The former Paradox Interactive CEO thinks "platform holders" 30% cut is "outrageous"

Just to provide a perspective on that number:
Unless recently changed, 30% is also what Google and Apple takes on transactions at their marketplaces. Apple takes an annual developer fee of $99 in addition, and they both have a one time fee of $25 per app.

Steam is very much the Google Play / Apple Store of PC gaming.


Last edited by Beamboom on 2 Jul 2019 at 1:30 pm UTC

Paradox has some outrageous DLC pricing of their own though... :-)

Counter argument for you Paradox:

• For their cut of the sale, Valve hosts your games indefinitely and provides countless services for free, such as free DDOS protection by running game network traffic through Valve's network, free cloud saves hosting, game streaming (Twitch style), free remote game streaming (Stadia style) which runs off Valve's network as well, plus provides features like Proton that gives Windows only games extra sales on Linux. How do you expect Valve to pay for all those things?


• 30% is the starting rate, it drops to 25% after $10m USD in sales, then 20% after $50m USD of sales. $10m USD in sales is easy to hit for a popular mainstream AAA game, for a game like Sekiro for example, that's only 166,666 copies sold, and $50m USD is only 833,333 copies. It's safe to say Sekiro has blown past both of those numbers. Sekiro: Shadows Die Twice, across all platforms (don't have Steam only figures handy) sold 2 million units in the first 10 days of release, at release it had 125,000 concurrent players on Steam, so it likely hit that 25% threshold in the first 24 hours and quickly hit the 20% threshold in the first week. It is highly likely several of Paradox's games have hit the 20% threshold, such as Cities: Skylines, which according to SteamSpy has sold between 5m and 10m copies.


• Paradox sell their games outside of Steam as well and have their own store, and because Steam allows for free key generation and offer an API for account linking and game activation, Paradox accounts can link with Steam accounts, so it doesn't matter where you buy your game (Steam or Paradox) your game will be activated on both accounts. Games sold from Paradox directly, pay no royalty to Valve/Steam at all, Valve effectively hosts those sold units of the game for free. For a game already at the 20% threshold, every sale outside of Steam just lowers the rate even further.
  
  (Personally I've bought my Paradox games directly from Paradox in the past to support them since they strongly supported Linux. Then I've activated those games on Steam, to enjoy Steam's service and keep all my games in one place. I'm sure others have too, otherwise Paradox would not have bothered setting up their store.)


• If we want to talk about 'outrageous fees', lets talk about how much Paradox charges for some of their games. The total cost of buying Cities: Skylines for example, is $30USD for the base game, plus $180USD for all the DLC, for a total price of $210USD for the whole game.

Paradox has some outrageous DLC pricing of their own though... :-)

Major expansions around $20 and minor story packs around $10 seem very reasonable to me. Keep in mind that they get less than half that after platform fees, currency conversion and taxes.

They can make the choice to not publish on Steam if they are not happy....
As I have the choice to not buy their game if they are not on Steam...

They can publish their game directly, they have a good user base...
Then they can work to maintain the shop, the servers, the cloud save, the workshop...

I just can't understand those people who buy a product but don't want to pay the price...
Just don't publish on Steam and make it yourself if you are not happy with the Steam price...

But they probably make more money on Steam that publishing their games themself....

Lol, outrageous... it's not as if anyone was forcing developers to publish on their platform xD

Steam is invaluable because of the recognition and discoverability in addition to all the services they offer for that cut. It's worth well over 30% IMO, if they wouldn't publish on Steam they would need to compensate the cut with price of server hosting, harder cross-platform support and promotion, which are IMO much more expensive than 30% of the revenue.

When you consider transaction fees the 30% becomes something closer to 20%. Is it worth it? If you don't think so, feel free to put your game on GOG or Itch or BMT Micro.

Actually, do so anyway. You can tell your customers to buy there instead of on Steam to support you. And maybe some of your fans will buy copies on multiple sites.

I totally do not agree with all that valve bashing.

First of all, many stores, including google and apple do charge 30%
Second, the most expensive part for Valve is surely the CDN network in lots of cities in many countries. That's not just "let's put a rootserver somewhere and mirror all the data", it costs tons of bandwidth (which is not free!), power and servers.

Given the amount of traffic steam generates as seen here https://store.steampowered.com/stats/content/ .. I do not even want to criticize them in any way, you double these values with their internal traffic by the way, since surely no server holds all the game's data on its disks.

Also consider what e.g. microsoft charge here, given the fact that you have to pay to play as a customer - I am talking XBox live - which is outrageous to me. It's like: I bought a game and paid the share to microsoft, to the devs, and have to pay again to microsoft just to play it online. Just imagine Valve charging people for going online with counter strike?!

The transaction fees are about 10-30 US cent for each transaction + a few %, depending on the used method, which leaves for every party pretty much nothing for indie games sold for < $1

Also Valve offers lots of support there for the customers, without even contacting the Devs first, they are doing a pretty good job as far as I am concerned whenever I contacted them.

30% is a lot, yes, but it is imho fair, given the total one gets from valve here, also the devs are spared the transaction fees, chargeback fees, the network providing downloads and patches, partially support, partially even marketing - since steam is a huge platform to make your game noticeable to players.

It's like a "pay 30% and forget about everything else"-fee, honestly I would go with that if I was a dev.
Other companies like Epic may charge less, but they sell more expensive titles and I do not see indie games there for a few bucks, which create little revenue for everyone.

I agree, it's a lot. The problems are :
- Desktop gaming might become more profitable if the cut is reduced, but consoles don't care about Epic.
- Players don't want low-cost platforms like Epic sh*t. And Linux gamers just want... games lol.

We need to find a way to help small game developpers (sorry I won't cry for these big AS with their lootboxes and all sorts of microtransactions) get a better cut. But if Epic (or anyone wanting to help with a marketplace) can't make a real "platform" and if Nintendo and
Sony don't see a real marketing "plus", nothing will change.

So : Gamers need to be vocal ! Maybe even say out loud : "we will by next gen consoles if the cut is better there and come to Epic Store if it's no longer a sad joke for it's customers"

Paradox I love you guys and I love your titles but when it comes to pricing you're not one to talk you should actually keep a damn fucking low profile on this one.
Don't get me wrong here your games are worth every penny that's been asked for and then some ...
Yet going on a rant about how much that cut is outrageous and saying that Valves just siphons out the market is just you showing your greed here ...

Just as some added perspective, Valve seem to take a large amount of money from the Dota 2 Battle Pass.

"This doesn't cost anything."

Sure, Steam should be basically free.

This guy fits the EGS bandwagon quite well.

I'm not saying Valve are evil. I might have given that impression, so allow me to say that they are investing in areas that are useful to GNU/Linux users. That doesn't mean they don't need a bit of competition though. That 30% cut is from lack of competition more than anything else, and I think developers are starting to suffer slightly from it. If only the epic store could adjust to being _healthy_ competition, then it might be alright.

Hell if anything the cut percentage should go up the bigger the sales and go down for indies ... but that's just me being a commie ...

I feel like so many people, including the Paradox CEO and Epic Games CEO, just completely ignore the fact that it's not strictly a 30% cut on purpose and just feel the need to constantly say '30%' as a form of misinformation.

It's a 20%-30% cut, depending on sales. For almost all games that sell over 200,000 copies, it's actually a 25% cut which is below industry standard. And it only applies to sales on Steam, not to sales outside of Steam.

For high selling games that are also sold outside of Steam via key resellers, etc, the true cut could be as low as 15%-18%.

Steam provides a lot of network gaming for free while it is not free for them and so on. While it is true that in some cases Valve cut is expensive given all the services provided and the ability to buy keys outside of Steam it is not that much.

I feel like so many people, including the Paradox CEO and Epic Games CEO, just completely ignore the fact that it's not strictly a 30% cut on purpose and just feel the need to constantly say '30%' as a form of misinformation.

They also seem to leave out any information about what Valve is actually spending money on, what none of the other companies are doing: R&D... open R&D that benefit those other companies too.
If Valve did not exist, we were probable locked into a store with DX10 as the best graphics API, paying $120 for a game.
People need to adjust to the idea that development costs money, and Valve can take a fee from a sale to pour that into development. In return the development usually benefits all.
Wine took huge leaps, and wine is also used on androids to play old windows games (with an x86 emulation layer).
If this continues, we could be playing DX12 games on android, without involvement of Valve...
So yeah, all those other stores should first make a list of unselfish contributions they made to the gaming industry.
If none, screw them.
For now it is Steam, GOG, humblebundle or itch.io that I will be supporting. In that order though, I am lazy.

"This doesn't cost anything."

They really should open their 0% cut store, then.

I think Wester is being a bit hypocritical here, as Paradox Development Studio, under his watch, greatly leveraged the SteamWorks services to grow to where they are now. They've relied on it for multiplayer, distribution, patching, internal playtesting, and the mod workshop. I love Paradox, but it's a bit disingenuous to not acknowledge the symbiotic relationship they have had with Valve for many years before they now are getting big enough to grow their own infrastructure...

Interesting statement by a publisher that favours an addiction based price model on top of making the customer the ware by gathering telemetry...
What is the average publisher's cut, btw while we are talking money?


Last edited by Schattenspiegel on 2 Jul 2019 at 11:25 am UTC

I remember talks about on YouTube valve taking a lost on transaction cost in other countries so player not paying that bill. I do think 30% thats abit to high, but 12% is way to low to keep a store going with out cutting cost.


Last edited by Lomkey on 2 Jul 2019 at 11:27 am UTC