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What cut do Valve actually take from devs? Is it really as high as some people think? Lets find out.
- Thread starter Deleted member 1849
- Start date
So you can't say higher cut lead's to more game's , stability and hiring when the extra fund received can be used as higher bonus to an executive of the company, mismanagement of funds etc. You are just hoping for the best case scenario that it will directly effect the position of the developer's. Maybe it will for small indie developer's but big publisher's don't work that way.
The long and the short of it is for me, can I buy Epic store games from 3rd party sites and look round for better deals?
If the answer is no, then why would I ever use the Epic store?
If the answer is no, then why would I ever use the Epic store?
...if the store is taking a smaller cut, developers have more margin they can play with to lower prices to compete with other games.
If you want the lowest price possible, you want selling games to be as cheap as possible for developers. Making it more expensive to sell games by having stores take higher cuts will raise prices even if it gives you the false sense of paying lower prices when different stores compete with each other.
Some times people pay the regular price for things. The OP lays that out in detail. You could also use the EGS to get a lot of good, free games without buying anything.
Think you are just trolling at this point.
No, for the lowest prices, I want price competition. There are no incentives otherwise. The Epic store is all about removing that, if you are reducing the number of suppliers then prices go up.
That coming from the poster who argued with a common sense statement then agreed with me in the same post. Pot meet kettle.
Can you show that lower developer cuts result in consistently lower prices for the consumer? Because that doesn't seem to be the case so far with the Epic store. This is pure trickle down economics. "If companies make more money surely that will trickle down to the consumers" which demonstrably doesn't happen. Are AAA games any cheaper when Activision make more profits?
Price competition makes absolutely zero sense in a market with a marginal product cost of 0, honestly.
EGS is price competition on who takes the least cut, sure. It's very much competing - for the developer's attention, which are the ones setting budgets and prices anyway.
Square is living on a 0.43% profit margin this year.
You think 10-20% more cashflow wouldn't cause them to hire more and produce more games?
It's pretty simple, really.
A product gets greenlit if the management things it'll be profitable.
If revenues increase by (88/70) 25%, you think more or less products will be greenlit?
You can basically spend 25% more and reap the same rewards.
Because you cut out Valve.
(25% is an extreme case, but still.)
And yet that's what we get with key sellers. And what we're not getting with the EGS.
And yet EGS wants to have their cake and eat it to by locking out all third party stores and yet want to argue that they are competing on price.
This thread is lots of EGS defenders attacking the OP for using slightly generous averages for ths numbers provided and you try to illustate your point with such an absurd example of hyperbole, that wouldn't happen in a million years?
BTW why in the world would Square not hit the numbers needed for the 20% cut? Especially being a major AAA publisher too? Your numbers are absurdly disingenuous and completely ruin your point.
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If devs don't lower prices then Steam should keep making a huge profit margin so Gabe Newell can have more billions, isn't a compelling counter-argument. Besides, the industry has shown over time that rising revenues has led to lower game prices, especially adjusted for inflation. New games in the early 90's cost about $110 in today's money, just for what you got at launch (inb4 "season pass"). AAA games at $60 usually have vastly more content and detail than 10-20 years ago, and prices haven't risen with inflation. We also have F2P games, indie games cheaper than a Starbucks, etc. When PS1 came out games were cheaper than N64 and SNES because the cheaper physical costs were passed on to consumers. Wages keep rising. Consumers have absolutely benefited. It's cheaper than its ever been to enjoy this hobby.
It's exactly how it works. How do you think these stores makes discounts ? By eating on their cut. But a 50% cut is pushing it too much.
You're literally arguing that you get lower prices by having to pay a middleman lol. This is economics 101.
Look all around you. Game prices have never been lower and a lot of that has to do with the reduced cost of distributing games. Yes, even with AAA -- game prices would be $100+ today if prices remained consistent from the 90s (and the cost of making games has risen faster than inflation). But it makes no sense to only focus on AAA. Much of the industry is F2P and indie.
EGS is brand new, has a very limited selection of games -- there hasn't been enough time or volume for price competition to normalize around a 88/12 norm (there's not even a 88/12 norm yet).
All these comparisons to trickle down economics are just so wrong it's not even funny -- Valve taking a higher cut from the developer, pushing the developer to keep prices high enough to compensate for the store cut, doesn't put any more money in your pocket! Pretending like games don't compete with other games on price just flies in the face of all facts (hint: when games stay the same sticker price, they compete over giving you more value for that sticker price). There are so many fundamental misunderstandings of economics in these threads.
Think through the possible reasons why they can offer those discounts -- and think about how some of those activities would naturally become unnecessary when games are sold with lower store cuts (or directly to customers).
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Because clearly it isn't happening in the Epic store and it is happening with steam key sales. Sorry, but these are observable effects.
You just can't argue that it might happen, when the thing that is being promised shows no sign of happening.
User Banned (5 Days): Antagonizing other members over a series of posts, dismissive behavior, and previous related infractions
That's it folks. It's been four months already. The experiment is over. Close it all down, boys. Nothing will ever change in the future, shut it down.
That is how it currently works with games on Steam.
I paid: ~€35 for DMCV, ~€49 for Sekiro, ~€40 for Hitman 2 Gold Edition
All of those would cost me at least ~€60 (and ~€90 for Hitman 2) directly on Steam, or of course: EGS.
...Are you completely daft? We have documented evidence that Epic is deliberatley shutting out ways of lowering prices like with third party stores. And you want to claim Epic is doing the opposite of that?
If you dont want trickle down economics comparisions then you and Sweeney can stop using those talking points when it comes to devs not allowed on the stores and games prices. it is as simple as that. Dressing it up with fancy language doesn't change the underlying point that Epic keeps trying to tout in their PR.
Absolutely no evidence has been provided that it will happen.
I could say that tomorrow the sun won't rise, are you going to agree with me that it seems like a likely outcome?
OP
OP
I was real surprised to see this tonight! Happy they decided to cover it.
I thought they did a really good job of covering everything, although I still am planning on adding to this at some point. I did want to discuss certain things more. They do a far better job than I did to highlight the extra features that Valve offers, among other things.
This is a tangent, but - game development prices have also never been higher, they're literally an upward slope on the graph. Driving game prices down will only result in more GaaS, more MTX, more subscription-only games, and less and less risk-taking and innovation because there are only so many people to sell games to.
Now that is bizarre.
Who wants to pay full price when they could pay less?
This thread is a bit flamey, but I'd like to look at this in a different way.
*why* is valve giving keys out for free to GMG and stores like it? *why* are they passing on taking a cut?
It seems like the expected value of customer ecosystem engagement must exceed the value of a cut of 3rd party seller revenue, right? In fact, Valve must expect that the value of 3rd party sellers exceeds the value of the traditional 30% cut of customers they would have otherwise.
Some folks seem to be implying Valve is being charitable with it's free key policy, but I do not buy it. It's nice that customer interests and seller interest are aligning right now, but i don't think that's necessarily permanent, and I don't think it's anything but incidentally pro-consumer.
*why* is valve giving keys out for free to GMG and stores like it? *why* are they passing on taking a cut?
It seems like the expected value of customer ecosystem engagement must exceed the value of a cut of 3rd party seller revenue, right? In fact, Valve must expect that the value of 3rd party sellers exceeds the value of the traditional 30% cut of customers they would have otherwise.
Some folks seem to be implying Valve is being charitable with it's free key policy, but I do not buy it. It's nice that customer interests and seller interest are aligning right now, but i don't think that's necessarily permanent, and I don't think it's anything but incidentally pro-consumer.
I don't think anyone thinks it's from the goodness of their heart. They definitely benefit by bringing people into their ecosystem.
Incidentally pro-consumer works for me. It certainly beats incidentally or deliberately anti-consumer.
Besides the fact that it should be powerfully obvious that valve benefits from their key generation system, it's a marked difference from the way we would expect rich corporations to operate.
The key generation system is good for valve as much as it is good for everyone involved. Publishers and developers benefit. Outside businesses benefit. Users benefit. And I don't think it should be that hard to see here that the entire market benefits. That's an extraordinary forward-thinking solution.
And lest we think this an incidental happy accident, I would point to other valve policies and initiatives that help everyone involved. Some even with a nebulous benefit to valve and obvious benefit to everyone else.
In at least some initiatives, including this key generation, they are doing things in their own interest, but in a unique way that benefits as many as possible. This is way more forward-thinking, consistently friendly, and outright responsible behavior than I expect farm a business entity with this kind of power.
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One very big key thing a lot of people are missing in this whole 'Devs need more margins because games cost more' thing is that margins aren't what devs need. Devs need profit. It doesn't cost any money to actually distribute a copy on Steam - there is no unit cost. A platform being better for gamers is inherently better at this as it will lead to people being more likely to continue shopping on it, enjoying it and buying more stuff on it. It's important to remember that the consumers are the target audience, not the publishers, for a healthy market.
Valve has had 15 years of market dominance to screw the little people and the consumer but they have declined. It's clear their philosophy is to get the largest userbase as possible even if that means passing on some profits for expectation of future profits. They make a killing on all the transactions within the Steam Marketplace.
He's not daft, he's making a perfectly legitimate point. People are extrapolating a snapshot of the start of EGS into the future as if it will be forever static and have no effect on things (and if they acknowledge effects, it's conveniently only negatives ones).
And you're spreading misinformation. Epic has already opened it up to Humble and we'll likely see more options in the future as they continue to build out their platform. Tim Sweeney has stated he's completely supportive of third party key sales. The exception being for games they've signed exclusive deals with — which makes sense because game sales are how they recoup those costs (they've actually already made an exception to this rule with their Humble arrangement).
Yeah I think there's some truth to this and it's something to keep in mind.
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Let me answer your first question:
*why* is valve giving keys out for free to GMG and stores like it?
Valve aren't.
The developer or publisher can generate the keys for free, however.
Wrong. Valve is giving the keys out. They're keys that are generated from the Steamworks API, are registered with Steam and unlock the games on the Steam platform. Valve does not charge these developers any fee or cut of the generated proceeds with key sales.
Developers giving the keys out would be for cases like Witcher 3 where they are selling keys for their own website and they handle the distribution.
The developers ask for the keys from Valve and valve generates them for the developers, they can then be used as the developers want.
Valve doesn't deliever the keys to where-ever, the developers dont even have to tell Valve what the keys are for.
I don't really see the point. Sure, publishers and devs are giving the keys to GMG. But the effect is the same. Valve knows their keys are going to GmG with no cut. It's a distinction with very little difference.
actually they dont, valve doesn't require developers to explain why they want keys, unless Valve things something is wrong with how many they are asking for.
I guarantee you that Valve is aware of GmG and knows where the keys come from, even if they aren't asking explicitly.
But that's not the same as
Valve knowing where keys came from, and knowing where keys are going are two very different things, and it's the duty of the dev/pub to truthfully and accurately inform Valve via the key tagging system:
(From https://partner.steamgames.com/doc/features/keys )
Good stuff JustinP! No one here has a Crystal ball to know what the playing field will look like this time next year!
Because by making the person still have to download Steam to use the key, they're hoping that person will then now use that installed store to buy other games, aka a loss leader, same strategy where grocery stores have their free samples in the back so you walk past other product, same reason Walmart puts cheap items and their clearance shelf in the farthest back corner of a store they can manage; to get you to look at and buy all the other stuff they sell when you're coming in for what you have to get from them.
And this is why Valve also bans uPlay from showing it's store if you launch Ubisoft games from within it's launcher, because they don't want you to see other stores from within their store. (If you launch uPlay outside of Steam, suddenly the store tab will show up).
EGS will also have key generation, so this hubbub about third party keys is merely temporary.
Yes, but for how long is it "merely temporary"? Also, what type of key generation? I seem to remember something about the Windows Store having key generation limited to 500, and then the dev/pub having to jump through hoops to request more. Though I'm not certain how accurate that was, the point remains - key generation that is (to all intents and purposes) unlimited and in the hands of the pub/dev is the ideal, and given that EGS does not yet currently have a key gen system (and no specific date is set for it) means that the "hubbub" is valid.
Windows Store always had silly key issues. I mean, the previous Games For Windows used the same keys for all games. Meaning you could use your Halo 2 key to unlock Fallout 3. Given you can't unlock other EGS games with a Division 2 retail key, we can assume Epic has at least cleared that bar : p
They're apparently throwing all that out anyway and essentially re-using the Xbox store backend for Windows in the future.
Can't we say the same thing for all the people talking about all the good Epic is going to do? You seem to think that with Epic's revenue split and all those publishers/developers that received the extra money will do nothing but good things. All that extra money 2K got will ensure better games, more games, and better developer stability. You seem to think that Epic wants price competition even though so far everything they are doing shows they don't. One store partnership doesn't show they are. We don't even know exactly what the terms were between Humble and Epic.
The negative aspects of the EGS are actually happening right now. There are people that can't play those exclusive games because the EGS isn't available to them. For some regions they are priced so high they can't afford it or cost more resulting in less money for other games. Some are priced out because, according to Epic, they live in "developing countries" and as such need to pay payment processing fees to buy games on the EGS.
Those are all negatives of the EGS that are happening right now and effect real people. So, of course, people will focus on real tangible negatives as opposed to wishful thinking positives that have no real proof they will affect anyone but the publishers bottom line.
I don't think they can sustain themselves on exclusive deals so if they don't take this time that the exclusives buy them to get competitive with Valve in other areas I think they'll just fail and all this will basically be moot.