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Paradox Interactive: "The 70/30 revenue split is outrageous"

IbizaPocholo

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The 70/30 revenue split offered to developers by most platform holders is "outrageous," according to Paradox Interactive's Fredrik Wester, who praised Epic Games' efforts to offer a more reasonable alternative with its own store.

Speaking as part of a panel at Gamelab last week, which was hosted by GamesIndustry.biz, Wester did not mince his words when talking about the deal that the industry's biggest distribution platforms offer to developers.

"I think the 70/30 revenue split is outrageous," he said. "I think the platform holders are taking too much money. Everyone in the press here, just quote me on that."

Steam takes 30% of revenue from the majority of games on its platform -- just like platforms operated by Microsoft, Sony, Apple and others. However, Wester suggested that the 70/30 split was based on a model established by Warner Bros. in the '70s, for the distribution of films on boxed VHS tapes.

"That was physical. It cost a lot of money," he said. "This doesn't cost anything. So Epic has done a great job for the whole industry, because you get 88%. Fantastic move. Thank you very much."

Epic achieving that objective of providing a competitive alternative to Steam is important for the industry, Wester said.

"I think it is, especially for new developers. They have lower margins, to get into the market. But I think it's also a matter of decency. I mean, how much does it actually cost to deliver a game?

"When the competition is low, the platform holder can get a big share of the pie; as competition increases, they need to lower their part of the pie, as well. That's how the market works, right?"

This is a particularly tricky situation for smaller developers, which have small fan-bases that are likely to be Steam users. In addition, the kind of incentives -- both financial and in terms of exposure -- that Epic is offering could make the difference between finishing a game and running out of money, or between turning a profit and making a loss. The stakes are high.

"That [the 88/12 split] is a huge boon," said Dan da Rocha, another panellist, who is best known as the creator of the indie hit Qube. "It's a huge advantage. In some cases, that 30% taken is more than the profit for a small studio. That's just crazy, right? So that's a huge incentive for some of us.

"It's a tricky one. If you have a fanbase on Steam and you go to Epic, there could be a massive outcry there -- a fallout. But it depends on: Is the price right? Does it make sense financially? Is that just a vocal minority on Steam, talking about that and making those arguments?

"It's about weighing that up, I think. But the audience on Epic is getting larger now."
 

A.Romero

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"That was physical. It cost a lot of money," he said. "This doesn't cost anything. So Epic has done a great job for the whole industry, because you get 88%. Fantastic move. Thank you very much."
So having a digital platform doesn't cost anything?

Sorry but that's bullshit. I can understand a comment like that coming from a Gaf user but someone that should know how much infrastructure costs, cash cards regionalized pricing, etc...

This guy is sucking Tim's cock. "Quote me on that".
 

lukilladog

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It´s outrageous only if they don´t help you make more money, companies are not your friends.
 

Bonfires Down

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I believe Epic saw how Paragon and Unreal Tournament failed on their client and decided they would take drastic measures to force Valve's cut lower, since they happened to come across silly amounts of Fortnite money. Keep in mind that Epic only seem interested in creating F2P games at this point, so they would have no benefit from selling Steam keys off-site. Fortnite is big enough that they don't need Steam, but they are taking the long term approach and hope to put future games on Steam with a higher developer cut.

And if Valve refuses to budge Epic is still in a pretty good situation once they add more features to the client.

Also, if the standard cut on PC becomes ~12%, it might become easier to pressure console manufacturers and Apple etc to also lower their cut.
 
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lmimmfn

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It's what the console manufacturers charge. I honestly don't see what the problem is in that sense, it does pay for infrastructure etc. , plus steam( which I have my own gripes against) allows devs to create keys which are sold to other online keystores which do not incur this 30% charge. They basically provide those keys and infrastructure to download for free. No one else is doing this excluding publishers who for their own games have their own platforms.

Its just promotional nonsense, we are with company X therefore costs from company Y are outrageous.
 
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sn0man

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Valve may have to play ball eventually if they sit on the sidelines while Fortnight money builds a bridge to more exclusives and indie devs get more brave.
 
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Holammer

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EGS is irrelevant for the vast majority of games anyway, it is only available for the 1% of devs/publishers, the crème de la crème.
If you don't have a mainstream game with a budget or good buzz (like a successful Kickstarter), you're not getting the golden ticket.
 

TheCockatrice

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There are other stores who offer the same or more percentage to devs than Epic. What about them Paradox and all you other greedy fucking devs/publishers? I guess getting a huge chunk of money upfront makes Valve the evil. Who cares about Sony and others taking same amounts?
 
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quest

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It's what the console manufacturers charge. I honestly don't see what the problem is in that sense, it does pay for infrastructure etc. , plus steam( which I have my own gripes against) allows devs to create keys which are sold to other online keystores which do not incur this 30% charge. They basically provide those keys and infrastructure to download for free. No one else is doing this excluding publishers who for their own games have their own platforms.

Its just promotional nonsense, we are with company X therefore costs from company Y are outrageous.
Except console makers spend billions on hardware and software development. They also buy exclusive content and co advertise with publishers on releases. Valve has almost no cost compared to the big 3 to get back to start every generation selling hardware at a loss to build a platform. Steam just holds their hand out and says give me mine because we are the largest store. They want 30% put some skin in the game.
 

lmimmfn

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Except console makers spend billions on hardware and software development.
They also buy exclusive content and co advertise with publishers on releases.
For their hardware which they no longer sell below cost and their software investment is for First party titles and exclusives aka Epic model on PC
Steam doesnt have to do this and thankfully doesnt money hat developers
Valve has almost no cost compared to the big 3 to get back to start every generation selling hardware at a loss to build a platform.
Since the xbox 360 and PS3 console manufacturers havnt sold a console below cost to make the return on game sales, if you have proof please post. Also Microsoft and Sony are selling "internet access" to game servers.

Steam just holds their hand out and says give me mine because we are the largest store. They want 30% put some skin in the game.
Steam allows devs to sell keys without any cut on external key sites, its not 30% its 0%, the dev/publisher incurs the cost of the key reseller, 10% whatever, but steam still has a cost to deliver the software.
 
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Ailike

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Paradox has had no problem fully utilizing Steam up to this point. This comes across as hypocritical. But I'll tell you what, Paradox. I'll jump elsewhere for your games if you wanna split that 18% difference. You get more, I get a 9% discount? Ohhhhh, its all about you then? Thought as much.
 

RokkanStoned

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Cost of development has gone up.
Cost of distribution has gone down.

Yet it is still 70-30.
Also, why are we only charged 60$. (See inflation)
Additional transactions has also increased and selling parts of the game piecemeal as well. I don't think that's very comparable. More so, sales of games have gone up as well, last time I checked. I feel like this is a bit more complicated than you are trying to make it appear here.

We are "only charged $60" because that's what they believe the barrier of entry is. They'd rather not make it too high and still off-set using microtransactions and dlc. If they'd increase the price it might potentially hurt sales and in turn hurt their revenue. More so, both culturally and as well as consumption wise, games are different than they were before. People's library of games have increased as well and while some things in development have gotten more expensive, some things have equally become easier in terms of iteration and production. The scope that developers and publishers choose to hit is their own choice. The pricing model they use is one of their own choice as well.
 

Wonko_C

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Isn't the split for physical copies even worse? I've heard things like the retailer ends up getting a bigger cut than the publisher and stuff... I doubt that's true, though.
 
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Generic

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Additional transactions has also increased and selling parts of the game piecemeal as well. I don't think that's very comparable. More so, sales of games have gone up as well, last time I checked. I feel like this is a bit more complicated than you are trying to make it appear here.

We are "only charged $60" because that's what they believe the barrier of entry is. They'd rather not make it too high and still off-set using microtransactions and dlc. If they'd increase the price it might potentially hurt sales and in turn hurt their revenue. More so, both culturally and as well as consumption wise, games are different than they were before. People's library of games have increased as well and while some things in development have gotten more expensive, some things have equally become easier in terms of iteration and production. The scope that developers and publishers choose to hit is their own choice. The pricing model they use is one of their own choice as well.
Yes but usually most people buy PC games when they are on discount.
 

Al3x1s

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If Epic can offer a 12% cut then Valve can too.
Steam has a vast stable of developer and user services that both user and developer feedback helped shape, they can't just cut it all of the blue to match Epic's at best barebones offerings in order to then lower the fee somewhat. Also it's not a 30% given Steam keys sold anywhere other than Steam are 0% for Steam (and whatever % the retailer sets for it on his own which is presumably less as Steam still handles all the distribution and service costs just as if the game was bought on Steam taking a hit for it) meaning Steam's final fee is a chunk less than 30% (and 25% and 20% where that applies, the 25% in particular is relatively achievable even for indie games as it'd only take ~333k sales at a $30 price point) as it's obvious those other Steam key sellers actually have enough customers to sustain them otherwise they wouldn't exist. Steam also has practices that actually help the industry grow in emerging markets like locally preferred payment methods (including Steam money cards and cash payments where a person goes to the buyer's place to collect the cash and confirm the purchase) without additional cost to either user or developer/publisher for the benefit. It's also telling we have no exclusive EGS games that went there without an exclusivity deal and the Fortnite money that come with that while we have plenty games that require Steam even though as far as we know Valve never paid anyone to keep their game exclusive. That we now have a tiny minority of games/publishers/developers signed up for EGS due to an inevitably temporary cash arrangement that will only last until Epic feels they have bought enough users to start trying to make a profit out of the endeavor doesn't mean shit in the grand scheme of things and that's the reason Valve simply keep doing their thing rather than react to what Epic does. The silliest thing is indies trying to prop up EGS just because they want to get a Fortnite money bag of their own when it's inevitable that the vast majority of them, given the curation, will never be able to get on there so the more they help spread fud about Steam (the only platform that evolved to the point it gives them the same chances and tools and support as any AAA publisher gets thanks to our feedback from Steam's inception where they needed to sign up with a publisher to get in, to the introduction of Greenlight and eventually the current open method with the small symbolic fee, while EGS pretty much ignores 20 years of evolution to offer in 2019 a service that doesn't even match that of Steam in the early 00s), including Tim's implications that all the good games will be on EGS and Steam will be left with shovelware, the more they essentially try to harm their own business just because they hope they can suck up enough to win the Fortnite lottery. It's pretty funny but thankfully (for them too) they won't achieve anything, Steam will reign supreme if that's the best competition they face.

But sure, Paradox is free to try and make their own distribution channel and get 100% of their sales rather than bend to any Steam or even EGS, 100% is still bigger than 88% after all. We'll see if they manage to make anything half decent a la gog or Uplay (and how much they will charge other companies to use their service if they accept 3rd party games like these, then we'll see how much they think the investment and r&d was worth) or if they will keep failing at it like the likes of Microsoft and Bethesda who are defaulting back to Steam, not because of a money deal but because it's the best platform (until they try their hand at it again, it's not like they will quit being greedy, but at least these failures show it's actually not that easy and insignificant to make a service like Steam, which even EGS for all its hype doesn't match in any way). I'm guessing their upcoming mod platform developed in collaboration with Microsoft is the first stage of exactly such a plan. We'll see if it grows into a game distribution platform worth discussing or if it will end up being just a Paradox launcher super fans of their games have to learn to live with.
 
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HeresJohnny

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Then why are we still being charged $60? This should go down too.
Because people buying digital keep bending over, spreading their cheeks and Ace Ventura-ing that shit by paying $60 digitally when they could pay $40 physically. As long as people continue to get butt rekt and ask for more, nothing will change. The old saying "A fool and his money" and all that. It's not predatory on the part of publishers or developers if the base is informed and willingly decides to be fucking stupid.
 
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TheSadRanger

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If Epic can offer a 12% cut then Valve can too.
The lack of user reviews is pretty big deal to me. Unless the game is an indie darling there's a ton of good indie titles that just don't get reviews or much coverage by the gaming media.

As long as the game doesn't have any sort of political nonsense surrounding it then steam reviews are a decent barometer to go by. I mean it's better than nothing.

There's also other stuff that I don't really care for like the complete lack of weekly sales or discounts and it's not very promising when half of the developers wanted their games delisted when they tried their first big sale.

edit: I mean it's whatever, I'll still buy Outer Worlds for sure and Borderlands 3 probably, but I find myself much less inclined to take a chance on an indie title on EGS then I would on steam.
 
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Kazza

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I hate to say it, but I see his point. I think if I were to purchase a PC game I may do it on the Epic store for the games I truly like. That split is ridiculous for simply being a middle man.
Yep, I'd prefer more of my money to go to the people who actually made the game, not rent-seekers like Valve.
 
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RevenantX

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It's what the console manufacturers charge. I honestly don't see what the problem is in that sense, it does pay for infrastructure etc. , plus steam( which I have my own gripes against) allows devs to create keys which are sold to other online keystores which do not incur this 30% charge. They basically provide those keys and infrastructure to download for free. No one else is doing this excluding publishers who for their own games have their own platforms.

Its just promotional nonsense, we are with company X therefore costs from company Y are outrageous.
Check post e3 giant bomb podcast. Jeff said he heard from multiple sources there console manufacturers don't charge 30% anymore but they don't want it to reveal publicly.

Tbh i can totally see MS not charging 30% as their platforms like XBOX don't carry same weight as it used to in 360 gen. Devs can make enough money on PS and PC without releasing on Xbox.
 
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niveaformen

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No i don't think so. Also even if they reduce cut they will never reveal publicly coz fanboys and media will run and create stupid articles over it
I remember looking everywhere to place a figure on what they charge because everyone was having a dig at Steam. It was mentioned 30% somewhere, but can't say if it was true or has been revised.
Well that's the thing... Steam is a trend setter in this pricing scheme but if others have matched it, they should also get a look at. Like Apple and Google app stores
 

RevenantX

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True, but the platformers do deserve 30% in my opinion based on what I know.
Why Valve deserve 30% cut ? When they don't make AAA quality games anymore and for Hard ware they do deal with 3rd party coz if hardware fails that third party will take brunt of it.

For example- Steam machine
 

RevenantX

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I remember looking everywhere to place a figure on what they charge because everyone was having a dig at Steam. It was mentioned 30% somewhere, but can't say if it was true or has been revised.
Well that's the thing... Steam is a trend setter in this pricing scheme but if others have matched it, they should also get a look at. Like Apple and Google app stores

Ya but that doesn't mean they still charging same. You checked years ago not recently. Things are changing.

GOG, Xbox don't carry same weight as they used back then. I can make millions just by releasing on PS,Switch and Epic store
 
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MiyazakiHatesKojima

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Why Valve deserve 30% cut ? When they don't make AAA quality games anymore and for Hard ware they do deal with 3rd party coz if hardware fails that third party will take brunt of it.

For example- Steam machine
Imagine if that extra 16% cut would be the main reason why Half Life 3, Portal 3, Left for dead 3, and Team Fortress 3 get developed in the future :)
 

meirl

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Also, if the standard cut on PC becomes ~12%, it might become easier to pressure console manufacturers and Apple etc to also lower their cut.
Nah, PC is an open Platform. Consoles are not. You can just release the games on your own and put them on the console.
 
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Chacranajxy

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I mean, whether or not distributors are providing a physical product, there's obviously value in what they do. If there wasn't, Paradox would sell their games directly. I don't think 70/30 is particularly outrageous.
 
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