Estonian Startup Undercuts Steam, Taking Only a 15 Percent Cut of Sales

Discussion in '[H]ard|OCP Front Page News' started by Megalith, Sep 16, 2018.

  1. Megalith

    Megalith 24-bit/48kHz Staff Member

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    Tallin-based gaming distribution platform Ultra is making a push to lure developers away from the competition by offering a far better deal: unlike Apple (App Store), Google (Play Store), and Valve (Steam), which take a 30-percent cut from all purchased games, Ultra will only take 15 percent from sales it generates through its digital store. "There’s no reason why such a big fee should be taken," Nicolas Gilot, co-Chief Executive Officer of Ultra, said in an interview.

    Some question the ability of new entrants to reach a wide enough fan base. Green Man Gaming, the British online retailer, sells digital keys to games that customers can redeem on a number of platforms, including Steam and Origin. The game is then added to a user’s account. Green Man takes about a 30 percent cut on each sale, while Steam makes money on in-game purchases.
     
  2. emphy

    emphy Limp Gawd

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    Itch.io defaults to 10%, going down as far as 0%
     
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  3. seanreisk

    seanreisk Gawd

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    I think GoG takes even less than that (not sure, though). GoG doesn't cut into Steam very much. Steam has momentum.
     
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  4. jmilcher

    jmilcher 2[H]4U

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    I'd imagine with steam initially you were paying for the r&d going into the distribution platform. I bet that has changed how though.
     
  5. Brian_B

    Brian_B [H]ard|Gawd

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  6. theBrownLlama

    theBrownLlama Gawd

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    as a consumer i don't care about the cut %, i care about the discount

    so can Ultra match the leader , Steam, in discounts?
     
  7. xmadror

    xmadror Limp Gawd

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    Discount only ?
    How about stability and reliability ? For me it'd take a very good deal to even consider them.
    Back in the early steam days, I wasn't to convinced about using them and so was mostly everyone.
    Now they are pretty much my preferred platform because they have a good and well established track record.

    Not sure I'd trust an Estonia new comer for distribution platform.

    However, I do agree that the cut % they take is irrelevant to me.
     
    Last edited: Sep 17, 2018
  8. TheMadHatterXxX

    TheMadHatterXxX 2[H]4U

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    30% wtf :eek: ...and people wonder why Bethesda, EA, UBI...etc. don't want to put their games on Steam...might as well just give Fatty Gabe money for doing nothing.
     
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  9. Iratus

    Iratus [H]ard|Gawd

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    Value destruction is always a winner with investors.
     
  10. theBrownLlama

    theBrownLlama Gawd

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    well, you've got the expect that the min level of service is available for any serious entry into the market. (GOG, Steam, Uplay, Epic, Blizzard...buy-download-play)

    so discount / price is what wins.
     
  11. capt_cope

    capt_cope Gawd

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    Derp much? Or do you really think running a content distribution network the size of steam is "doing nothing" and cheap?
     
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  12. Delicieuxz

    Delicieuxz Gawd

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    Before Valve started Steam, publishers could expect to keep maybe up to 40% of the game sale profits, and a developer might get 6 - 14%. So, Valve's offer to take a 30% cut, with 70% going to the publisher / developer was revolutionary, and even very generous of Valve at the time.

    All later digital distribution platforms also established their cut as being 30% - which they had to do because other digital retailers are already at a disadvantage next to Steam, and they won't get business if they charge publishers a higher rate than Steam. If not for Valve setting the standard that low from the start, other digital retailers certainly would not willingly set their take as low as 30%. EA, Ubisoft? No way. They wouldn't give publishers anything more than they have to.

    For some insight into how profitable selling games was for developers and publishers before Steam compared to after Steam, check out this article with a costs and profit breakdown: https://web.archive.org/web/20121022123538/http://www.mcvuk.com/news/read/opinion-retail-vs-steam


    So, while 30% might sound a lot for hosting downloads and maintaining a client today, it represented massively-increased profits for publishers and developers when Valve introduced Steam.
     
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  13. xmadror

    xmadror Limp Gawd

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    wouldn't that make them just a cd key retailer ?

    It wasn't exactly clear in the article but I was under the impression that Ultra is going to be like steam, gog... and not like gmg, cdkeys....
     
  14. TheMadHatterXxX

    TheMadHatterXxX 2[H]4U

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    Storage and bandwidth are relatively cheap, where have you been for the last decade? Oh..I know...in bed naked with Gabe eating pizza pies.
     
  15. wizdum

    wizdum [H]ard|Gawd

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    Steam is much more than just "storage and bandwidth". They have an amazing CDN for their platform, I use it for benchmarking our business connections. If you have a 10G pipe, Steam will max it out downloading a single game. They didn't just spin up an FTP server on AWS.
     
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  16. Simmonz

    Simmonz 2[H]4U

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    While I agree with others that Itch.io and GIOG already give developers with options it never hurts to have more.

    edited for spelling.
     
  17. theBrownLlama

    theBrownLlama Gawd

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    cdkey retailers going the way of the dodo as publishers want more control over their distribution methods
     
  18. Nebell

    Nebell [H]ard|Gawd

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    Steam is an ancient platform. It needs to change. Its UI is outdated and cluttered and a real pain in the ass to navigate.
     
  19. Private_Ops

    Private_Ops [H]ard|Gawd

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    If you don't like it then don't use it.
     
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  20. Nebell

    Nebell [H]ard|Gawd

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    I don't use it even though I have 600+ games on it. Still, I am allowed to have an opinion on it.
     
  21. Armenius

    Armenius [H]ardForum Junkie

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    Steam is following the KISS philosophy and I like it. They deviated recently by trying to copy Discord with chat and the community hated it. The only complaint I have is that it should be easier to manage DLC for your games like in Origin.
     
  22. Private_Ops

    Private_Ops [H]ard|Gawd

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    Yes.