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Valve changes Steam's revenue-sharing model to benefit large publishers – Critical Hit

During the next 15 years since Steam has existed (which means yes, Half-Life 2 released almost 15 years ago), the…

 Valve

During the next 15 years since Steam has existed (which means yes, Half-Life 2 released almost 15 years ago), the platform has taken 30% of the sales on the platform. For a long time, it has been enough for most developers and publishers. It’s a huge part of the win, but it’s one that has been worth it just because of being listed on Steam.

Valve now makes the biggest change in the revenue sharing model since the service began. Instead of the straight 30% cut, there is now a tiered structure in place. The first $ 1

0 million sales still generate Valve 30%, but when sales range from $ 10 million to $ 50 million, the cut is 25 percent. And for every sale in addition to the first $ 50 million, Steam’s cut drops to 20 percent. Tally includes DLC, so you can reasonably expect the larger publishers to drive even more of it because they are incited to do it.

“The value of a large network like Steam has many benefits that contribute to and shared by all participants. Finding the right balance to reflect these contributions is a tricky but important factor in a well-functioning network,” Valve said in a statement on Steam Community Page. “It has always been evident that successful games and their big audience have a significant impact on network effects so that Steam recognizes and continues to be an attractive platform for these games is an important goal for all participants in the network.”

Of course, this new revenue sharing system benefits the bigger players, as it is unlikely that Indians and other smaller developers will reach the threshold for a lower revenue sharing.

If any, it’s likely Valve’s response to the larger publishers like Bethesda, EA , Activision, Ubisoft and Epic have their own launchers and distribution platforms that are not subject to such high avg ifter. Epic taking the decision to launch Fortnite on Android outside of Google Play Store was probably a crucial factor.

Of course, many indie developers do not know that this new system is fair because it does not benefit them at all. While they are right, capitalism is rarely fair.

Last updated: December 3, 2018

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