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Tim Sweeney: Not sure why Steam is still taking 30%
- Thread starter Renekton
- Start date
I mean yeah Steam is a store. They need to provide you, as the consumer, with a product and service that surpasses their competitors. There is clearly a cost associated with that but they make their money from that 30%. How many billions do you think their overhead cost is? Because that is what we are talking about.
Probably came up in conversation where someone explained interchange as being similar to Steam, which is incorrect.
No company can outlast valve in a race to the bottom... So why would anyone even try to start a price war.
Also steam isn't 'over charging'. They are charging a rate that the market continues to accept.
I really dont get Tim Sweeny on this (what else is new) Valve has no market pressure what-so-ever to lower their cut. Doing so isn't going to increase their sales volume enough to offset their reduced margins, if at all (most devs would pocket the savings rather than pass them on to customers.) . They'd be leaving money on the table.
He should know exactly why they take 30%
Aztechnology
Member
This is effectively the crux of all business. They aren't evil, they just do what they can get away with. It's a constant tug of war, but when consumers capitulate easily and regulations aren't in place, consumers tend to lose.
TheRedSnifit
Member
How can an individual store be an entire open marketplace in and of itself? I don't think you understand the meaning of the term.
lol
OverdriveOtaku
Member
I found the conversation as a whole interesting, but it's intriguing to see people bring up UE4 marketplace since their take is also 30% but their infrastructure and customer service is lower than Valve's apparently. Tim replies to a few of them.
How are consumers losing in this instance? The savings would not be passed on to consumers but rather go directly into the publishers/developers pockets.
CheesecakeRecipe
Stormy Grey
Smaller developers must pay $100 to put a product on Steam, but they are paid that $100 back after that product reaches a certain sales threshold. The difference is that Valve's $100 charge is per game, while Apple's fee must be paid annually?
Aztechnology
Member
Publishers and developers receiving more funds is technically more advantageous to consumers than the middle man receiving them. But I was referring to business more generally. Tax breaks, monopolistic status/costs etc.
Angelus Errare
Banned
Steam has taken 30% for like ever.
deadscreensky
Member
Maybe Valve needs that cut so they can afford to fight MS's ongoing sabotage of Steam via Windows 10. Constantly, seemingly instantly fixing that can't be cheap!
Aztechnology
Member
Along with most other distributors.
well how else will valve fund their research on to how to count to 3.
I agree with the latter portion of your statement but it is my understanding that most PC gamers adore steam. So clearly there is value there. All things being equal Steam being rewarded for their service makes sense because the same game launched exclusively on a Windows store or another inferior store (at least perceived so) will not even come close to selling as much.
Croatoan
They/Them A-10 Warthog
This is hilarious to me since we sell an asset on the unreal marketplace and epic games takes 30% of our profits. What the fuck is with that Sweeny? I mean visa and MasterCard blah blah blah blah...
Our asset for proof www.unrealengine.com/marketplace/weapon-master-vr
Our asset for proof www.unrealengine.com/marketplace/weapon-master-vr
Interficium
Banned
what a beautiful glass house that is tim
It's not a comparison, it's examining the cost of running Steam.
That said, it seems kind of dumb to single out Steam when 30% is the standard pretty much everywhere. And Steam seem to be very generous with allowing developers to get keys at no cost, for distribution anywhere they choose.
Aztechnology
Member
I love Steam because it's convenient and has nice features. But It's just massively popular, that's really the reality of it. They also attempt to some degree to keep games open. Steam Workshop has been a nice addition for convenience in mods especially and a curation location. I know Steam does more than just provide a place to sell games, but every time someone gets Angry at say EA for not selling games on Steam it does make me laugh. Obviously, if they can provide a platform to launch your games and have friends who you can invite to games etc. That's really the features that matter most.
Comparable to most the industry, they are miles beyond. I just mean generally a distributor taking 30% cut is crazy. But hey, that's the cost of doing business. Valve would probably be willing to extend lower costs to indie devs, but that would create a big problem with AAA studios with more leverage expecting the same deal.
Edit: You know I just realized I'm being contrarian because I expect more out of PC and Valve than your normal companies. And in reality they deliver so much more than anyone else for what is the market standard. I guess I just generally get kind of fed up with the amount of leech that happens from various points along the way which makes it complicated and hard for companies to survive. That being said, if more distributors were like valve it would actually go a long way, and I wouldn't say they are directly responsible for any of the things we're talking about. I also really just don't like brand loyalty zealotry I feel like I see often.
I guess we all have our bad days. For someone so smart to say something so stupid is strange. He should know better about the comparison he made.
Yup. And it's things like this that just continue the ignorance/arrogance that fester in the industry (on both sides! Many sides!
).Seriously, how can someone not realise the idiocy of comparing a payment processing fee to a storefront fee? Would he not complain more about Game or Toys R Us taking 70% (or thereabouts) instead of the 2-5% of percent that Visa charge?
All this does is continue the confirmation bias of "Valve don't do shit/are a monopoly/don't produce games and still rake in the cash". A truly irresponsible comment.
Also
The implication of this is that he believes the ideal solution would be every publisher should have their own client, since consumer retention/loyalty is better than a unified storefront selling games.
Again, I'd like to see how this analogy would work in a world where physical products are sold, and the stores that sell them are essentially your gateway to users. You can argue that this shouldn't be the case in digital, but as consumers we (naturally) prefer to get our products from stores that have the widest range, even if their business practices aren't fantastic (hello Amazon!). This is basic human behaviour, since we prefer to not go to multiple stores simply to do our physical shopping, and have extended this into the digital world.
Ploid 3.0
Member
Which is why I think it's silly when people get mad at EA selling their games themselves instead of putting it on steam.
PC gamers should be used to downloading their games from the developers. There's no hardware lock that prevents them from shopping around, and Microsoft would love to have a software lock for their store. I don't even buy the, "I don't want to have 20 different passwords." That is a minor thing with apps like keypass and the different storefronts saving your log-in. Also some of the other game fronts don't even use DRM so you don't need to log in to play your game.
PC gamers should be used to downloading their games from the developers. There's no hardware lock that prevents them from shopping around, and Microsoft would love to have a software lock for their store. I don't even buy the, "I don't want to have 20 different passwords." That is a minor thing with apps like keypass and the different storefronts saving your log-in. Also some of the other game fronts don't even use DRM so you don't need to log in to play your game.
Aztechnology
Member
Yup. And it's things like this that just continue the ignorance/arrogance that fester in the industry (on both sides! Many sides!
Seriously, how can someone not realise the idiocy of comparing a payment processing fee to a storefront fee? Would he not complain more about Game or Toys R Us taking 70% (or thereabouts) instead of the 2-5% of percent that Visa charge?
All this does is continue the confirmation bias of "Valve don't do shit/are a monopoly/don't produce games and still rake in the cash". A truly irresponsible comment.
Also
The implication of this is that he believes the ideal solution would be every publisher should have their own client, since consumer retention/loyalty is better than a unified storefront selling games.
Again, I'd like to see how this analogy would work in a world where physical products are sold, and the stores that sell them are essentially your gateway to users. You can argue that this shouldn't be the case in digital, but as consumers we (naturally) prefer to get our products from stores that have the widest range, even if their business practices aren't fantastic (hello Amazon!)/
God, I mean I'm fine with a few clients, publishers having their own if the basic features are there, I understand that. But having too much segmentation would be a disaster for sure.
I don't mind EA selling their games on Origin. I do mind them not giving me - the consumer - the choice of where to buy and how to play them. Ubisoft's business plan is way better - sell Steam version on Steam, and uPlay keys everywhere else. They even embed uPlay in the Steam versions, so that everyone gets the Ubi client. Everyone's happy. Especially if they take the short-term PR hit and just hike their prices on Steam a little - pay more for convenience, or less if you don't care. Cheap prices get you a lot of customer retention and loyalty, too.
I wanna tell you how much movie theaters take when you buy a ticket, but I'm not sure you can handle the shock.
Dirk Benedict
Gold Member
Lotta kneejerk. We all knew this... right..? RIGHT?
Warm Machine
Member
I think it was Microsoft that set the 30% first.
A few years back you'd be roasted for suggesting Steam was a virtual monopoly. People would also point to Minecraft as a success story of selling a game on your own site and using the exception that Steam wasn't a monopoly.
Basically my thought is that Steam owns PC gaming and the value they add is good for consumers but too overwhelming for them as a sales portal. They are way understaffed and have not evolved the storefront to accommodate the 4 dozen or so games that release daily. Then again, the entire industry does not know what to do with this torrential flood of games.
A few years back you'd be roasted for suggesting Steam was a virtual monopoly. People would also point to Minecraft as a success story of selling a game on your own site and using the exception that Steam wasn't a monopoly.
Basically my thought is that Steam owns PC gaming and the value they add is good for consumers but too overwhelming for them as a sales portal. They are way understaffed and have not evolved the storefront to accommodate the 4 dozen or so games that release daily. Then again, the entire industry does not know what to do with this torrential flood of games.
PSA: Monopoly doesn't mean 'the largest of a group of competitors'. Steam is not a monopoly.
Given so much PC gaming revenue is earned outside of Steam, where the biggest games are not on Steam (and never were on Steam, kind of proving success is not predicated on Steam), it's kind of odd to try and argue that it is a monopoly. It's definitely the biggest service and not being on that service is a detriment to many, but these things do not make it a monopoly.
Given so much PC gaming revenue is earned outside of Steam, where the biggest games are not on Steam (and never were on Steam, kind of proving success is not predicated on Steam), it's kind of odd to try and argue that it is a monopoly. It's definitely the biggest service and not being on that service is a detriment to many, but these things do not make it a monopoly.
https://twitter.com/TimSweeneyEpic/status/898316545499201536
Some image cherry-picking by yours truly. Click on the link for the full conversation.
Hah, it's funny that he argues with CDN cost.
It takes a lot of money to design, build, operate and further develop an infrastructure at such a large scale.
PepsimanVsJoe
Member
Yep. This is something I've been wondering about myself.
The number of games being released these days is absolutely unreal. There's no way to keep up.
ArtHands
Thinks buying more servers can fix a bad patch
Wait till you hear the part about Sony and Microsoft taking the same 30% cut AND still charge you to play online
Might've skimmed over it, but something else about cuts.
Humble used to take about 5% (not sure if they still do, as that was a couple of years ago). Assuminng they still do (or at least, charge less than Valve): What developers could easily do, is sell more Steam keys through Humble. They pay less of a cut, but the consumer still ends up with a Steam key.
Of course, it means people wouldn't whine about Valve so much, and also would mean that the balance would shift to Humble being the larger storefront, and Steam being simply a client to run games. Oh, and it would also mean developers and publishers would have to put-up (go to Humble) or shut-up (about Valve being so greedy).
Unless, of course, exposure on Steam helps? Oh. Maybe that's worth paying a larger cut?
Humble used to take about 5% (not sure if they still do, as that was a couple of years ago). Assuminng they still do (or at least, charge less than Valve): What developers could easily do, is sell more Steam keys through Humble. They pay less of a cut, but the consumer still ends up with a Steam key.
Of course, it means people wouldn't whine about Valve so much, and also would mean that the balance would shift to Humble being the larger storefront, and Steam being simply a client to run games. Oh, and it would also mean developers and publishers would have to put-up (go to Humble) or shut-up (about Valve being so greedy).
Unless, of course, exposure on Steam helps? Oh. Maybe that's worth paying a larger cut?
Oh he's well aware of all this.
I like Tim Sweeney, but all he's doing here is simply using his influence to try and generate a push against one of his competitors, to his own advantage. It's fine - he's free to do it. But the act of ignorance is fairly transparent from someone as clever and experienced as he is.
Chairmanchuck
Member
Yeah. I really like Oculus curation. Because we all need that masterpiece:
That might work for 1st World countries, but a lot of gamers are from countries that "have to" pay less for games to be affordable.
They used to, yes. Again, things could've changed, but I doubt it with regards to GOG. I seem remember Humble laying off staff awhile back, so they could've upped their cut, but GOG seem to be stronger than ever.
Well, obviously, the ideal would be Humble adding more currencies, and doing regional pricing. I'm in Malaysia currently, but Humble still try to sell me everything in US dollars.
ThoseDeafMutes
Member
I guess the weird part about associating this 30% figure with them being "a monopoly" is that this isn't a new thing they only installed after they became the dominant PC digital distributer. It's an industry standard percentage and they've been charging this cut - to the best of my knowledge - since the store opened.
Sweeney's argument appears to be even odder than this though, since he wasn't the one who mentioned monopoly initially. He seems to be making a case that once Steam got big enough it should have been dropping it's percentage since it's clearly still going to be profitable at figures below 30%. This would actually make Steam's "monopoly" situation worse since that means companies would be incentivized to sell more on steam and less on other platforms, given that Steam would now be taking a smaller cut. Competing storefronts would be strongly pressured to drop their percentages alongside that, and they're the ones that aren't doing volume on the same scale as valve to begin with.
UE4 asset store allegedly also taking a similar cut is just icing on the cake, really.
Butts VR is great though.
daninthemix
Member
What I don't understand is his use of the word "still".
Why do you "still" want to earn money, Sweeney? Surely you've moved past that...
Why do you "still" want to earn money, Sweeney? Surely you've moved past that...
Jay Shadow
Member
Yes. That's why a lot of CDPR fans buy Witcher games from GoG, cause the standard 30% also goes to CDPR.