Epic gives Steam an Ultimatum

Epic gives Steam an Ultimatum

We’ve largely remained silent on the whole Epic Games Store versus Steam battle that’s been going on lately because, honestly, we’d rather just write about indie games on their own merits, as opposed to the store fronts they happen to be on.

That’s not to say this isn’t an important topic to discuss. Steam has hardly been the best store front for indie developers, with its complete lack of any sort of curation and the sheer number of games (be they hidden gem, diamond in the rough or asset flip) that come out every day on the platform making it all too easy to get lost in the flood. Epic offering an alternative, and currently a much better cut for developers, certainly seems like a good thing, but the Epic Games Store is lacking some major, standard user features and Epic Game’s actions and apparent tactic of using all that Fortnite money to simply spend away true competition strikes me as a little less than squeaky clean

However, today Epic upped the ante in a rather shocking turn.

It was announced today that Psyonix, the indie studio behind Rocket League, was being acquired by Epic, with the deal being finalized sometime between May and June 2019. Until now, Epic had been dealing on a title by title basis, signing individual games as Epic Games Store Exclusives. Now, they seem to be turning their eyes to whole studios, effectively acquiring games exclusively by acquiring the entire company that made them.

There’s of course a lot of questions about what this means for the wildly popular Rocket League, how players that own the game on Steam will be treated when the actual change happen and what Epic will do next, but I want to focus on one little nugget that got dropped during the resulting social media storm today: an ultimatum Tim Sweeney, founder and CEO of Epic Games, gave to Steam:

Epic Games has earned the favor of a lot of developers due to it’s 12% revenue share, which is a much better deal that Steam, even with Valve’s revised scaling revenue share. Since 2018, Valve takes a 30% cut of games base, with this percentage falling as games get larger and larger earnings. After  a game earns $10 million, this percentage drops to 25%. It then  drops another 5 percentage points to 20% on a game’s earnings over $50 million. So, for indie developers, the idea of getting 88% of the profits you make on the platform, as opposed to 70%, regardless of how much your game ends up earning overall, probably sounds pretty damn good. Despite my upcoming skepticism, I’ll readily admit that it would certainly be good for indie developers if Valve were to match this and they got to keep more of what their game makes.

However, I think I trust Tim’s ultimatum as far as I can throw it, and I have horrible upper body strength, so that’s not very far. While there’s an optimistic part of me that wants to believe that Steam might change it’s revenue sharing set up, and that Epic Games might actually relent in it’s crusade of exclusivity if Steam did change it’s current practices, I’m not at all convinced Epic Games isn’t simply trying to starve out Steam, both from a monetary stand point and from the standpoint of available games. Exclusives are just that, exclusive, and there are a lot of game’s making there way to the Epic Games Store. True, more than a few of them will probably come to Steam eventually, but with how quickly the games cycle goes, I’m not convinced they won’t just be lost. A lot of gamers are going to leave Steam for the Epic Games Store to play these games, and some of them might not come back.

I also think that that 12% revenue share from Epic Games isn’t going to last. Epic doesn’t have the user support, store functionality or basic UI function that Steam does, and I can’t help but feel they’re burning things a bit too bright. Steam has been around for a long time, and while I’m glad to see them get some competition to shake off their lethargy, I think that ultimately Epic might be trying to get in, snatch up as many titles and developers as possible with generous upfront cash, and could very well reduce that revenue share once things settle down and people are locked in, sighting development or infrastructure costs they “didn’t expect”.

This is all just my opinion, so take it as that, but I urge skepticism and caution to any gamer or indie developer that might be reading this. Epic might be offering up a deal that seems to be too good to ignore, but deals change, and a “get mine before its gone” mentality does nothing to help the larger community of indie developers.

Okay, now I’m off to find something weird and wonderful and new on itch.io.

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Editor-in-Chief of IndieHangover.com. With a soft spot for epics, sagas and tales of all types, Jacob approaches games as ways to tell stories. He's particularly interested in indie games because of the freedom they have to tell different stories, often in more interesting and innovative ways than Triple A titles.