During 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.
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To the developers who complain about the 30% cut that Valve receives, I would ask, "What percentage do you deem fair?" How much do you think it costs to provide all of the services that Valve offers? Do you put any value in Valve's hardware endeavors?
Further, if the estimation of the cost of all of Steam's features is low, then I wonder why no one else has matched them with their own platform. In particular, Epic still pales in comparison. It's been a year now, or nearly so?
We all see what they're doing. I wouldn't be surprised if Paradox moves to Epic, after having become successful on the backs of Valve. And I will welcome the convenience of not accidentally purchasing anything from a developer who thinks me a fool, and thinks Steam of little value.
Further, if the estimation of the cost of all of Steam's features is low, then I wonder why no one else has matched them with their own platform. In particular, Epic still pales in comparison. It's been a year now, or nearly so?
We all see what they're doing. I wouldn't be surprised if Paradox moves to Epic, after having become successful on the backs of Valve. And I will welcome the convenience of not accidentally purchasing anything from a developer who thinks me a fool, and thinks Steam of little value.
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Quoting: MaathTo the developers who complain about the 30% cut that Valve receives, I would ask, "What percentage do you deem fair?" How much do you think it costs to provide all of the services that Valve offers? Do you put any value in Valve's hardware endeavors?
They don't know either.
Nobody but Valve really knows.
Quoting: MaathFurther, if the estimation of the cost of all of Steam's features is low, then I wonder why no one else has matched them with their own platform. In particular, Epic still pales in comparison. It's been a year now, or nearly so?
To play devil's advocate:
Because it's a defacto monopoly, which is hard to break.
A while ago, somobody linked a lengthy article depicting just how hard it would be to break it.
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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
That's what I thought as well, but I listened to a podcast (The Pod, one of Germany's biggest gaming podcasts) where they talked about Epic vs. Steam and they explained that. They talked to several developers who told them that this is wrong and that it's just per developer/publisher and not per game. Valve didn't communicate this properly.
I tried to confirm this by asking on the Steam reddit and people like Jim Sterling and Tyler McVicker, but I didn't get a single response.
If you could ask more developers with your connections, that might help.
1 Likes, Who?
Quoting: gradyvuckovicQuoting: 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.
I'd wait for confirmation either way.
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Open steam > Click: Publisher link > Click: Option (Gear Icon) > Click: Ignore this creator
Because, you know my peasant money ain't worth it.
p/s: GoL users, I will not arguing "the cuts" with all of you guys because already disproven by almost everyone inside and outside of community.
Because, you know my peasant money ain't worth it.
p/s: GoL users, I will not arguing "the cuts" with all of you guys because already disproven by almost everyone inside and outside of community.
2 Likes, Who?
Quoting: tonROpen steam > Click: Publisher link > Click: Option (Gear Icon) > Click: Ignore this creatorI wouldn't go this far personally but indeed if they wanted more cash from me (was about to buy some few stellaris DLCs and some Battletech goodness) well they're gonna have to wait for that ...
Because, you know my peasant money ain't worth it.
Like I said I'm a fan of what they are doing and always was annoyed by people complaining about the "paradox prices" (and I still am annoyed sorry not sorry but it's always worth every penny and then some ) buuuuuuut this here is utter horsehit on their part and they should know fucking better already .
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Edited for clarity. - Nami
Don't blame former employees for being dicks. If this guy heads up a new company and reiterates what he said in the past, then yeah, ignore that developer/publisher.
Last edited by namiko on 2 July 2019 at 5:56 pm UTC
Quoting: tonROpen steam > Click: Publisher link > Click: Option (Gear Icon) > Click: Ignore this creatorDon't act so quickly. This is Paradox Interactive's former CEO, not their current one.
Don't blame former employees for being dicks. If this guy heads up a new company and reiterates what he said in the past, then yeah, ignore that developer/publisher.
Last edited by namiko on 2 July 2019 at 5:56 pm UTC
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Quoting: GuestQuoting: F.UltraQuoting: TuxeeQuoteWhat are your thoughts?
That Wester is either an idiot or a hypocrite. I'd go for the latter.
I would more say that he is speaking from the viewpoint of his own company, it's of course in Paradox best interest to keep their own prices as high as possible while having to pay as little as possible to others like Valve. That is hardly being a hypocrite.
It's the very definition of being a hypocrite. He's basically saying "do as I say, not as I do".
Not really, their per DLC price is not correlated to how much Paradox feels that a distribution channel is worth when it comes to a cut of the sales.
If not then anyone here is probably a hypocrite as well. Who here does not want to be paid more in salary while wanting to pay less for things like media, games, food and rent?
Last edited by F.Ultra on 2 July 2019 at 6:23 pm UTC
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orochi_kyo Jul 2, 2019
What is a CEO?
They are these greedy guys which job is to cut cost at spending to secure more revenue, to do this, shareholders are offering big cuts from the revenue or some big boost to their salary. Then CEOs becomes those bad guys who order products to be lower quality, take jobs to China or Mexico in order to pay less and fire people making dozens to thousands to lose their jobs. Im glad this 4ssh0l3 is not paradox CEO anymore.
What a CEO want from PC gaming? Going back to those days where local currencies, workshop, local servers and reviews were a mere dream, they hate Valve just gave too much control to the user, they want a barebone store where they have full control of what people is saying of their product. Im not surprised of devs thinking this way, devs hates their own customers, they just see us as open wallets, as some of your claimed Paradox is really known for having overpriced DLCs on their games, they just dont give a damn about you.
Now this idiot claims it cost nothing, still EPIC takes 12% for doing "nothing". Just EGS propaganda based on unchecked facts.
Some first world people around here should burst the first world bubble you live on, Im pretty sure you feel so important you live on Europe, Canada or USA but Steam is a good store for anyone else who live outside of those big walls you put around your country borders, offering currencies and local servers, yeah Steam have a central america servers to offer me steady download and cool online gaming. IM pretty sure most of you doesnt even know where my country is. Enjoy EGS, an elitist store for first world kids.
Last edited by orochi_kyo on 2 July 2019 at 6:44 pm UTC
They are these greedy guys which job is to cut cost at spending to secure more revenue, to do this, shareholders are offering big cuts from the revenue or some big boost to their salary. Then CEOs becomes those bad guys who order products to be lower quality, take jobs to China or Mexico in order to pay less and fire people making dozens to thousands to lose their jobs. Im glad this 4ssh0l3 is not paradox CEO anymore.
What a CEO want from PC gaming? Going back to those days where local currencies, workshop, local servers and reviews were a mere dream, they hate Valve just gave too much control to the user, they want a barebone store where they have full control of what people is saying of their product. Im not surprised of devs thinking this way, devs hates their own customers, they just see us as open wallets, as some of your claimed Paradox is really known for having overpriced DLCs on their games, they just dont give a damn about you.
Now this idiot claims it cost nothing, still EPIC takes 12% for doing "nothing". Just EGS propaganda based on unchecked facts.
Some first world people around here should burst the first world bubble you live on, Im pretty sure you feel so important you live on Europe, Canada or USA but Steam is a good store for anyone else who live outside of those big walls you put around your country borders, offering currencies and local servers, yeah Steam have a central america servers to offer me steady download and cool online gaming. IM pretty sure most of you doesnt even know where my country is. Enjoy EGS, an elitist store for first world kids.
Last edited by orochi_kyo on 2 July 2019 at 6:44 pm UTC
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Quoting: namikoEdited for clarity. - NamiAccording to the article: former CEO and now the Executive Chairman of the Board. Not sure which one has more power between the two, but it sounds like a fairly horizontal change of position to me, if not a higher rank.
Quoting: tonROpen steam > Click: Publisher link > Click: Option (Gear Icon) > Click: Ignore this creatorDon't act so quickly. This is Paradox Interactive's former CEO, not their current one.
Don't blame former employees for being dicks. If this guy heads up a new company and reiterates what he said in the past, then yeah, ignore that developer/publisher.
Quoting: orochi_kyoSome first world people around here should burst the first world bubble you live on, Im pretty sure you feel so important you live on Europe, Canada or USA but Steam is a good store for anyone else who live outside of those big walls you put around your country borders, offering currencies and local servers, yeah Steam have a central america servers to offer me steady download and cool online gaming. IM pretty sure most of you doesnt even know where my country is. Enjoy EGS, an elitist store for first world kids.I'm speechless. It's like you intended to post this to a completely different community. Take it easy, mate.
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