They provide a SDK that allows for easy integration of achievements, multiplayer, VR SDK, Linux support, plus much more in the background. sure they could do 13% but then take away all steam does and you'd have epic store.
-
Ever wanted an RSS feed of all your favorite gaming news sites? Go check out our new Gaming Headlines feed! Read more about it here.
-
We have made minor adjustments to how the search bar works on ResetEra. You can read about the changes here.
IGN: Steam's 30% Cut Is Actually the Industry Standard
- Thread starter AHA-Lambda
- Start date
They provide a SDK that allows for easy integration of achievements, multiplayer, VR SDK, Linux support, plus much more in the background. sure they could do 13% but then take away all steam does and you'd have epic store.
It's even worse than that - if Valve starts locking down Steamworks features and has devs pay for them to compensate for a lower base cut, then everyone will lose those features, including EGS. Right now a large part of why EGS is even tolerable as a platform, is because Steam's infrastructure backend is holding up the ceiling, in terms of controller support, VR support, and community features.
As a customer, I'm in favor of being allowed to chose what I want to buy. But you're right in a sense:
If the floodgates were closed, a lot of those devs wouldn't struggle sales wises: Because they'd be denied a release.
The shovelwares and such has very little impact on those sales. It's not the shovelware selling and the good games bombing. If you keep track of monthly releases, there's a fact: There are too many good legitimate games coming out. Worse: the games from the previous months and years are still there.
If you want to curate, that'd means choosing, like Epic does. Sure, the chosen ones are getting a spotlight. The rest can eat shit and sit with a product on their hands and cant even release the fruit of their hard work.
That an indie dev think that is pretty weird. How would you react if you were not chosen ? Do you have that way of thinking because you will or have been chosen ?
If they didn't, maybe today you wouldn't be able to release your game... Save for going through the old ways: No self publishing and hoping for a publisher to pick you up... Or an XBLIG release.
The more the time goes, the more "Shovelware and asset flips are drowning my game" is starting to sound just a poor excuse that only Jim Sterling and few others actually give a damn about.
These games may be on Steam, but you have to go out of your way to look for them. No one is constantly showered by asset flips on the store main page and no one ever gave up on buying a good quality title because an asset flip happened to pop up in front of them first.
These games may be on Steam, but you have to go out of your way to look for them. No one is constantly showered by asset flips on the store main page and no one ever gave up on buying a good quality title because an asset flip happened to pop up in front of them first.
Then don't use it. Nobody is forcing you to sell your games on Steam, just sell executables through your website or whatever, Valve doesn't have any obligation to market your game either, it's not their job.
Yeah, this is something that a lot of people keep forgetting.
Unlike consoles generation, there's no such thing on PC as everything will be compatible indefinitely. While a game is releasing at a time, it's not only competing with other games released at the same week/month. It's also competing with games that were released in the previous months, years, even decades. Steam users are like that, they don't only buy the newest/hottest games available in the market, but also the older ones.
The number of Steam audience are growing each day, but the purchasing power would still be limited compared to the amount of games.
I'll sound harsher. But if shovelwares outsell you, it question the quality of your game or your promotion of it.
And, to carry on this thought - either someone will enjoy the shovelware game, or they'll refund it. In the first case, we should be glad that someone found a game they enjoy, in the second case, that consumer has tried a game, found it wanting, and can spend their money on a different game. Neither case is bad.
Valve rents 9 floors of office, 225 000 square feet. They quote 39-45$ rate, putting it near 10m$ a month. Not exactly free. This doesn't include multiple datacenters around world.
These features attract users and benefits both the developers and the users.
Its like choosing between a cheap dumbphone, or a more expensive smartphone that have much more useful features. Those with a 13% cut is a dumbphone in this analogy.
Last edited:
I don't understand the constant arguments over this. There is no "standard" that any company has to follow like it's some kind of rule or regulation. They charge as much as they can get away with. EGS do this because they can and have Fortnite as a cash cow. But there's no guarantee that they will keep it at 12% indefinitely if they become the market leader. Valve depends on Steam as a means of income. God forbids if they actually do profit from it or something right? Lol.
I've said it before and I'll say it again, new games are not only competing with nearly every old game ever made, but every other entertainment medium out there, and their entire back catalogue, which is increasingly instantly available. You've gotta compete with endless free entertainment on Twitch and YouTube. There's only so much money and so many hours in the day that someone can dedicate to entertainment.
Well, the issue isn't that the standard should never be touched. It's the recent attempt to criminalize it.
We had a one-year long smear campaign (that for some reason we all can imagine targeted Valve specifically, not even the industry as a whole) when the practice was constantly painted as downright abusive, which is bullshit.
As if Valve (or GOG or any other store doing the same) was robbing people by asking compensation for what they offered.
Also, what's up with the bullshit arguing we keep seeing, over how they could "cover the costs with less".
Duh? But they aren't in the business to "cover the costs". They are there to make a profit.
Developers who claim that the 30% cut is payment for hosting the game's store page and files have a fundamental misunderstanding of the games market. If that's all you got out of that deal then the solution would be pretty straightforward: Sell the game directly through your website and keep 100% of the revenue yourself. I think most developers would immediately agree that this 'solution' would be a death sentence for them but they are wrong on the cause for this situation.
I believe it was Jobbs who argued that customers are conditioned to buy only from Steam, but this sort of 'conditioning' is how the market should actually operate. Steam is by a huge margin the best service of its kind, with the biggest amount of features and policies benefitting customers. It's not some sort of mental conditioning that people are buying products from the seller offering the best service. It's buyers making the rational choice for their interests.
What Steam is offering developers, as others have already pointed out, is access to an audience of people willing to spend money on games. Steam gathered that audience by pioneering digital distribution on that scale on PC and offering the best service. Steam fought piracy by adding features around games that made them much more valuable compared to a pirated copy. It made a whole lot of people value a Steam game more than the game by itself, because all those features that come with launching on Steam do have value to people.
Now, I have no idea if the 30% price for that audience is too much, too little or just right. That is an issue for the industry to solve across the board and I do not care one way or another. What I do care about is developers and publishers trying to force people towards a specific service through the means of exclusivity because that negates the customer's ability to freely choose where to buy from. If developers want customers on their side on this, they should press Epic to drop exclusivity and compete through features, price and the overall quality of service. Otherwise customers will oppose them because it is in their best interests to do so.
Agreed. Valve doesn't expect anyone to buy games on Steam by browsing through the unfiltered New Releases list. That option is not even present on the store's main page. If you skip every single one of the more than a dozen recommendation systems and choose to browse through the unfiltered new releases, you can, but don't be surprised if the experience is not great.
I believe it was Jobbs who argued that customers are conditioned to buy only from Steam, but this sort of 'conditioning' is how the market should actually operate. Steam is by a huge margin the best service of its kind, with the biggest amount of features and policies benefitting customers. It's not some sort of mental conditioning that people are buying products from the seller offering the best service. It's buyers making the rational choice for their interests.
What Steam is offering developers, as others have already pointed out, is access to an audience of people willing to spend money on games. Steam gathered that audience by pioneering digital distribution on that scale on PC and offering the best service. Steam fought piracy by adding features around games that made them much more valuable compared to a pirated copy. It made a whole lot of people value a Steam game more than the game by itself, because all those features that come with launching on Steam do have value to people.
Now, I have no idea if the 30% price for that audience is too much, too little or just right. That is an issue for the industry to solve across the board and I do not care one way or another. What I do care about is developers and publishers trying to force people towards a specific service through the means of exclusivity because that negates the customer's ability to freely choose where to buy from. If developers want customers on their side on this, they should press Epic to drop exclusivity and compete through features, price and the overall quality of service. Otherwise customers will oppose them because it is in their best interests to do so.
Agreed. Valve doesn't expect anyone to buy games on Steam by browsing through the unfiltered New Releases list. That option is not even present on the store's main page. If you skip every single one of the more than a dozen recommendation systems and choose to browse through the unfiltered new releases, you can, but don't be surprised if the experience is not great.
I'm not sure where I said that it is? I was just pointing out how they don't really do anything for you at all to justify the 30% other than exist and be kind of the only game in town if you want to sell on PC. If there was a major competitor we probably wouldn't have to pay 30%
Yeah. My issue with this argument is exactly how you described it. It's not a crime for any of these companies to profit from a service that they have built. Companies exist to make a profit, not for charity. If developers don't like it, they can always sell their games elsewhere. If EGS want to undercut Steam, it's their money, it's their business. It's a free market. They can do whatever they want. Trying to portray one company as being more morally right than the other just seems hilarious to me.
Do Nintendo, Sony or Apple justify their cut? What are they doing for you? Valve gives you an access to the biggest audience on the platform and the most sophisticated client in the industry to work with. If there were no benefits to Steam everyone would've been using Itch.io or humble widget, and as far as I can see that's not the case.
Steam is over-earning (as we call it in the investment community).
First, the only reason Steam is charging less than 30% (on some games), is that Epic came around. They would continue with 30% for everything if Epic wasn't there, without a doubt. Epic coming around is already a massive win for the gaming industry, due to more options and increased competition in the marketplace. Before, if a publisher/developer wanted to distribute a game, they could either do it directly (which carries a lot of frontloaded investments in the platform) or go to Steam and pay the egregious take rate due to their monopolistic position.
Steam is over-earning in the sense that they capture more than their fair share of the industry profit pool, given the value they provide. Generally speaking, every industry can be simplified as: suppliers -> distributors -> customers, this is called the value chain and can often be extended. Steam falls in the distribution category and is an aggregator of supply (games) with a direct relationship with the customer and sells games at close to 0 marginal cost (digital distribution cost is minimal, only small % of payments).
Steam is probably ~60-70% operating margins, because there is minimal marginal costs of distributing a game. Most of the costs they have are fixed (servers/infrastructure/some R&D). The only reason why they wouldn't have even more than 60-70% margins is that they are using some of the margin to re-invest in sales and marketing (gift cards etc.), to increase sales and profits even further, but they don't have to. Stop thinking that 60-70% margins are necessary for Steam to provide the "features" that Steam-players love so much. Those are mostly investments made at one point in time, not ongoing expenses. There is a "one-time" cost for developing the feature (R&D/personnel costs), with very limited ongoing costs. As a result, there is no need for 60-70% margins to maintain/or develop more features over time.
60-70% operating margins are relatively common for marketplaces when they have gained a monopolistic position and scale. What do they provide to the value chain to "deserve" that proportion of industry profits? For developers/publishers, they primarily provide two things: (i) access to their customer base and (ii) infrastructure (features/servers/payments ecosystem). When the PC market was small (due to disregard from publishers due to high risk of piracy) and infrastructure costs were high, for most publishers it didn't make sense to invest in own infrastructure. The return on capital on that would often be lower than just distributing the games on Steam. However, that has changed. Infrastructure costs have come down significantly (due to large scale build-out of datacenters, which has made it more accessible and relatively cheap) and costs to implement features have also come down (a lot of these are commodities). As a result, it is a more viable option to distribute direct-to-consumer (the holy grail for publishers, and suppliers in any industry). However, not all publishers can do this, as there is still (i) infrastructure investments to be made and (ii) relationship with customers (players) need to be strong enough for customers to want to come directly. There are a few players where that is the case (i) Battle.net (Blizzard), (ii) UPlay (Ubisoft), (iii) Origins (EA) and (iv) Rockstar Launcher (Take-Two). For them, the 30% is way too high. Why should they give away an enormous part of the profit pool (while carrying virtually all the cost), just for distribution that they can do themselves? There is definitely a "take rate" that Steam would charge where these would come back and lean into the platform, but I suspect this is well below 10%. If Blizzard, Ubisoft and EA don't use EPIC at 12%, you can be sure that it will be lower than that. For the relationship between Steam and large publishers, Steam should charge ~7-8% (just an example) and as a result, they are over-earning by an incredible amount (30% vs. 7-8%) relative to publishers. At 7-8% take-rates, Steam would still make a good profit (they would probably need to cut down on sales & marketing). There are many market-places that charge these types of take rates that still make a good living.
The crux is, while they should earn 7-8% for the large publishers, there are also sub-scale publishers (where necessary direct-to-consumer investments are too high to justify), where distribution is worth a lot more. For them, there has (until now) been no other option than Steam, and they have had to pay the 30% take rate for a long time. What should they do? Make console games instead? No, there they pay the 30% too, but there the distribution is worth significantly more "value capture" within the value chain.
Console platform providers can much more easily justify a 30% take-rate platform fee: (i) upfront investments (multiple years of R&D and development of the console itself), (ii) low gross profits of selling the consoles (even though gross profit margin can now be positive, doesn't mean it is good) and (iii) no other option if a publisher wants to reach the "captive audience".
It doesn't matter that gross profit is now "positive" it is still incredibly low compared to other Microsoft products (typically 90%+ in software), there is no way in hell that they would produce consoles and sell, if it wasn't for the platform fees they then can generate over the life of the console. Their alternative use of capital is worth much more than that.
Now, from the publisher/developer point of view in terms of market-place distribution, there has been three viable options (i) PlayStation (Sony), (ii) Xbox (Microsoft) and (iii) Steam (Valve). All of them has charged the same 30% even though Steam has provided much less "value" than the other two. Because Steam has had 30% margins, publishers have typically been indifferent between Playstation/Xbox/Steam when developing games. But if the PC take rates come down from the 30% (which it already is doing), you can be sure that publishers/developers will prioritize PC as a platform, relative to Playstation/Xbox. Both Sony/Microsoft will be scared of this (and should be very scared). They should also be scared of cloud gaming/streaming platforms, which provides more competition on distribution for console equivalent gaming. Stadia for example, will definitely have lower take rates than Playstation/Xbox (I would guess somewhere in the 15%-20% range) and then there is "rumors" that Amazon will participate at some point, Tencent will do something at some point - and suddenly, you have a competitive marketplace (instead of a cozy duopoly). Microsoft/Sony's take rates will already be under pressure with their 30% when PC take rates go down, but will be under even more pressure down the line. Wouldn't be surprised if we in 10 years time see take rates in the 20%-ish range.
So for publishers, Epic matters a lot, they have been the key catalyst in providing an alternative to Steam, who subsequently cut rates. They have already won, to some extent. The "dream" scenario is Epic new player with low take rates -> force Steam to cut rates -> force Xbox/Playstation to cut rates -> race to the bottom where it makes economic sense for all. It is therefore critical for publishers to keep Epic alive (and make them successful), because it will benefit publishers/developers for the entire future of the industry. Once take rates are going down across the board, the publisher/developer captures more profits and they can in turn re-invest those profits in either (lower prices of games) or keep the profits (probably unsustainable). In 10 years time, I not only predict that F2P will continue to grow and dominate, but that the prices that has basically been the same for 20 years, will come down as the industry becomes 100% digital and take rates come down. The only reason it is not coming down right now is (i) physical/retail sales requires same prices as digital (otherwise it would die immediately) and (ii) below $60 for physical/retail doesn't make sense economically. Once those two barriers are removed (and take rates come down), the industry would benefit from lower pricing, to try to make gaming even more mainstream than now.
Steam could capitulate and go towards take-rates where they earn fair value capture - but why should they? They would forego a lot of profits for a long time. The risk for them is that they will become obsolete over time as other alternatives emerge and allow them to grow/become better. Steam could have killed Epic before they even started with matching the take rates of Epic (would be very costly in terms of profits), but there is no way that Epic would even have existed then. It will likely be a slow burn, because it is too painful for Steam to cut take rates right away, over-time that will allow Epic to grow bigger and improve their product (at some point, in a few years, the product offering with likely be equivalent), but they definitely could do it. I suspect that the only reason they are keeping their take rates for now (20-30%), is that they hope that Epic will run out of money and eventually lose, so that Steam can keep their take rates (it will be very difficult to raise them again if they do, that's why they are doing the "middle-ground" at the moment).
In my view, what Steam "should" do, I if I was a board member (it is very difficult) is to (i) lower take rates (accept that you are over-earning, had a good run, but in order to maintain dominance, need to cut it), (ii) try to price discriminate even further (what they do currently with offering certain take rates (i.e. the 20% above $50m)) -> because the value Steam provides is hugely different to different publishers/developers (worth 7-8% for big publishers but 30% for small ones)) and (iii) develop more games to make their supply unique and differentiated again (that's how they started). Then they could become a formidable (unpenetrable) platform again.
For Epic, what they are doing makes total sense. The Steam userbase has a high lock-in and provides better services. It is too costly (too much of an investment) to replicate all features immediately, because even then, the switching costs from Steam is high (library, friends, ecosystem). They need something else to win and get an audience, which is unique supply (exclusives), that's the only way they can realistically compete to earn enough money, that they can then reinvest in making the platform better. Epic has very smart investors, such as KKR (with large amount of capital) and the opportunity is to great to not go for it.
In the end, content/games matter the most, not the storefront, the publishers/developers are playing the long-game here and want to earn their "fair share" of profits over the long run.
First, the only reason Steam is charging less than 30% (on some games), is that Epic came around. They would continue with 30% for everything if Epic wasn't there, without a doubt. Epic coming around is already a massive win for the gaming industry, due to more options and increased competition in the marketplace. Before, if a publisher/developer wanted to distribute a game, they could either do it directly (which carries a lot of frontloaded investments in the platform) or go to Steam and pay the egregious take rate due to their monopolistic position.
Steam is over-earning in the sense that they capture more than their fair share of the industry profit pool, given the value they provide. Generally speaking, every industry can be simplified as: suppliers -> distributors -> customers, this is called the value chain and can often be extended. Steam falls in the distribution category and is an aggregator of supply (games) with a direct relationship with the customer and sells games at close to 0 marginal cost (digital distribution cost is minimal, only small % of payments).
Steam is probably ~60-70% operating margins, because there is minimal marginal costs of distributing a game. Most of the costs they have are fixed (servers/infrastructure/some R&D). The only reason why they wouldn't have even more than 60-70% margins is that they are using some of the margin to re-invest in sales and marketing (gift cards etc.), to increase sales and profits even further, but they don't have to. Stop thinking that 60-70% margins are necessary for Steam to provide the "features" that Steam-players love so much. Those are mostly investments made at one point in time, not ongoing expenses. There is a "one-time" cost for developing the feature (R&D/personnel costs), with very limited ongoing costs. As a result, there is no need for 60-70% margins to maintain/or develop more features over time.
60-70% operating margins are relatively common for marketplaces when they have gained a monopolistic position and scale. What do they provide to the value chain to "deserve" that proportion of industry profits? For developers/publishers, they primarily provide two things: (i) access to their customer base and (ii) infrastructure (features/servers/payments ecosystem). When the PC market was small (due to disregard from publishers due to high risk of piracy) and infrastructure costs were high, for most publishers it didn't make sense to invest in own infrastructure. The return on capital on that would often be lower than just distributing the games on Steam. However, that has changed. Infrastructure costs have come down significantly (due to large scale build-out of datacenters, which has made it more accessible and relatively cheap) and costs to implement features have also come down (a lot of these are commodities). As a result, it is a more viable option to distribute direct-to-consumer (the holy grail for publishers, and suppliers in any industry). However, not all publishers can do this, as there is still (i) infrastructure investments to be made and (ii) relationship with customers (players) need to be strong enough for customers to want to come directly. There are a few players where that is the case (i) Battle.net (Blizzard), (ii) UPlay (Ubisoft), (iii) Origins (EA) and (iv) Rockstar Launcher (Take-Two). For them, the 30% is way too high. Why should they give away an enormous part of the profit pool (while carrying virtually all the cost), just for distribution that they can do themselves? There is definitely a "take rate" that Steam would charge where these would come back and lean into the platform, but I suspect this is well below 10%. If Blizzard, Ubisoft and EA don't use EPIC at 12%, you can be sure that it will be lower than that. For the relationship between Steam and large publishers, Steam should charge ~7-8% (just an example) and as a result, they are over-earning by an incredible amount (30% vs. 7-8%) relative to publishers. At 7-8% take-rates, Steam would still make a good profit (they would probably need to cut down on sales & marketing). There are many market-places that charge these types of take rates that still make a good living.
The crux is, while they should earn 7-8% for the large publishers, there are also sub-scale publishers (where necessary direct-to-consumer investments are too high to justify), where distribution is worth a lot more. For them, there has (until now) been no other option than Steam, and they have had to pay the 30% take rate for a long time. What should they do? Make console games instead? No, there they pay the 30% too, but there the distribution is worth significantly more "value capture" within the value chain.
Console platform providers can much more easily justify a 30% take-rate platform fee: (i) upfront investments (multiple years of R&D and development of the console itself), (ii) low gross profits of selling the consoles (even though gross profit margin can now be positive, doesn't mean it is good) and (iii) no other option if a publisher wants to reach the "captive audience".
It doesn't matter that gross profit is now "positive" it is still incredibly low compared to other Microsoft products (typically 90%+ in software), there is no way in hell that they would produce consoles and sell, if it wasn't for the platform fees they then can generate over the life of the console. Their alternative use of capital is worth much more than that.
Now, from the publisher/developer point of view in terms of market-place distribution, there has been three viable options (i) PlayStation (Sony), (ii) Xbox (Microsoft) and (iii) Steam (Valve). All of them has charged the same 30% even though Steam has provided much less "value" than the other two. Because Steam has had 30% margins, publishers have typically been indifferent between Playstation/Xbox/Steam when developing games. But if the PC take rates come down from the 30% (which it already is doing), you can be sure that publishers/developers will prioritize PC as a platform, relative to Playstation/Xbox. Both Sony/Microsoft will be scared of this (and should be very scared). They should also be scared of cloud gaming/streaming platforms, which provides more competition on distribution for console equivalent gaming. Stadia for example, will definitely have lower take rates than Playstation/Xbox (I would guess somewhere in the 15%-20% range) and then there is "rumors" that Amazon will participate at some point, Tencent will do something at some point - and suddenly, you have a competitive marketplace (instead of a cozy duopoly). Microsoft/Sony's take rates will already be under pressure with their 30% when PC take rates go down, but will be under even more pressure down the line. Wouldn't be surprised if we in 10 years time see take rates in the 20%-ish range.
So for publishers, Epic matters a lot, they have been the key catalyst in providing an alternative to Steam, who subsequently cut rates. They have already won, to some extent. The "dream" scenario is Epic new player with low take rates -> force Steam to cut rates -> force Xbox/Playstation to cut rates -> race to the bottom where it makes economic sense for all. It is therefore critical for publishers to keep Epic alive (and make them successful), because it will benefit publishers/developers for the entire future of the industry. Once take rates are going down across the board, the publisher/developer captures more profits and they can in turn re-invest those profits in either (lower prices of games) or keep the profits (probably unsustainable). In 10 years time, I not only predict that F2P will continue to grow and dominate, but that the prices that has basically been the same for 20 years, will come down as the industry becomes 100% digital and take rates come down. The only reason it is not coming down right now is (i) physical/retail sales requires same prices as digital (otherwise it would die immediately) and (ii) below $60 for physical/retail doesn't make sense economically. Once those two barriers are removed (and take rates come down), the industry would benefit from lower pricing, to try to make gaming even more mainstream than now.
Steam could capitulate and go towards take-rates where they earn fair value capture - but why should they? They would forego a lot of profits for a long time. The risk for them is that they will become obsolete over time as other alternatives emerge and allow them to grow/become better. Steam could have killed Epic before they even started with matching the take rates of Epic (would be very costly in terms of profits), but there is no way that Epic would even have existed then. It will likely be a slow burn, because it is too painful for Steam to cut take rates right away, over-time that will allow Epic to grow bigger and improve their product (at some point, in a few years, the product offering with likely be equivalent), but they definitely could do it. I suspect that the only reason they are keeping their take rates for now (20-30%), is that they hope that Epic will run out of money and eventually lose, so that Steam can keep their take rates (it will be very difficult to raise them again if they do, that's why they are doing the "middle-ground" at the moment).
In my view, what Steam "should" do, I if I was a board member (it is very difficult) is to (i) lower take rates (accept that you are over-earning, had a good run, but in order to maintain dominance, need to cut it), (ii) try to price discriminate even further (what they do currently with offering certain take rates (i.e. the 20% above $50m)) -> because the value Steam provides is hugely different to different publishers/developers (worth 7-8% for big publishers but 30% for small ones)) and (iii) develop more games to make their supply unique and differentiated again (that's how they started). Then they could become a formidable (unpenetrable) platform again.
For Epic, what they are doing makes total sense. The Steam userbase has a high lock-in and provides better services. It is too costly (too much of an investment) to replicate all features immediately, because even then, the switching costs from Steam is high (library, friends, ecosystem). They need something else to win and get an audience, which is unique supply (exclusives), that's the only way they can realistically compete to earn enough money, that they can then reinvest in making the platform better. Epic has very smart investors, such as KKR (with large amount of capital) and the opportunity is to great to not go for it.
In the end, content/games matter the most, not the storefront, the publishers/developers are playing the long-game here and want to earn their "fair share" of profits over the long run.
I'll take it that, developpers, following a reduce in cut, will implement features on a good will, right ?
So from there, every games will include the same extensive remapping options ? Cloud saves ? Every games will have full controller support directly implemented ? I take it that everything that can be implement witht he steamworks API will be implemented in games with their own solution, right ?
I also take it that refunds will be handled too ?
There is room for improvement on that 30% cut indeed. But to say that "it's not justfying by anything except being there"' is ignorance.
PC is an open platform, as people frequently point out when arguing how wrong it is to have launcher exclusives. Consoles are closed platforms operating on proprietary hardware. Apples and oranges argument
They do quite a bit more than just exist though. The reason most of the other major competitors have not outdone them is
mostly because of the various SDKs and APIs they provide to developers.
I don't know where this idea that they have never had major competitors even comes from.
We have literally seen some of the biggest gaming related software companies on the planet (Microsoft, EA, Ubisoft, and now Epic) come out in recent years and directly compete in the same space with varying amounts of success.
And? That doesn't answer the question of what Nintendo, Sony and Apple are doing for you to justify their cut.
People forget the hype Origin had and how it actually launched in a competitive state, only to fail misserably (and basically see no major improvements since its launch as Origin). Or heck, how uPlay also tried to get third party games, only to quickly can that part and stay as a publisher only launcher.
Edit: Forgot Amazon! Amazon tried to make Twitch their own store only to fail (and that was before Discord!)
Steam also provides a 0% cut option since day 0 (generating the key and selling it outside of Steam), something only Itch.io provides.
Steam announced the 20% cut before Epic announced EGS with their 12% cut.
You're right: It's an orange and apple argument.
As a dev, what difference does it make ? The only difference is the following "you have no choice on a closed platform".
So if you're point is "as a dev, they deserve that cut more because they force me"... that's special.
Unless you want to tell me "R&D for hardware they sell at a profit".
Sony and Microsoft both take 30%. A major competitor of MS is Sony, and a major competitor of Sony is MS. By your logic, because there's more than one game in town in the console industry, each company has a major competitor, and the store cut should drop.
Why has it not?
I mean, this is actually a really good question, because it's possible that were MS to drop their cut, they'd find themselves with more third-party games than Sony. Yet they still don't drop their cut.
If anything, competition was quick to align on the idea of an online paywall.
Creating hardware and putting it into peoples homes
And what's with all the whataboutism? I'm not even here to defend console storefronts. I have no experience with them
Right. Because a) companies want profit, and b) capitalism sucks. Honestly, some people's ideas of economics and retail markets suck. As I've said before, I don't know a lot, but at least I don't think competition will magically make things better for creators.
The whole article in the OP is (valid) whataboutism:
Or, rephrased: "Valve charge 30%? What about others in the industry? Oh."
Also, if you think the only possible value for a company in the industry is to create hardware and put it into people's homes, and not, say, develop features or APIs... I don't know what to say.
lol. The same old ass tired argument about the console R&D that doesn't make any sense from the developer's perspective, not to mention that the shit is selling for profit since day one.
Whataboutism? That's the same industry we're talking about.
Imagine if there was a way around this, like selling that hardware for money.
Steamworks API, VR SDK, actual reviews so I can see if a game is crap or broken, steam refunds that no console even has, community forums and discussion page.
New steam library tries to keep older games relevant by posting news when games have updates. Background statistics for developers to see and use.
A very generous amount of steam cloud save space. They're constantly trying to figure out how to keep older titles in the spotlight that might get forgotten so that developers just don't have day 1 sales and that's it. They don't charge for you to release updates to your games unlike older console practices.
But steam does nothing for that 30% right.
The whole reason we can even have this argument is because steam has set themselves a high standard that themselves have trouble beating.
Is steam perfect? No the client is veeeeery slowly being updated, but there's a shit ton worse than steam and I'd even argue the 30% they charge is much better for consumer and developer than the 30% other platforms charge.
You're guaranteed all users can play your game online on steam, on console they are like behind a pay wall like plus and gold, otherwise they can't enjoy your new game online.
I could go on, but I need to drive now...
Don't be so naive. Steam 100% knew that Epic store was launching with those take rates (negotiations take months). It was widely known in the investment community what the "play" was on Epic (when KKR etc. invested in October 2018). The play was to leverage Fortnite's success to launch Epic Game Store, negotiations take months. Even if you don't know it, doesn't mean the key market participants do.
Well, nobody else is giving me a comparable experience to Steam in the PC space: nowhere near the selection of games, the features, the convenience. All of that is built on tech that Valve developed, which benefits me as the consumer. If it was so damn easy to kick Steam's ass, I imagine Microsoft with their endless reserves of money would have done so long ago, and yet here we are. (And yes, in an alternate universe where Microsoft succeeded, you would still be paying 30%.)
EGS is supposed to be that "major competitor", and Sweeney has definitely trumpeted it as such, but after all the sound and fury of their exclusive buying, its becoming increasingly clear that they're not exactly competitive in terms of sales volume.
I mean, if you hate that 30 percent cut so much, just generate a bunch of Steam keys of your game, then flip them yourself for a 0% cut.
So... because they make hardware that they sell at a profit, they deserve that 30% cut more.
According to you, providing a platform to people means they deserve that cut, right ?
Okay, then following this logic: Valve expanding their platform which leads to its wider adoption, thanks to features means they deserve that cut as much ?
I mean with xbox and ps4 the platform is literally the platform. That's their hardware. Steam exists on top of an open platform, PC, that everyone has and everyone would continue to use if Steam vanished tomorrow.
And I'm just expressing some discomfort with paying 30%, bringing up sony and nintendo don't make me stop feeling that discomfort. I think in their case, again, it's a bit more justifiable since they created their own hardware and directly created that conduit to peoples homes, people who don't own PCs, but regardless if you agree with that or not I still feel the same discomfort with the two pounds of flesh Steam extracts
I'm just gonna leave this here:
If the 30% cut tends too low: i.e. to 20% then 15% then 10%... over time, the payments to Steam for their service will not cover the necessary labour, energy etc. costs to sustain the service. If Steam were to continue with this trend anyway, as Epic has tried to start, prices would become lower and seem great, but less services (including games) will be able to developed, maintained and marketed.
Other platforms would be forced to follow, driving themselves to bankruptcy.
And indie / mid-tier devs can't afford (or even want) to play that game and pivot out into some additional market to support this change.
Only loss-leading companies and large market share holders in the game platform market would be able to try to compete, and likely turn into an oligopoly, like the cable companies were (are?) in the U.S.
If the 30% cut tends too low: i.e. to 20% then 15% then 10%... over time, the payments to Steam for their service will not cover the necessary labour, energy etc. costs to sustain the service. If Steam were to continue with this trend anyway, as Epic has tried to start, prices would become lower and seem great, but less services (including games) will be able to developed, maintained and marketed.
Other platforms would be forced to follow, driving themselves to bankruptcy.
And indie / mid-tier devs can't afford (or even want) to play that game and pivot out into some additional market to support this change.
Only loss-leading companies and large market share holders in the game platform market would be able to try to compete, and likely turn into an oligopoly, like the cable companies were (are?) in the U.S.
You're right, people still would use that platform. Would they buy on it though ? That's the question. Which has an answer btw. Why was the piracy rates far bigger a few years ago ? Why did it drop ?
By pushing the argument to one specific platform, it kind of created the narrative that Steam was an outlier and what they did wasn't "fair" though.
They also charge people for online. How many percentage points does this justify on this scale?
There is an argument to be made that Steam is a platform, as it hits every "usual" platform point, except for hardware. It has features, DRM, a "closed garden" market (which is not really closed, but an ecosystem designed to persuade buyers and retain consumers). Also, they sell hardware.
It's a curious one, but compare Steam with Battle.net or Origin, and there's a definite difference there that pushes it more towards being a platform than not.
Lord, that's some emotive language there. Referencing The Merchant of Venice for a store cut? That's a hot-take.
Last edited:
A whole bunch of devs don't want to pay that 30% cut period. The difference is it's far easier to force down that 30% on an open platform like PC through competition and the fact you can have infinite storefronts than in the console market where you either have to force one of the big three to lower their cut or try to break into the market with hardware (which is a very difficult and expensive endeavor to do).
There's a reason why Steam is under fire with this. It is by far the most easiest to attack. If that cut successfully becomes industry standard on PC then that can be used as a launch pad again console cuts but not before. It's simply not feasible.
I think on balance Steam has been a great thing for PC gaming. I'm just speaking from my minority position as someone who will be using steam to sell something.
I'm not sure why everyone is so extremely in favor of Steam making the most money possible on the backs of devs. How does it hurt you if devs got a bigger cut than they do now? If anything it'd help you since devs having more money, especially in the case of indie devs, leads to better games existing
The fact that MS and Sony created hardware doesn't bear any relevance to how they operate their digital stores. They charge the same cut and then they charge users for using online and cloud saves. If anything multinational corps like Sony, MS and N should be the first in line to change.
You know how PC gaming landscape looked in the 00s before Steam obtained it's current status right?
The problem, as I've said before, is not that Steam is under attack, but that they're the only ones under attack, and there's no promotion of other stores that are better for devs/pubs. Man alive, Humble take less than Valve, but even so not every publisher has their game on Humble.
Yeah, and a lot of people also don't want to pay taxes.
Or would love to pay their employees below the minimum salary.