Big point that Epic is using for pushing their Store (beside exclusives) is 12%/88% split. That really is amazing and it is great for developers. But (there is always but in life) unfortunately that 12% doesn't come for free. In this case it comes for free for developers and Epic but customers who decide to use payment methods that are not "industry norm" , according to Epic, Will need to cover payment fees.
As you can see Epic is not hiding that. Now let's see how high those fees. Based on supported payment methods they could range from 5 to 7%
And then we have cases for yet unsupported methods that can go up to 25%
Then we have info from Valve presented at this years GDC where they revealed that almost 90% payments in Asia alone come from non standard payment methods. Unfortunately they didn't reveal exact cut but Valve supports over 100 payment methods so fees for those probably vary a lot. What we know is that one of the more popular payment methods in Asia is cash, and specially Steam Wallet Cards (we have data only for Asia but from roaming around the reddit and forums you can notice that it is very popular payment method in many other countries where PayPal or CC is not used that much). And those cards as you can see cost Valve 10-15% (as far as i know that is more-less standard rate for any Wallet Card). So based on this data Epic Store simply can't afford to include some of these payment methods with 12% cut and as we can see many markets ask for those payment methods (please watch Valve GDC presentation about doing business in emerging markets).
So as you can see that is one example of what it costs to lower Store cut that much. But there is another one. Second thing are 3rd party key sellers like GMG, Humble Bundle, Voidu, Fanatical... And this has 2 things attached to itself. First thing is that at 12% Epic needs all money they can get to run a store, but if games from Epic Store are sold elsewhere for lower price (3rd party key sellers can lower their cut even more) and they are selling well (based on Steam Reviews for recent big games 20-50% Reviews are coming from users who bought game outside Steam) they could be in trouble. If 30% of total buyers buy game outside of Epic Store technically Epic is getting 8%. And according to Tim Sweeney that is enough to cover costs, but if you are running business you need profit. So Epic has a choice either to start charging developers for keys as they are doing for now limit sales to one store (Humble Bundle) or don't allow sales outside their store.
Second thing regarding 3rd party key sellers is actual discount. Right now that 30% cut allows many 3rd party key sellers to drop the price up to 25% for pre-orders and day 1 purchases. That of course attracts huge amount of customers and as we could see before that is something that Epic really can't afford to allow. So as consequence if those stores get to sell Epic Store keys they will probably be limited how big discounts they can offer (something like GMG and their PlayStation offers that are max 7% off if i remember correctly).
As you can see 12% really is awesome deal for developers but it comes with huge cost for many customers. As much as it is great to support developers customers will in most cases look themselves first (that is their right after all). And this could lead to potential issue. But that doesn't mean that Valve can't lower their cut (as we could see they can and they did based on amount of money game generated). But even that can be improved, they probably still have a bit more room to do something. But based on data we have today 12% that Epic asks for is not good middle ground between developer needs and what customers are looking for.
If mods thing that this is not worth discussing or that i didn't covered it well, feel free to lock the thread.
As you can see Epic is not hiding that. Now let's see how high those fees. Based on supported payment methods they could range from 5 to 7%
And then we have cases for yet unsupported methods that can go up to 25%
Then we have info from Valve presented at this years GDC where they revealed that almost 90% payments in Asia alone come from non standard payment methods. Unfortunately they didn't reveal exact cut but Valve supports over 100 payment methods so fees for those probably vary a lot. What we know is that one of the more popular payment methods in Asia is cash, and specially Steam Wallet Cards (we have data only for Asia but from roaming around the reddit and forums you can notice that it is very popular payment method in many other countries where PayPal or CC is not used that much). And those cards as you can see cost Valve 10-15% (as far as i know that is more-less standard rate for any Wallet Card). So based on this data Epic Store simply can't afford to include some of these payment methods with 12% cut and as we can see many markets ask for those payment methods (please watch Valve GDC presentation about doing business in emerging markets).
So as you can see that is one example of what it costs to lower Store cut that much. But there is another one. Second thing are 3rd party key sellers like GMG, Humble Bundle, Voidu, Fanatical... And this has 2 things attached to itself. First thing is that at 12% Epic needs all money they can get to run a store, but if games from Epic Store are sold elsewhere for lower price (3rd party key sellers can lower their cut even more) and they are selling well (based on Steam Reviews for recent big games 20-50% Reviews are coming from users who bought game outside Steam) they could be in trouble. If 30% of total buyers buy game outside of Epic Store technically Epic is getting 8%. And according to Tim Sweeney that is enough to cover costs, but if you are running business you need profit. So Epic has a choice either to start charging developers for keys as they are doing for now limit sales to one store (Humble Bundle) or don't allow sales outside their store.
Second thing regarding 3rd party key sellers is actual discount. Right now that 30% cut allows many 3rd party key sellers to drop the price up to 25% for pre-orders and day 1 purchases. That of course attracts huge amount of customers and as we could see before that is something that Epic really can't afford to allow. So as consequence if those stores get to sell Epic Store keys they will probably be limited how big discounts they can offer (something like GMG and their PlayStation offers that are max 7% off if i remember correctly).
As you can see 12% really is awesome deal for developers but it comes with huge cost for many customers. As much as it is great to support developers customers will in most cases look themselves first (that is their right after all). And this could lead to potential issue. But that doesn't mean that Valve can't lower their cut (as we could see they can and they did based on amount of money game generated). But even that can be improved, they probably still have a bit more room to do something. But based on data we have today 12% that Epic asks for is not good middle ground between developer needs and what customers are looking for.
If mods thing that this is not worth discussing or that i didn't covered it well, feel free to lock the thread.
