At Gamelab 2019, a developer panel discussed Epic's attempt to offer an alternative to the dominant revenue share model
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."