The EPIC Effect: Microsoft Changes Revenue Split To Match EPIC Store, Steam Holds Firm

from the competition-is-amazing dept

Way back when Epic released its Epic Store PC game storefront, the release of this new competitor to Steam focused on two major selling points. The first was timed exclusives that it shelled out tons of money for, allowing it to sell games the public couldn't get anywhere else for a certain period of time. This pissed off lots of people, as the public generally doesn't like exclusives. That said, Epic did mention that it would end its exclusivity practices if the rest of the gaming storefront world, especially Steam, mirrored the Epic Store's second key selling point, which was a far more favorable split offered to game developers than the "industry standard" 70/30 split that sees places like Steam getting nearly a third of game revenue just for hosting the game on its platform. Instead, Epic's store has a 88/12 split, meaning the platform is willing to take less than half of the revenue Steam extracts from gamemakers.

In other words, Epic positioned its exclusivity program as merely a method to get the other storefronts to take less money away from game developers, which softened the blow with the public and surely made it a great many fans in the gaming industry.

Well, Steam hasn't caved yet. But Microsoft did just announce that it is moving to match the splits offered by the Epic Store, marking some movement in the industry and perhaps an indication of things to come.

“As part of our commitment to empower every PC game creator to achieve more, starting on August 1 the developer share of Microsoft Store PC games sales net revenue will increase to 88%, from 70%,” Head of Xbox Game Studios Matt Booty wrote on the Xbox blog. “A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so.”

The move is the latest in a bit of a sea change for game revenues. In a survey released yesterday by the Game Developers Conference, only 3% of respondents thought the once-standard 30% take by a platform was justified. The Epic Games Store broke onto the scene by notably only taking 12% of the revenue. Over the last year, both Apple and Google have lessened their cuts for games making under $1 million. Steam, meanwhile, has held more or less firm on its 30% take, with the cut lessening the more money a game makes, a system that makes more money for larger, richer publishers, while penalizing smaller indies.

Funny what a little bit of competition can do. While it is certainly notable that Steam is watching all of these changes with its proverbial arms folded, doing no sort of splits-changing of its own, maybe that's okay and maybe there's a place for that. Or maybe the pressure continues to build and the Epic Store does end up being the preferred storefront for smaller titles and indie developers and Steam eventually does have to come down from the 70/30 split.

All I know for sure is that without Epic entering this arena and pushing the envelope, be it for altruistic reasons or otherwise, it seems unlikely that even Apple, Google, and Microsoft would have made any of these changes. That's why, whatever you think of the Epic Store, the added competition certainly is nice.

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Filed Under: competition, epic store, steam, video game stores, video games
Companies: epic, microsoft, valve

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  1. identicon
    Anonymous Coward, 29 Apr 2021 @ 9:33pm


    One does wonder why it takes 30% of the revenue to maintain a website offering the game & patches.

    Part of it is because Valve hasn't made worth crap to keep their empire afloat for years now. Essentially, Valve is a cloud provider now not a game development company, and has been that way for many years.

    Another part is that running servers and maintaining security on the biggest platform for gaming has it's costs. Especially when nothing else is coming in to offset them. Then you have to factor in their annual mega sales....

    Another part is the time Steam was created. Keep in mind Apple has done similar splits with their App Store. Steam was also the first majorly successful online store service for PC gaming and therefore got to set the initial rate.

    Not saying that the current rate is justified now, but the simple fact is that Steam has and continues to reign supreme in the service that it offers. Competitors were bound to show up eventually, and despite Epic's efforts, it seems Valve hasn't been phased by Epic's disruption as much as Epic would have preferred.

    *: Of course that also doesn't account for Epic's own poor offerings by comparison. It was an obvious cash grab attempt. Such as non-working or outright missing functionality expected from pretty much any modern online storefront regardless of industry. Blatant bribery to get publishers and developers to assign exclusive distribution rights to them. Outright hostility towards their customers. Lack of the community support services that Steam built over years and that gamers have come to take for granted. Etc.

    Long story short, When you try to dethrone the current king you need to at the very least have similar offerings to the current one and have something that can justify others transition to supporting you. Epic didn't have similar offerings and thought it could buy it's support from gamers. Fortunately for the rest of the industry, Epic's attempts failed.

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