The Fortnite-and-Unreal-Engine developer today announced the Epic Games Store, a Steam competitor that will distribute digital games across companies and platforms and engines, complete with a reward structure for video and stream influencers. The key bit, however, is that it will offer a 88%/12% split – that is, Epic will keep only 12% of the proceeds from the games it vends, reserving the other 88% for the studios actually making the games.
That offer stands in sharp contrast to Valve’s newly announced plans for Steam, which still claim 30% of the game’s profits (plus 5% engine fees) on the platform unless the games pull in millions upon millions of dollars – and even then Valve’s plan isn’t as sweet.
Here’s Epic’s Tim Sweeney explaining the numbers game to GIbiz:
“While running Fortnite we learned a lot about the cost of running a digital store on PC. The math is quite simple: we pay around 2.5% for payment processing for major payment methods, less than 1.5% for CDN costs (assuming all games are updated as often as Fortnite), and between 1% and 2% for variable operating and customer support costs. Fixed costs of developing and supporting the platform become negligible at a large scale. In our analysis, stores charging 30% are marking up their costs by 300% to 400%. But with developers receiving 88% of revenue and Epic receiving 12%, this store will be a profitable business for us.”
While Sweeney told GamesBeat Epic is “not looking to crush Steam any time soon,” just “building a store with a fair deal for developers that creates new opportunities for content creators,” it nevertheless looks like the gauntlet has been thrown. And so much in the plan sounds dreamy not just for developers but for gamers too: Sweeney says the platform will avoid forums, manually approve games, offer a two-week refund policy, and be mindful of review-weaponization.
Will Steam’s momentum and existing customer base keep it on top for years to come, no matter how compelling Epic’s? That’s a fair short-term question. But Epic appears to be playing for the long-term – and a new generation of gamers that aren’t quite as financially and socially invested in the Steam ecosystem. I’m sure you remember when everyone said Google had no chance of disrupting the Apple market too, and now look where we are.
It's getting real. 70/30 isn't long for this world. https://t.co/RYdTvFd3u7
— Jeffrey Grubb (@JeffGrubb) December 4, 2018
the big thing i'm honing in on is their talk of "no forums and we're going to pay attention to how reviews are weaponized"
even with the "14 days no questions asked" refund policy next to it, that's some shit a lot of smaller devs have been begging for
— Colin Spacetwinks (@spacetwinks) December 4, 2018
absolutely correct. 30% is just unsustainable over time. https://t.co/PTQ8pJsPhB
— John Smedley (@j_smedley) December 4, 2018