Epic Games's new digital gaming market, announced earlier this week and surprise launched under the game prize last night, has…
Epic Games’s new digital gaming market, announced earlier this week and surprise launched under the game prize last night, has caused many eyebrows in the industry. With its favorable 88/12 percent revenue breakdown and Epic CEO Tim Sweeney’s commitment to better support creators, many in the industry wonder if this will be the game store that can really compete with Valves Steam, which has been the dominant platform for PC spreading for just over one decade.
We will not know how successful the store will be for a long time. Last night, Epic announced the first game of game that will support its store, and that list is still small compared to the titus titles found at Valve’s store hall. And although Epic has the advantage of positioning its store within Epic Launcher, which is the software required to update and start playing its mega-hit Fortnite there is still a distinct possibility that consumers will not want to fragment their game libraries longer. In this scenario, Steam is dominant, and the Epics store is just another less popular option, such as GOG or Green Man Gaming, while smaller stores like Itch.io and Humble Bundle are focusing on the indie games market.
But the question of why Valve needs a competitor is still a key to exploring. This is because the current state of distribution of games talks about the volumes of the imminent platform war that has brewed for several years. How it turns out can change how millions of people buy and play games in the future, and how developers in turn earn money from that sale.
As it is said, if a developer makes a game for PC, there is a chance that they will sell it on Steam. If they do not sell a game on Steam, it’s probably for one of two reasons: they are a major publisher like EA or Ubisoft, who runs their own digital store; or they are a game console manufacturer or a studio owned or paid by a game console manufacturer like Microsoft or Sony. In rare cases, a developer takes the loss of not selling a game on Steam because there are some major companies paying the bills and it can be a strategic business, such as console or exclusive store, for a company like Microsoft to say, not selling PC port of Gears of War 4 via Steam, but on Microsoft Store instead.
It’s the old ways to do business in the gaming industry, and Valve has harvested the benefits for years. The company is estimated to have made $ 4.3 billion in Steam revenue last year, not including its standard 30 percent cut on the purchase of content and expansion in the game. During the current event, Valve could never develop another video game and continue to be one of the highest earned companies in the industry, simply by being an intermediary between PC consumers and game developers and publishers. Not only does it take 30 percent of almost every sale on Steam, it also earns revenue from classics like Counter-Strike Half Life and Team Fortress Team Fortress ] while Its e-sport juggernaut Dota 2 remains one of the most popular games on the planet.
In other words, Steam has been sitting a few years ago Apple on the PC gaming market, runs an app store and decides how much money it takes from each sale. The only problem is that, unlike Apple, the valve has no control over the hardware, and in turn, no control over which software they use. Valve can not stop a user from downloading another game store and buying their games elsewhere just as it can not stop Epic or Ubisoft from creating their own game burner and requires players to download the software to start Fortnite or Assassin’s Creed on PC.
Until now there has been no problem for the valve. Players, and PC players in particular, tend to insult what are seen as transparent crash tags at the expense of the consumer. It has been doing business and launches from EA and Ubisoft – famous for locking down games with restrictions on digital rights management – to the company’s broken guys in the industry. Valve, with its loose limits and its generous repayment policy, has always seemed to be the most consumer-friendly option.
It has begun to change, and Epic happens to arrive at the perfect moment to shake things up. Just as it did Fortnite at the perfect time to take advantage of the battle’s overall trend, Epic now applies a push to Steam at a crucial moment for game distribution. Because of the billions of dollars earned by Fortnite Epic now has enough in its war broke to properly fight Valve, and it does so by offering more development-friendly revenue gaps and managing its unrealistic engine toolbox as a strategic arms. If you use Unreal to make your game, Epic will now bring you back the 5 percent that is usually required for all game sales, except that you get 88 percent of all sales through the Epic store.
The newspaper could not be worse for Valve, and Steam has begun to lose its shine as the consumer-friendly, non-incorrect marketplace. For years, the company has taken a hands-off strategy to moderate its business front and how its users behave on its platform. It has resulted in high profile controversies around games such as Hatred a massacre simulator pulled from the company’s Greenlight program just for resumption and unequal tactics from users like hateful and tricky Steam Curator pages, gaming community boards, and mass assessment bombing of indie games is considered too progressive by all-right societies. Valve’s philosophy around Steam was strengthened in the summer after the rare draw of a game centered on shooting, with a new policy that allows “everything” on Steam, unless it is illegal or intentionally designed to eradicate people.
The result has been more developers who are keen to sell their games elsewhere, and more consumers interested in alternatives to Steam, as the deal has been exceeded with subpar and loosely moderated community boards. At the same time, Valve’s practically non-existent cure strategy is more difficult than ever to find games you may want, while developers have long been concerned about problems with Steam’s recommendation algorithm and function features that directly affect traffic to game listings.
This has created an opportunity not only for Epic, but other companies that see Steam’s weaknesses that pain points to exploiting. The Discord discord platform now operates its own game store because it already owns the social infrastructure around how PC players are interacting with friends and chatting via voice and text. To sell games to the same consumers and give them a goal to start them and play them with friends can make Discord a more appealing storefront.
The valve clearly feels the heat. It has begun to copy Discord’s social features, and announced in September that it would begin to moderate community boards. Last year, it said that it would try to fix review bombing through temporary freezing reviews. But most importantly, before Epic’s store launch, Valve said last week that it would change its terms for revenue developers for game developers. Thus, if you sold more than 10 million copies, you could retain another 5 percent of your revenue (from 70 to 75 percent) and then another 5 percent if you have sold at least 50 million copies. It was a clear pickup from Valve that it knows that the platform is not untouchable, and that it improves the financial incentives to sell a game on Steam may be the only way to keep developers from flocking elsewhere.
It may not be enough. As pointed out by game developer Rami Ismail, who participated in the Vlambeer Indiestudio, Valve’s new policy is aimed at addressing major budget developers. “Has it really been so bad for Valve in the increasingly competitive store scene that they now have to subsidize large studios?” He wrote on Twitter last Friday. “Is it so undesirable for big titles now that the big titles tend to start their own store?”
“Steams new 25 percent and 20 percent tiers represent a major improvement for the top 1 percent of games and makes Steam a much better deal for the best games than Google Play and the iOS App Store, Sweeney said in an interview with The Verge this week, clarifying that Steam’s new terms do not benefit all creators – just the biggest.
Finally, how will it play for consumers? It’s an open question, but competition usually leads to lower prices. If game developers get a bigger drop in sales from Epic’s store, they are able to lower the top prize of the game by $ 5 or to and with $ 10. Such an advantage can pull consumers away from steam or at least reduce the financial burden of some developers and give them the freedom to create another game or create an expansion. No matter the epic plane ttar – not only with revenue sharing but also waiver of unreal royalties – developers will earn more money. It may be all the incentive they need to be part of Epic in the future.