Epic Games CEO promises a 'retreat from exclusives' if Steam lowers its revenue share...

[Polycount]

Epic Games and Steam have been facing off for months now, and things have gotten pretty cutthroat. Epic has convinced multiple developers to yank their upcoming (sometimes highly-anticipated) games from Steam in favor of timed Epic Games Store exclusivity, and the company doesn't appear to be stopping that trend anytime soon.

Now, in an attempt to cast Epic as the benevolent side in this platform war, the company's CEO -- Tim Sweeney -- has published a tweet promising a "retreat from exclusives" if Steam drops its 30 percent revenue cut to match Epic's 12 percent "without major strings attached."

Sweeney says such a move, if it occurred, would be a "glorious moment" in the history of PC gaming, adding that the effects would likely radiate to other digital distribution platforms, such as Ubisoft's Uplay, EA's Origin, or even CD Projekt Red's Good Old Games.

If you're wondering why Sweeney would make such a decision, you're probably not alone. For better or worse, Epic Games Store exclusives appear to be working. Users who desperately want to purchase some of the hottest upcoming games, such as Borderlands 3 or Obsidian's upcoming sci-fi RPG The Outer Worlds, will have no choice but to use Epic's platform.

If Steam committed to a permanent 88% revenue share for all developers and publishers without major strings attached, Epic would hastily organize a retreat from exclusives (while honoring our partner commitments) and consider putting our own games on Steam.

— Tim Sweeney (@TimSweeneyEpic) April 25, 2019

As such, the store's user numbers have likely grown quite a bit already, and will probably continue to do so in the coming months. In short, Epic has no real incentive to stop pushing for exclusives. So, again, why would Sweeney make this promise?

It's tough to say for sure, but we can speculate. To start with, let's dig a little deeper into the CEO's words. While he presents Epic backing off from exclusives as a purely altruistic move (which focuses on selfless industry change), it's more likely that Steam dropping its revenue split to 12 percent would simply take the wind out of Epic's sails.

Without a more developer-friendly revenue split than its main competitor, Epic would lose significant leverage during its exclusivity talks with publishers and developers. After all, it can't continue to hand out exclusivity lump sums to publishers in perpetuity - the success of Fortnite has its limits. At the end of the day, the company will need to have a strong long-term reason for developers to take its side.

At any rate, only time will tell how things will shake out here. With Epic consistently chipping away at Valve's market share, the latter will have to respond eventually, but it's tough to say when that'll happen and what form it will take.

Permalink to story.

https://www.techspot.com/news/79811-epic-games-ceo-tim-sweeney-promises-retreat-exclusives.html

 

[NahNood]

"Users who desperately want to purchase some of the hottest upcoming games ... will have no choice but to use Epic's platform."

Nah. Not that desperate for a game. Can wait forever, really. lol

 

[amstech]

Not 11%. Not 13%.
12%.
Man, would I have loved to be in that meeting.

 

[Nero7]

Lies and best of all he draws attention once again on that false narrative of Steam charging too much.

If the Epic store would have even just half as many features as Steam, it would charge over 50%.

Doesn't even have ingame achievements but hey in some months it may have a shopping cart lol.

 

[Kibaruk]

The biggest question is, will Epic be able to maintain this model? Of course it's an aggressive one, they just opened shop and want all the cool kids playing there (No pun intended) but, will they be able to maintain this without a hike in the long term?

 

[psycros]

Valve will never reduce their cut to 12% but they might be forced to increase the share given to developers who distribute via their platform. Even a 25/75 split would be a huge improvement. If Steam actually gave developers a fair chunk of the revenue Epic could afford to put their games back on Steam while keeping their own store going just to keep Valve honest. Sweeny and company would still come out ahead because they'd be getting a far better deal on the biggest gaming service. The fact that all devs would benefit just makes Epic look even more heroic.

 

[Polycount]

The biggest question is, will Epic be able to maintain this model? Of course it's an aggressive one, they just opened shop and want all the cool kids playing there (No pun intended) but, will they be able to maintain this without a hike in the long term?

I think the 12 percent cut isn't the tricky part for them (they have a much, much less financially demanding platform than Steam with all its features), but they won't be able to keep shoveling cash into the hands of pubs and devs forever. They will have to stop someday. How quickly Steam adopts Epic's revenue cut (or something similar) will determine how quickly that day arrives.

 

[ShagnWagn]

I am content with the list I have on steam(ing pile), and the many more I haven't bought yet. I don't see installing yet another game client. There are too many already.

What do I want? To not need to rely on an internet client, as in the good 'ol days. I buy a game - it's mine. Forever.

I don't want/need a service to constantly monitor what I do. If steam were to disappear, all of that money we spent goes up in smoke. What if steam starts with some subscription crap like MS does for xbox? For just the privilege to connect to their servers.

Edit: What could get me to move? Import my owned games from steam to Epic.

 

[redhat]

I think a new version of Half Life or remaster/remake edition can stop Fortnite which means Epic in other words

 

[Cycloid Torus]

Makes no sense...'be like us' is probably the only way Epic can compete AND it would reduce the comfortable college library feel at Steam.

 

[Vrmithrax]

Total public relations bullshit bluff. They know Steam can't drop to 12%, there is far too much infrastructure behind all of the features and massive library that Steam hosts (which Epic doesn't have to worry about).

Would be funny to see Steam call their bluff, though, and drop it to 12% even if it was just for a year or 2. If the Epic store actually followed through with their claims and dropped exclusivity, there would likely be a huge drop in revenue for them - most people are only using Epic now because they have no choice for the products they want. Within a year or 2, Epic store would be a ghost town. But, of course, the second Steam dropped their percentage down to 12%, I'm sure any number of excuses and waffling would occur, and this whole magnanimous claim of dropping exclusives would be exposed for the calculated bluff that it is.

Edit (hit Enter too quickly): Technically, though, what Sweeney said would end up true, just not for the reasons he stated. Epic wouldn't want to give up their new storefront cash cow voluntarily, and consider moving over to selling on Steam. But if Steam matched their low developer cut, they might not have much alternative. Still, it's a great setup for martyrdom later if such a thing happened, right?

 

[Vrmithrax]

The biggest question is, will Epic be able to maintain this model? Of course it's an aggressive one, they just opened shop and want all the cool kids playing there (No pun intended) but, will they be able to maintain this without a hike in the long term?

If they grow fast, they'll have the exact same issues that Steam had early on, with hosting issues, download issues during "launch day" windows, network outages, etc. - the sheer volume of simultaneous users will start to cripple their infrastructure. And, with their low percentage cut, it's not like they'll have an abundance of cash to be rapidly expanding on the hardware/network/hosting side of the equation, a critical component for long term stability. Which is exactly what Steam did with most of their revenue cut continuously during the formative years, and then put that revenue towards expansion, new features, enhanced functionality for players and gaming communities.

Surviving by the skin of your teeth through bargain basement pricing and back alley exclusivity deals is one thing. Growing and flourishing in a competitive industry when you are essentially giving away most of your potential revenue is an entirely different matter. You can bet they'll go the way of cable TV, Netflix, and so many others, and start to creep their cut upwards just to stay afloat. Or bump it up substantially to actually expand and secure more solid footing for the future.

 

[m4a4]

Sounds like a bluff. Any intelligent person who compares the Steam platform to Epic's will pick Steam's every time (in Epic's current state).

Epic's isn't ready for head on competition (and this exclusivity deal BS shows they know that full well).

 

[Polycount]

Edit (hit Enter too quickly): Technically, though, what Sweeney said would end up true, just not for the reasons he stated. Epic wouldn't want to give up their new storefront cash cow voluntarily, and consider moving over to selling on Steam. But if Steam matched their low developer cut, they might not have much alternative. Still, it's a great setup for martyrdom later if such a thing happened, right?

Yep - this is precisely what I tried to point out in the latter half of the article. Sweeney wouldn't be *lying*, because Epic would eventually have to drop exclusives, but it CERTAINLY wouldn't be for the benevolent, altruistic reasons he lays out here. It'll be because they have no choice.

 

[brucek]

If Epic is willing to live with a 12% cut vs. the til-now standard of cut of 30%, it already has all the tools it needs to put up a great fight for consumer choice: a big price break. It could be selling new games at $50 instead of $60, which would finally give consumers a real choice: the features of steam vs. the price of Epic.

But even now, at its most critical time, when it is trying to gain traction as a new player, it is not willing to share a single cent with consumers. This tells us all we need to know about Epic's long term plans.

Epic is screwing me over now by spending its own money to reduce my choices. I see what they are doing, and I remember. I am not spending money on their store and I do not ever intend to.

 

[techdaz]

* Microsoft should adopt Valve, and purchase them and gain Market share in the gaming market. IMO

 

[Araeven]

Always funny to hear the 12% developer cut when it's actually benefiting the publishers the most not the developers. Maybe they get a small portion but not the lions share. Epic can't maintain 12% indefinitely either.

 

[amghwk]

Though I am getting tired of using another platform, I feel Epic's policy of 12% cut is a much more comfortable, competitive and rewarding for developers.

The only reason there's no Exodus of developers to Epic yet, is the user base in Steam, and subsequently the loss of the populated market-space. But when more and more developers choose a more viable 12% cut platform for selling their games, the scene will change.

To pull more developers and later attract more user-base to Epic, it will soon have to have games sold at a constant lower price than on Steam.

As for us, for now, the price may be the same across all platforms, maybe cheaper or more sales on Epic later, and it may not be much different from where we got them.

New gen kids are just getting too comfortable with Steam, since it does everything for them after they point out where to install.

Those who whine and review bombing seem to be those who have been emotionally attached to Steam and have become dependent on it.

For me, as long as it's on 75% and above sale, I would get it from anywhere.

 

[Draconian]

12% is kind of low for Steam.

15-20% seems fair.

 

[Axiarus]

12% is kind of low for Steam.

15-20% seems fair.

Their current cut is fair. Why do people not understand that Steam offers a crap ton of features, that is why it is so expensive. Exposure on PC's biggest platform, streamlined update servers, game servers and more. Do people think it is just as cheap to advertise on a Tuesday at 3AM as it is during the Superbowl?

 

[144hzGamer]

12% is kind of low for Steam.

15-20% seems fair.

Their current cut is fair. Why do people not understand that Steam offers a crap ton of features, that is why it is so expensive. Exposure on PC's biggest platform, streamlined update servers, game servers and more. Do people think it is just as cheap to advertise on a Tuesday at 3AM as it is during the Superbowl?

Steam is stale for years now, next argument please.

I always hated steam and cant wait to see them going down.

 

[Axiarus]

Steam is stale for years now, next argument please.

I always hated steam and cant wait to see them going down.

It doesn't matter if you hate them or not. Valve is stale, yes. Steam, as a platform, is quite decent. Either way, it is the biggest PC platform and trying to blow off my argument because you say it's stale is just ignorant.

 

[FPSChris]

Steam is stale for years now, next argument please.

I always hated steam and cant wait to see them going down.

It doesn't matter if you hate them or not. Valve is stale, yes. Steam, as a platform, is quite decent. Either way, it is the biggest PC platform and trying to blow off my argument because you say it's stale is just ignorant.

He probably uses origin which is packed full of exciting features such as pop ups, a bad store, no way to change to GBP if it thinks your in a EUR country and worst of all... EA games

 

[stewi0001]

Well since everyone has the topic covered well enough, I will make a reference to the article's headline image. "He ain't pretty no more!"

 

[Lounds]

* Microsoft should adopt Valve, and purchase them and gain Market share in the gaming market. IMO

Valve isn't even a PLC, so no shares to buy. It's fully private. If Valve went PLC it would be worth 3x EPIC's value easy.