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this post was submitted on 07 Nov 2023
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Games
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This part always confuses me. When Steam started allowing non-Valve games on their storefront, 30% was considered a bargain compared to selling your games at retail. In fact, PC versions of games were often $10 cheaper than their console counterparts specifically because distribution and platform fees were lower. It wasn't until MW2 came out that PC prices started reflecting console prices.
It’s confusing to you that manufacturing, shipping, and selling physical copies of a game was more expensive than digital distribution? The world is very different today. Digital distribution is the norm and everybody knows you don’t need 30% to make it sustainable.
That is not what is confusing to me.
I'm not sure I buy this. Epic's 12% is the bare minimum just to cover basic infrastructure costs for distributing modern AAA games. It doesn't even include transaction fees, which vary based on which payment method the user selects (whereas Steam and other storefronts eat these as part of their 30% cut).
Simply sustaining your existing platform is also not enough. Where Epic runs a barebones storefront and client with little in the way of useful features beyond "download game and keep it updated", storefronts like GOG and Steam take their actual profit and re-invest it in improving their platform for everyone. Think of all the time and money that goes into making things like Steam Input, Proton, or even GOG themselves fixing up older games for modern PCs.
The fact that it has been 5 years and Epic still hasn't been able to make their 12% cut break even speaks volumes.
Epic’s 12% doesn’t do much because they’re constantly burning money trying to find more revenue. It’s obvious they’re not doing anything efficiently. They also have far fewer sales than Steam which further hurts their bottom line.
The standard internet payment processors take 3% as their cut.
With modern cloud systems we can quickly distribute files globally for tiny amounts of money.
The truth is that Valve makes a ton of money off of this fee. It’s great that they contribute to open source projects but plenty of companies make similar contributions with a fraction of the resources.