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PayPalDuring Gamelab 2019 at a panel hosted by GamesIndustry.biz, Paradox Interactive's former CEO Fredrik Wester (now the Executive Chairman of the Board at Paradox Interactive) talked about the cut "platform holders" take from sales and they're not impressed.
The one this always comes back to is Valve's store Steam, which has a standard 30% cut they take from developers. Although, they did tweak this for higher earning games in December last year so for games that earn $10 million it's reduced to 25% and 20% at $50 million and that does include money from DLC, in-game transactions, Steam market fees and so on.
Wester said "I think the 70/30 revenue split is outrageous", noting that it was likely established in the '70s by Warner Bros when distributing physical media like boxed VHS tapes and so on saying "That was physical. It cost a lot of money". Wester went on to say "This doesn't cost anything." and thanked Epic Games for what they're doing with their much smaller 12% cut.
Claiming it "doesn't cost anything" isn't quite right though, considering all the services Steam actually provides including things like Cloud Saving, Achievements, Leaderboards, Valve Anti-Cheat (VAC), Inventory Services and quite a bit more. Valve also provide free keys to developers to sell on other stores like itch.io, Humble Store, Fanatical and many others (there's a huge amount of Steam key stores out there) of which Valve don't see a penny from. That's on top of various open source projects Valve fund too like DXVK, improving KWin and a ton more those are just two very recent examples.
Wester isn't the only one who has mentioned this of course, former Valve staffer Richard Geldreich said on Twitter back in April:
Steam was killing PC gaming. It was a 30% tax on an entire industry. It was unsustainable. You have no idea how profitable Steam was for Valve. It was a virtual printing press. It distorted the entire company. Epic is fixing this for all gamers.
The State of the Industry Survey done by GDC also noted how only 6% of developers asked thought Valve's 30% cut was justified.
What are your thoughts?
Hat tip to Mr. Doomguy in Discord.
Article taken from GamingOnLinux.com.
Steam is probably the most featured-rich store application in the market, so it's quite obvious why it has most the PC market share. To say that the 30% is outrageous they should take in the equation how much would cost to them the marketing campaign in order to reach a similar market share without using their platform.
By the way, many mentioned the taxes but bare in mind that many times those taxes aren't in the price (out of the income tax, of course), so it's a number that is payed by the buyer and not by the seller. For example, in my country we have a VAT of 21% but it is the credit card of my country the entity that takes care of retain and pay the taxes (that in the end I pay as an extra fee in my credit card bill).
Last edited by x_wing on 2 July 2019 at 1:01 pm UTC
Nevertheless Jul 2, 2019
But when a publisher accuses a shop of greed, opportunism is certainly at play.
If a profit oriented shop accuses another of greed, it's an underbidding competition, and it's also hypocritical in this case, because Epic, unlike Valve, also markets player data.
Quoting: GuestBut -for what it's worth- i recall posts i had read from BOOK publishers who explained why their ebooks were actually not cheaper than the paper ones. It was because the infrastructure to distribute them was more expensive. Networks of computer did cost them more than printing presses, paper and shipping. The computer people paid to maintain such infrastructure was more expensive than librarians.That's true, if you use DRM. They have to pay DRM license, hosting at adobe and whatever kind of crap they pull to keep it locked down. It's false if your books are DRM free.
So I always buy DRM free. And they are indeed cheaper than physical books.
So it's reasonable what they are doing. I just question how sincere they are. Epic seems like a snake in grass trying to attack a wolf which is fishing for fish. I mean clearly Valve's fur isn't all white, but they certainly are good for PC gaming.
Last edited by Linuxwarper on 2 July 2019 at 1:17 pm UTC
gradyvuckovic Jul 2, 2019
Quoting: kuhpunktQuoteAlthough, they did tweak this for higher earning games in December last year so for games that earn $10 million it's reduced to 25% and 20% at $50 million.
That's per publisher/developer, not per game.
For real?!
Holy crap I've been quoting that wrong then, I thought that was per game?!
If that's per publisher, then practically all of the major publishers are already at 20%?! What on earth is Paradox even complaining about?
Quoting: gradyvuckovicWrong. It is per-game, not per developer.Quoting: kuhpunktQuoteAlthough, they did tweak this for higher earning games in December last year so for games that earn $10 million it's reduced to 25% and 20% at $50 million.
That's per publisher/developer, not per game.
For real?!
Holy crap I've been quoting that wrong then, I thought that was per game?!
If that's per publisher, then practically all of the major publishers are already at 20%?! What on earth is Paradox even complaining about?
From Valve's post on it:
QuoteStarting from October 1, 2018 (i.e. revenues prior to that date are not included), when a game makes over $10 million on Steam*emphasis mine
Sarcasm aside, I used to believe that someone could actually do better than Valve and challenge them if they tried. But when an intelligent and competent man with an endless amount of money like Tim Sweeney says that it's impossible to do better and the only way for he and his big publishers buddies to get higher margins is to remove all steam features, all steam services while keeping the consumer prices unaltered (or even increased a little because, why not? Monopoly FTW)... well I believe him. I'm now genuinely convinced that 30% is the best price possible for that kind of service.
Last edited by Mal on 4 July 2019 at 4:00 pm UTC
Quoting: liamdaweFrom Valve's post on it:
QuoteStarting from October 1, 2018 (i.e. revenues prior to that date are not included), when a game makes over $10 million on Steam*emphasis mine
Not unimportant here: ... including DLCs.
gradyvuckovic Jul 2, 2019
Quoting: liamdaweQuoting: gradyvuckovicWrong. It is per-game, not per developer.Quoting: kuhpunktQuoteAlthough, they did tweak this for higher earning games in December last year so for games that earn $10 million it's reduced to 25% and 20% at $50 million.
That's per publisher/developer, not per game.
For real?!
Holy crap I've been quoting that wrong then, I thought that was per game?!
If that's per publisher, then practically all of the major publishers are already at 20%?! What on earth is Paradox even complaining about?
From Valve's post on it:
QuoteStarting from October 1, 2018 (i.e. revenues prior to that date are not included), when a game makes over $10 million on Steam*emphasis mine
Ahh thankyou, I was questioning myself there, whew.
Quoting: EikeIndeed it does, I've added that to the article to be clearer :)Quoting: liamdaweFrom Valve's post on it:
QuoteStarting from October 1, 2018 (i.e. revenues prior to that date are not included), when a game makes over $10 million on Steam*emphasis mine
Not unimportant here: ... including DLCs.
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