With a better revenue split and a focus on communication, Epic’s new storefront makes a compelling offer to developers\u2014and where developers go, players will have to follow.<\/b>
\nWe\u2019ve seen plenty of Steam competitors over the years, but this is the first one I\u2019d call a true threat to Valve\u2019s dominance. I\u2019m going to take a bit to recap the story as it stands, but if you want to know how this affects you feel free to skip ahead to \u201cPart 2\u201d where we lay out what this means for the future.
Which is to say: Revenue share has been a touchy topic with Steam for a while now. For years Valve\u2019s taken a flat 30 percent cut of all revenue earned on its platform, leaving developers with 70 percent.
This made sense (of a sort) in the old days. It was a better cut than developers generally earned from physical retail, and Valve also worked to curate Steam, to make sure only the \u201cbest\u201d games made it onto the store. Between that, server costs, customer support, and so on? 30 percent seemed justifiable.
But then Valve stopped curating Steam. Steam in 2018 is a lawless deluge of garbage mixed in with a few fantastic games, and trying to distinguish between the two is like using a tennis racket to separate salt from the ocean. Discovering new and interesting games on Steam these days, especially indies, is nearly impossible, and the question arose: What exactly is Valve doing to earn that 30 percent revenue cut?
But there might be somewhere for them to go soon.
The deal gets sweeter. If you\u2019re using Epic\u2019s Unreal Engine, the accompanying 5 percent license fee gets bundled in that 12 percent for any purchases on Epic\u2019s store. That means on Steam you\u2019d be giving away 35 percent of your revenue\u201430 percent to Valve, 5 percent to Epic\u2014but on the Epic Games Store you\u2019d still only lose…12 percent.
Let\u2019s take a look at the publishers behind those games: Square Enix, THQ Nordic, EA, Microsoft, Activision, and (as of last month) Microsoft again. If they can earn 88 percent of revenue on Epic\u2019s platform? And their Unreal licensing fees are bundled into that amount, further sweetening the deal? Suddenly Steam\u2019s peace offering of 20-percent-once-you\u2019ve-crossed-a-certain-sales-threshold looks even more paltry.
Other publishers have tried to divorce Steam, most of them unsuccessful.
Which is not to say that Epic\u2019s going to win this war. It\u2019s an attractive-sounding offer on paper, but we haven\u2019t seen the store yet. Just last week I wrote about Bethesda.net and all the various ways it sandbagged the Fallout 76 launch, and recapped the mistakes other Steam competitors have made in the past. Historically, Steam\u2019s competitors are their own worst enemy.
It could also mean cheaper games for you\u2014or, more likely, stave off an increase in game prices. Development costs have skyrocketed this generation, and we\u2019ve seen the results in expanded microtransactions, loot boxes, and other games-as-a-service \u201cfeatures.\u201d There\u2019s also been a commensurate call for the death of the $60 game price, with $70 or even $80 being cited as a new standard.
There will be growing pains, of course. I have over 2,000 games in my Steam library. More than most, I understand the investment some PC gamers have made in Valve\u2019s platform, and why they might be reluctant to switch. I\u2019ve seen plenty of Steam \u201ccompetitors\u201d arise over the years, and I\u2019ve watched them fall, unable to convince players to break from their past investments.
But Epic doesn\u2019t need to convince players, per se. It only needs to convince developers. EA\u2019s storefront succeeded because it gave no alternative. You either play EA\u2019s games on Origin or you don\u2019t play them at all.
It\u2019s not a given. Epic has a lot of work to do to make this future viable. But for once, it feels like Valve has some real competition\u2014and that\u2019s always a good thing for consumers.<\/p>\n