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Epic Store and 12% cut
- Thread starter dex3108
- Start date
Assuming Tim gives a damn if he's caught with his pants down.
A lot of people just really hate Steam. Often for petty, nonsensical reasons.
EGS run by grandpas and grandmas confirmed.
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i see nothing but negativity in these threads?
Check out the rest of the internet. A lot of useful idiots giving EGS a pass because of some trickle down nonsense, or because Steam in 2004 didn't have a bunch of features.
Because Steam are an evil monopoly and must be stopped NO MATTER THE COST
/s
Prebuilt Gaming PC users, who bought it with a wave of VR news.
High end prebuilt buyers that have heard about Fortnite or VR. Even Walmart is selling them now.
It's kind of like how a small minority of Steam users now have even played Half Life, where when it launched you could assume everyone on Steam was also a Half Life fan/player. The gaming world has expanded immensely.
Presumably the same people that have beastly $5000 rigs but choose to play on their consoles because "it just feels right". Schrodinger's collapsing console owner; simultaneously has a PC and doesn't have a PC and plays on PC and also does not play anything on the PC because reasons. /s
I mean, when I bought my first gaming PC the first game I bought was Empire: Total War because it was supposed to look gorgeous. I'm sure lots of people buying their first gaming PC are choosing Metro as their showcase game right now.
If the cut is raised (I think that's inevitable) Sweeney could always spin it as a pro consumer move.
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What I think will happen, is the 12% cut will stay, but the store will develop new features for developers/publishers that it will then optionally charge for. I.e. things that are free in the Steamworks feature set but can't be opted out of to squeeze a bit more money out of each sale, will be opt-in on EGS, so developers who need or want to use them can just choose to pay more. They're already doing that with the discussion about how a dev can choose to be less greedy and give up some of their cut to cover transaction fees that are otherwise shafting the consumers.
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This isn't happening. They're already giving away the entire backend service for free, with no need to use the EGS (or Unreal) at all.
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They don't give servers to run those services on as far as I know. Valve offers whole infrastructure on top of backend services.
I think the implication is that if you can get developers and publishers to support your platform, customers will surely follow because "it's all about the games".
This is literally already in the talks due to developers asking if they can seem like less of a badguy by voluntarily giving up some of their money to cover the added expenses of customers who aren't in the US or have other added overheads.
That's still a store feature that EGS will optionally have developers pay for, that Steam provides out of its own cut.
I've been thinking about Epic's strategy in general, including the moneyhatting and the 12% cut, and I am curious as to their long-term game plan. Let's say for argument's sake that Epic manages to moneyhat every big PC release for the next, say, two years. Let's also say that most of the PC audience will fold and end up buying these games on Epic's store.What happens then? What's the next step?
The way I see it, there are two issues for Epic, one regarding developers and one regarding customers. On the developer side, as soon as the moneyhats stop they will have no reason to keep the game an exclusive on EGS, so any temporary user gains that Epic achieved will evaporate. So Epic will either have to keep moneyhatting developers ad infinitum or risk losing whatever ground they covered against Steam. On the customer side, what would be the reason for customers to start buying non-exclusive games on EGS? Epic may manage to eventually gather an audience that buys exclusives on EGS and everything else on Steam, but what's the point? What's the value of that audience for Epic?
The only way I see Epic's plan working is if they are counting on developers and publishers to eventually, and willingly, with no upfront monetary incentive, start making their games EGS exclusive just because of the cut. This scenario, given the fact that even Epic's very optimistic plans have the goal of reaching half of Steam's userbase in five years' time, seems extremely far-fetched. Even if they do manage to achieve that goal, the difference in userbase size is more than enough to negate any revenue advantage because of the reduced cut.
The way I see it, there are two issues for Epic, one regarding developers and one regarding customers. On the developer side, as soon as the moneyhats stop they will have no reason to keep the game an exclusive on EGS, so any temporary user gains that Epic achieved will evaporate. So Epic will either have to keep moneyhatting developers ad infinitum or risk losing whatever ground they covered against Steam. On the customer side, what would be the reason for customers to start buying non-exclusive games on EGS? Epic may manage to eventually gather an audience that buys exclusives on EGS and everything else on Steam, but what's the point? What's the value of that audience for Epic?
The only way I see Epic's plan working is if they are counting on developers and publishers to eventually, and willingly, with no upfront monetary incentive, start making their games EGS exclusive just because of the cut. This scenario, given the fact that even Epic's very optimistic plans have the goal of reaching half of Steam's userbase in five years' time, seems extremely far-fetched. Even if they do manage to achieve that goal, the difference in userbase size is more than enough to negate any revenue advantage because of the reduced cut.
Based on Sweeney's tweets that the storefront war will be won by pleasing developers instead of consumers, this is probably his long term plan. I can only pray this doesn't work out for them like that.
As far as my deduction skills can tell, the idea is, and has always been, to just have Epic grab a slice of the pie. To that end, what they're setting up is a system where, ideally for them, any major developer going onto the PC market will launch their game for the EGS first. The market nowadays is such that the sales of every game, especially digital, are very severely front-loaded, the first year can see as much as half of the total lifetime sales of any game, and the first month or two can be as much as half of that.
So what ends up happening - in Epic's interpretation of the market - is that a game will sell the lion's share of its copies on their store, giving them a decent bump in profit, and giving the developers(read: publishers) a better profit for those sales than they'd see on Steam, theoretically. The game then moves on to sell on Steam or anywhere else, however much it manages, and from then on it's not Epic's business what happens. They want to use that prospect, of the increased profit per copy sold on the front-loaded launch sales, to entice publishers to make their games exclusive to their store of their own volition.
What I suspect might end up happening, is people will see through the ruse, wait out the exclusivity, and buy on the cheap regardless - those people who don't pirate, or get their fill of the game from let's plays, or buy on console instead, or lose interest in general and decide to play something else, etc. I realize there are probably millions of people, especially in the US and UK, who would not bat an eye to being taken advantage of in this manner, mostly because they can afford it and/or don't care. The rest of the world, which rather outnumbers them, will actively look for better options, and I can't say I clearly see what future that would entail for the industry. It might get better, there's always the possibility that change will improve something, but in my experience that is rather rarely the case in these situations.
Yeah,like I said this is the only way their plan has a chance at succeeding. The problem that might come up with that is that game sales are front-loaded for a reason. It's the time when your audience is the most hyped, there are no reviews pointing out flaws and issues and the marketing machine is firing on all cylinders. If you train a big part of your audience (Steam's userbase) to wait, say, three months, there is no guarantee that you'll get the same amount of sales. I really doubt that the revenue from a day-one launch on EGS and a Steam launch three months later is going to even come close to the revenue from a day-one Steam launch.
This is their plan indeed.
The moneyhat is an upfront payment to make up for the loss. Epic's bet for publishers is the following: "You wont lose much sales, if any. And if you do, it'll be covered up by the better cut". The point isn't to have games releasing everywhere but on EGS only because of the favorable cut. But that raise the question of "Is it sustainable". Of course most devs think it'll be. Heck if you read some, even 5% would be sustainable. Because when you ask some of them, they're not even aware of what's being done or provided. In the end, the point is to shift the cost on consumers.
Well, developers won't show loyalty to Epic if it hurts their bottom line. I doubt they will stick with Epic without moneyhats if their sales fall off a cliff, regardless of cut.
I think this honeymoon period will be over pretty soon once developers realize that their sales will be severely affected.
I think this is reaching. It's certainly not a large enough demographic to support an entire store.
Edit: and I don't believe that people in this category will not end up using Steam for most of their games.
My prognostication: the split will be tweaked around the time Epic stops buying temporary exclusivity, people will call Sweeney out on this tweet, and he'll say he didn't lie as the games released prior to the adjustment have been grandfathered in at 88/12.
They hate Steam.
Basically, throwing the baby out with the bath water. If it could fuck Valve up it's good for them, never mind the other store fronts and launchers.
The vast majority of Fortnite /F2P players do not have rigs capable of playing Metro or Division 2. So I really don't get Epic's way of thinking unless is is way of getting rid of third party key sellers.
If it wasn't for Metro Exodus I wouldn't of used the launcher (the free games are a bonus but there isn't one I thought about buying beforehand)
If it wasn't for Metro Exodus I wouldn't of used the launcher (the free games are a bonus but there isn't one I thought about buying beforehand)
I think I'd add in another step:
A storefront's customers are publishers and developers. And what you're selling is the ability to get end consumers' eyes on their title.
The cut is the price you're selling it for, possibly increased a little by extra services (which Steam has, Epic does not currently, but they may not necessarily be of interest to a given customer).
The question is whether the service is worth that price. And that's something we simply don't know right now, and won't until sales figures become apparent. 4.5M taking the free game download is not bad (5% less good, but let's talk raw numbers), but whether that's an audience willing to part money for games is a whole different question. However many come to EGS for (say) Metro Exodus is more of an audience, but did they go there just for Metro or are they looking to hang around and browse the shelves?
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Galyonkin himself wrote a blog post about how having an audience of F2P players doesn't mean you have an inbuilt audience of paying customers, but, as you might expect, EGS is of course the shining exception.
I'm a little surprised he hasn't deleted that post like he did his tweets admonishing platforms that don't support cloud saves.
I used to be a huge fan of Epic before this.
All the Unreal and UT games, even this abandoned alpha (UT 2014), heck I even liked Paragon.
I've been using their launcher since the beginning.
The moment this EGS stuff started happening, they lost me.
It looked bad from the start and I was seriously surprised so many from the consumer side had their back regardless.
I still wish them luck, because I do like them as a developer, but I think maybe they should've planned this store out more carefully before launching.
All the Unreal and UT games, even this abandoned alpha (UT 2014), heck I even liked Paragon.
I've been using their launcher since the beginning.
The moment this EGS stuff started happening, they lost me.
It looked bad from the start and I was seriously surprised so many from the consumer side had their back regardless.
I still wish them luck, because I do like them as a developer, but I think maybe they should've planned this store out more carefully before launching.
The media plays a huge role in this. Polygon, Kotaku, Jimquisition and any others have been shitting on Steam on many occasions, while defending and/or downplaying Epic's shitty tactics.
This said, a guy on Reddit who worked in PR noticed how "Epic" immediately triggers a negative response at a significant part of the most loyal pc gamers. He said that whatever Epic's end goal is, this may become a serious issue for them if they fail to address this.
Epic probably thinks that people will except their store, just like many people accepted Origin and Battle.net. But he may underestimate the tolerance of PC gamers for 3rd party moneyhats vs 1st party exclusivity.
Anyway, what the majority of PC gamers does will be the major factor in the outcome of Epic's current efforts. Many people dislike it, but even here on Era many people seem to be happy to support them by buying moneyhatted games.
From what we can gather so far afaik is that Epic is not directly moneyhatting the publisher but "only" giving them a guaranteed amount of sales. This means Epic has no losses at all when those guaranteed amount of sales are reached or even surpassed, and the publisher avoid the financial risk of not reaching that level of sales. The consequence is that if the sales consistently are at or above the level Epic guaranteed it will allow Epic to perpetuate the whole scheme without actual additional costs.
To play devil's advocate I'm sure Epic essentially entered the sales betting business there, and this is the main reason why they hired the SteamSpy guy. Every sales guarantee Epic offers for some publisher's game must be based on some internal projection how likely said game is to reach a specific sales threshold. This will ideally allow Epic to minimize the risk of not getting the guaranteed money back while also keeping the scheme running self-sufficiently. So I'm afraid Epic is in for the long run using this approach.
What I wonder is when publishers will actually realize that going exclusive to EGS is willingly cutting down their products' exposure and audience size, worsening the outlook of their future products. This combined with Epic's offer of guaranteed sales has the ability of making publishers/developers dependent on the EGS like no other software ecosystem on the PC managed so far.
There's a thing I sort of just realized that should probably be checked and maybe brought to the attention of some non-sellout media, because if it works like I think it does then this whole line of "30% cut" criticism against Steam may be completely insane as a criticism of Steam itself.
Steam has grown into a market leader position because nobody else stood up to bat. They have become what the law (as I understand it) defines as a "natural monopoly", the de-facto choice through simple logistics - a single platform for everything is most convenient, offers the largest userbase, etc.
What this means is, for Steam, it may in fact be illegal to improve on the industry-standard 30% cut unless everybody in the industry also lowers it, as their natural monopoly is only legal as long they don't engage in exploitative practices - such as exclusive deals or predatory pricing (i.e. what EGS is doing with the 12%). Steam lowering their cut on a general basis can and will be seen as them undercutting their existing competition - GOG.com and the stores that resell Steam keys.
If my understanding is correct, it may be that Steam is being criticized for essentially complying with competition laws.
Steam has grown into a market leader position because nobody else stood up to bat. They have become what the law (as I understand it) defines as a "natural monopoly", the de-facto choice through simple logistics - a single platform for everything is most convenient, offers the largest userbase, etc.
What this means is, for Steam, it may in fact be illegal to improve on the industry-standard 30% cut unless everybody in the industry also lowers it, as their natural monopoly is only legal as long they don't engage in exploitative practices - such as exclusive deals or predatory pricing (i.e. what EGS is doing with the 12%). Steam lowering their cut on a general basis can and will be seen as them undercutting their existing competition - GOG.com and the stores that resell Steam keys.
If my understanding is correct, it may be that Steam is being criticized for essentially complying with competition laws.
I think you might be over thinking the weight the 30% cut has from any legal standpoint.
Like Intel and Nvidia, they don't want AMD to go under, because there is a chance the Anti competitive agencies would break up those companies or five them fines to create their own competitors.
There are currently 3 known ways how Epic is securing their exlusivity deals. Guaranteed amount of sales ("revenue guarantees") is one way, the others are directly moneyhatting and / or funding the game and we already heard that there are also combinations like moneyhatting + revenue guarantees on top of that.
https://www.pcgamer.com/epics-tim-s...-company-lands-exclusives-for-the-epic-store/
Tim Sweeney said:
Thanks. Yeah, that doesn't sound like something they can keep up in the long run without bleeding money.
You've overthought it. Valve charges 30% because others charge 30%, and there's been no market pressure to improve the cut for developers until now because why make less than your competitors. I mean, Valve even had their Steam Link iOS app rejected for trying to get around the 30% cut in purchases in the App Store, which is ironic because Steam forces all purchases to permanently go through Steam for all future purchases once an account for a game makes a purchase via Steam even if the game is available on the developer's own store. Do as they say, not as they do, I guess.
Epic is moneyhatting exclusives because if people see a game on two digital stores on PC and they already have Steam, they're more likely to just continue expanding their Steam library instead of buying from another store, because most people don't care about what happens to the people that made the game. Moneyhatting gets them to try Epic's store before the game comes up on Steam. That's the entire reason; they're getting eyeballs on the store. Exclusives are annoying, and I'm not defending the practice, just merely pointing out the why.
Valve is hoping Epic doesn't get anywhere so they don't have to move their cut, and Epic is hoping they get enough customers that they have a revenue stream once Fortnite wanes. Epic's done shitbird stuff in the past (the whole Unreal 3 fiasco, the SK lawsuit, etc) but Epic's also the only one with enough money to come at a company that's recently told people they spent more than five seconds figuring out that it's not a good idea to make money off content that advocates rape and took way too long to even acknowledge they were publically leaking personal information of people to the internet, and then shrugged it off. When they were raining out customer's home addresses and personal information like it was one of those cash tornado booths. The ire towards Steam on both the public side and the developer side isn't unearned, and much of it is needlessly self inflicted.
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I mean if people are going to handwave certain regions being subjected to higher prices than Steam, no ability to purchase the game outside of the Epic store which correlates to a monopoly that Epic are so publicly fighting "against" and a continued approach of ignorant customer standards in favour of supposed publisher/developer standards that are dressed up to be pro-consumer, well then what exactly is the point in trying to create a discussion around these subjects?
All these threads continue to do is turn into circular motions of discussion from those wanting to just handwave for the ability to stand in front of a mega corporation and defend their actions? Why? What does one get out of saying the Epic Store is a gift from Tim himself in the fight against a prevalent devil known as Steam? A bumper sticker saying "I fought against the Steam tyranny!"
Why are anti-consumer actions (and yes, they are anti-consumer because they go against the consumer in favour of bottom dollar returns) so hated in one factor but in the PC realm it is a-okay? This idea that Epic couldn't have competed against Steam without these exclusives is bullshit, they very well could have if they so choose to with the bankroll they have. We would have a whole different story if Epic had chosen to fight Steam on the better revenue split instead of negative purchasing exclusives in a hope of making that back.
I'm actually not even sure how the heck Epic are supposed to make back the financial burden of exclusive purchases outside of Fortnite money. That doesn't seem very business savvy to me, but I also don't believe the Epic store is even conducive to developers with the clear lack of thought in UI storefront development and a need to rush concepts while the Fortnite gravy train is running.
All these threads continue to do is turn into circular motions of discussion from those wanting to just handwave for the ability to stand in front of a mega corporation and defend their actions? Why? What does one get out of saying the Epic Store is a gift from Tim himself in the fight against a prevalent devil known as Steam? A bumper sticker saying "I fought against the Steam tyranny!"
Why are anti-consumer actions (and yes, they are anti-consumer because they go against the consumer in favour of bottom dollar returns) so hated in one factor but in the PC realm it is a-okay? This idea that Epic couldn't have competed against Steam without these exclusives is bullshit, they very well could have if they so choose to with the bankroll they have. We would have a whole different story if Epic had chosen to fight Steam on the better revenue split instead of negative purchasing exclusives in a hope of making that back.
I'm actually not even sure how the heck Epic are supposed to make back the financial burden of exclusive purchases outside of Fortnite money. That doesn't seem very business savvy to me, but I also don't believe the Epic store is even conducive to developers with the clear lack of thought in UI storefront development and a need to rush concepts while the Fortnite gravy train is running.
In the interests of providing posters/lurkers all the info...
( https://kotaku.com/valves-rocky-road-to-better-communication-about-steam-1833504663 )
Yeah talk about totally misunderstanding the point he made there, that the issue was that they they allowed creating a page before reviewing the process, which in the case of R18 games is not a good idea. I would also add these quotes:
How much of that audience is on PC and not mobile/console, and is going to become a regular PC gaming consumer, instead of just jumping between F2P/online games or leaving the hobby behind though?
I mean Fyre, sorry for the misunderstanding :(
I was supposed to quote both you and the other guy, as I wanted to add some added quotes to your point.