · Sep 20, 2019

Dalik said:
That's not even half of what they spent on just Control tho.

What, if Epic offered to pay off almost half of your debt to just keep doing what you already do you'd turn your nose up?

Kyougar said:
505 didn't make their investment back yet and doesn't see any money from PC sales until the sales guarantee for whatever amount of games is reached on EGS. They will probably see money from Steam in 12 months before they see money on EGS ever. Why should they invest in remedy further?

There is no reason to believe that. We have no sales figures yet. Control could just as easily be over the threshold to be getting additional payouts. Claiming it will take 12 months or more is totally unfounded.

thebishop said:
The problem is these exes still run the portal app at launch. So if you try to run Apex Legends from Steam, it will load Origin in-between, and break the work Valve has done to pass through gamepad maps and properly load into full screen. If you use Big Picture Mode on a TV, this really sucks because you often have to grab a keyboard and alt-tab to get back to the game. The whole point of Big Picture is to bridge the gap between PC and console. These shitty launchers are widening that gap just as Valve was getting close to fully modernizing PC gaming.

Sucks for Origin games. Many EGS games have a simple command line option to run without the store, though.

Kyougar said:
99.9% of indie developers would lose 100% without steam. Because they will never get on EGS.

No one is proposing Steam disappear. However, all those devs would benefit if Steam is pressured into lowering their take in response to the success of EGS.

Imitation Of Life · Sep 20, 2019

sandweed said:
Tencent owns 40% less than half isn't a major piece.

40 percent absolutely is a MAJOR piece. Major and majority are not the same thing.

texhnolyze · Sep 20, 2019

Imagine if they fund a new game instead. GreedFall costed less than that.

texhnolyze · Sep 20, 2019

BradGrenz said:
No one is proposing Steam disappear. However, all those devs would benefit if Steam is pressured into lowering their take in response to the success of EGS.

There's a platform which gives developers 100% of the profit, you know. Ever wondered why they don't flock into that store?

grosvenor92 · Sep 20, 2019

With the amount of money Epic is giving devs/pubs I can see why they are taking it. We may not like it but as long as Epic has money to throw around this will continue to happen

Deleted member 18379 · Sep 20, 2019

texhnolyze said:
Imagine if they fund a new game instead. GreedFall costed less than that.

They pretty much did fund a large chunk of Control with that much cash up front. Or does Control not count as a new game?

texhnolyze · Sep 20, 2019

FallenHeroX1 said:
They pretty much did fund a large chunk of Control with that much cash up front. Or does Control not count as a new game?

Their deals are always in a form of "money = x number of copies guaranteed", not for development investment.

And they always announced at the end of development cycle, pretty close to release.

Rygar 8Bit · Sep 20, 2019

With the amount of money they are throwing around for timed exclusives they could use to make actual exclusive games for their platform instead.

Hella · Sep 20, 2019

Kill3r7 said:
That's because you look at Epic as that company that makes money off Fortnite instead of thinking this is a Tencent backed venture to gain control of the PC market.

Kill3r7 said:
Tencent owns a major piece of Epic. They own Riot. They are the second largest shareholder in Bluehole. They helped Ubisoft fend off Vivendi.

My take is that if you start having most of the major releases exclusively in your store. The people will come. Steam won't die off but they will lose marketshare.

Epic's bought limited exclusivity for a dozen or two games. Some noteworthy games, sure, but still just singular games. And as this thread shows, each one comes with a very high price tag. Overall that's like 0.01% of what releases on Steam yearly, and far from all the games on PC; not enough to ever dominate the market--grow in a competitive one, sure, but not dominate it.

This conspiracy bullshit needs to stop. From you and everyone else peddling it.

JaseC64 · Sep 20, 2019

Forecasting:

Vampire: Bloodline 2. 15M
CyberPunk 2077 15M
Red Dead 2 30M
Doom 6 10M
Half-Life 3 40M
Tekken 8 8M
Destiny 3 10M
SOCOM 2 Remake (PC/PS5) 5M

Next gen Epic gonna bring them money bags. Book it.

Fluent · Sep 20, 2019

I am happy to see Epic try and win some of the fanbase from Steam. I view it like EGS wants users to use both Steam and EGS, not solely rip away customers but just broaden their choices. I think Epic will be good in awhile when all the features are in place, and it's certainly going to be more of a player in the online game stores than Origin, UPlay, etc.. I think Epic is trying to be #2 on the list behind Steam, and that's perfectly fine.

hydrophilic attack · Sep 20, 2019

good to see small studios supported this way

Shadout · Sep 20, 2019

So, if Epic gets all money from sales on EGS up to those $10 million, that means, if you actually want to support a developer, you should make sure not to buy their games on EGS. So the publisher/dev gets paid twice. Weird :D

Maximo · Sep 20, 2019

texhnolyze said:
Imagine if they fund a new game instead. GreedFall costed less than that.

Epic would rather take the easy route then fully develop and support new games.

TaySan · Sep 20, 2019

I don't blame anybody for taking that money.

DeadlyVenom · Sep 20, 2019

We assume this is just a sales advance like every other Epic deal that has come to light? That puts it in the range of 180k units sold before making more money off of EGS sales.

Sales advances certainly can entice publishers that have a product they don't have a solid grasp on how it will perform, like a new IP in Control. I still feel it looks a little short sighted for near guaranteed hits like Borderlands 3. Then I guess that is why they only got 6 months.

7thFloor · Sep 20, 2019

Fluent said:
I am happy to see Epic try and win some of the fanbase from Steam. I view it like EGS wants users to use both Steam and EGS, not solely rip away customers but just broaden their choices. I think Epic will be good in awhile when all the features are in place, and it's certainly going to be more of a player in the online game stores than Origin, UPlay, etc.. I think Epic is trying to be #2 on the list behind Steam, and that's perfectly fine.

Is this sarcasm I can't tell

Fluent · Sep 20, 2019

HoLoGrApHiC_principle said:
Is this sarcasm I can't tell

Nah, why would it be? I just don't mind what Epic is doing. If they have the money, go for it, try to compete for the #2 spot since they are never catching Steam.

NeroPaige · Sep 20, 2019

Keikaku said:
How many fortnite skins is that? 500,000?

loled hard

7thFloor · Sep 20, 2019

Fluent said:
since they are never catching Steam.

I agree with that bit, but that entire first sentence of your comment is like the polar opposite of what I'm used to hearing. I don't think they're "winning" Steam's fanbase, that's definitely the wrong word. You could say they're forcibly removing them from that ecosystem on a title per title basis. And they certainly aren't introducing choice, they're literally removing it. Anyway I don't think they're the devil either I just think you're being way too generous to them.

BradGrenz · Sep 20, 2019

texhnolyze said:
There's a platform which gives developers 100% of the profit, you know. Ever wondered why they don't flock into that store?

Because they don't have a viable user base.

texhnolyze said:
Their deals are always in a form of "money = x number of copies guaranteed", not for development investment.

How do you think any loan or investment works? You always end up paying back what you've used based on sales performance. Whether it's a bank, a publisher or a VC, come release time they get their piece. Epic's deals come with fewer strings attached than most.

IamFlying · Sep 20, 2019

Jarod McChicken said:
This is the revenue they made from eShop (Bloodstained, Terraria, Payday 2...)

Imagine they now release some good games on Switch with at least a little effort behind, sales would skyrocket.

tulpa · Sep 20, 2019

Kill3r7 said:
That's because you look at Epic as that company that makes money off Fortnite instead of thinking this is a Tencent backed venture to gain control of the PC market.

What evidence do you have that Tencent's investment in Epic has anything to do with trying to "gain control" of the PC market?

Syrenne · Sep 20, 2019

Steel said:
How long can Epic afford to keep doing this shit.

Longer than you'd think.

Also, I wish this industry was less secretive about how it worked so that people would understand what publishing and store deals actually look like and who benefits from what - where people make their money, how deals are structured, where money comes from, etc.

I guess disclosure if anyone wants to ignore me or w/e that multiple games I've worked on are Epic exclusive on PC, but...basically, this isn't uncommon, unusual, or surprising.

I hope Control sales pick up over time.

SvennusDemonicus · Sep 20, 2019

I gotta be honest I am not bothered one bit by Epic, I just want their launcher to be more feature rich. I will continue to buy games wherever its best (I use GMG for epic codes)

TheTrain · Sep 20, 2019

Syrenne said:
Longer than you'd think.

Also, I wish this industry was less secretive about how it worked so that people would understand what publishing and store deals actually look like and who benefits from what - where people make their money, how deals are structured, where money comes from, etc.

I guess disclosure if anyone wants to ignore me or w/e that multiple games I've worked on are Epic exclusive on PC, but...basically, this isn't uncommon, unusual, or surprising.

I hope Control sales pick up over time.

Probably it's me, but what is the point of that post?
It's been 40 years, at least, that we have exclusive agreement on the videogames industry, of course this isn't uncommon and such.
That doesn't mean that I have to like this MO, can I?

Tpallidum · Sep 20, 2019

Good for them i guess. Can't blame them for taking money upfront. If I was a dev i can't say i wouldn't do the same thing.

But this feels fucking gross from a consumer perspective

TooBusyLookinGud · Sep 20, 2019

sandweed said:
Tencent owns 40% less than half isn't a major piece.

You are insane if you think that. 40% is a substantial piece in this space.

PlainOldJosh · Sep 21, 2019

Qvoth said:
Goddamn epic is pretty nuts

Pocket change for Epic. Tim Sweeney alone has a net worth of over $7 billion.

Epic Games paid 9.49M€ for Control exclusivity

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