Phoenix Point developers got more than $2 million for Epic exclusivity deal

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naib

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https://www.pcgamesn.com/phoenix-point/epic-paid-2-million-for-phoenix-point-exclusivity

The deal Phoenix Point developer Snapshot games struck with Epic Games to make the turn-based tactics title a timed exclusive on the Epic Games Store was likely worth more than $2 million USD, according to one investor who helped finance the game on Fig. Working backwards from the numbers announced in an email from Fig, this investor believes Epic probably paid Snapshot about $2.25 million for the exclusivity deal, using SEC filings and already-published information on breakeven points and revenue splits.
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EGS must have paid them more than $2 million because the crowdfunding raised $2 million and the Snapshot Point CEO said that they'd still be in the black with the EGS deal even if they returned all crowd-sourced funds.

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The Snapshot Point CEO also said:

"Obviously I can't go into details about the deal - but it's for a minimum guarantee - which means Epic will guarantee that we will sell X number of copies. Even if we don't hit that number, they still pay us."

"Again, let me just be clear. Yes, we're being "paid" by Epic (it's actually a minimum sales guarantee). This wasn't a decision we made over night"

"We knew there would be upset, anger and outrage. We knew there would be refunds. This was all factored into our decision."

"Still a lot with a minimum guarantee. Enough to keep the studio running for years to come - and that was the point of this. It significantly reduces our risk on launch and means we can continue to provide content and updates"



Enough to keep the studio running for years to come sounds like it might have been considerably more than $2 million and the $2.25 million that the investor in the PC Games article speculates.

Epic are making billions each year from Fortnite. They have so much money they can't possibly know what to do with all of it. Tim Sweeney has said it's likely EGS won't make any profit while they're buying exclusives, which means that Epic are paying publishers and developers at least as much as their games make for Epic through EGS.

Epic's current strategy isn't to make profit (they have no need of more money) but to grow their platform's customer base as quickly as possible.


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As to Snapshot Point's exclusivity deal with Epic, I agree with these quotes from Phoenix Point backers:

As a company you shouldn't take people's money by making certain alluring promises, spend that money, and then when things are going well for you back-track on promises before giving the money back when customers' money and satisfaction is no longer as pivotal for your long-term success and survival. Customers aren't there to act as temporary interest-free loan services, they are there to back projects so they can support the fulfillment of certain promises.

And as far as games go, ensuring they release on stipulated platforms is an important part of that. Add on as many platforms as you want, but do not take away any of them, especially if it means breaking your word after you have people's money and done what you need with it. It will only make backers feel like they have been used and exploited, rather than valued as huge contributors to getting the crowd-funded game off the ground.
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I think what makes this particularly galling is how they basically used us backers as an interest-free loan. They took our money, developed to the point where it was mature enough to attract external investors, then totally changed the game plan and fully expect us to withdraw our cash, since they're now out of the high-risk phase of the project.

The conned us into lending them the money, and manoeuvered it so we'd be sitting on the bill if the development project failed. For a game that sold itself based on community involvement, with backer builds and all, this is just awful.
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Its hard to blame a publisher for selling out when the entire point of making commercial AA or AAA games is to sell product.

Having said that 99% of the games I buy are impulse buys... which is why most of the games I buy get little play or I play through them once and move on. If I know they went in for this exclusive BS it makes it really easy to skip them. I'm sure long term none of these exclusive publishers are really going to suffer... but it will keep me from buying them for the most part.

In a few years I'm sure Epic will have either settled into being an also ran... or have moved on from the idea of being a digital store company. I mean buying exclusives really is a path to know where, just ask MS. The only exclusives that work out long term are in house ones.
 
They're just forking out the money now between the exclusives and freebies to get people to build a decent enough library to where they get used to using epic and the store becomes self sufficient with repeat customers using the cash cow generated from Fortnite. The business model is very obvious. In a year or three the human attention span will break from the constant hatred of the evil Epic store and the average person will just buy without a care.

The only real problem is the crappy launcher which doesn't double as a social network like Steam.

Epic, I charge $2 million for more clinically logical ideas. For that price I'll even throw in a few prototype GUIs for the Epic Steamkiller Client
 
Well I'm glad they are in the black no matter what, because they aren't getting anything out of me. Unfortunately as much as this brings bile to my throat, it isn't going to change anything. Gamers as a demographic have proven incapable of having any willpower or impulse control so developers simply don't have to care about screwing them over.
 
Another game I won't be buying.

At first I was mostly just annoyed at Epic and their exclusivity antics. But this takes things to a new level. EGS is straight up cancer.
 
JustinCorrigible said:
At least it seems like they're getting use out of all that Fortnite cash.
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Not seeing the use so far. They seem to be lighting money on fire to take games hostage just to let them wither and die on the epic store.

Epic's strategy is like an insufferable rich kid trying to pay people to be his friend and come to his birthday party.
 
odditory said:
Not seeing the use so far. They seem to be lighting money on fire for the purpose of taking games hostage just to let them wither and die without many sales on the epic store.

Epic's strategy is like an annoying rich kid trying to pay people to be his friend and come to his birthday party.
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That's kind of what I was implying.
 
odditory said:
Not seeing the use so far. They seem to be lighting money on fire for the purpose of taking games hostage just to let them wither and die without many sales on the epic store.

Epic's strategy is like an annoying rich kid trying to pay people to be his friend and come to his birthday party.
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It really depends on how the sales work out. As much as people on forums like this like to loudly yell about this stuff none of us are the general PC gamer audience. If Epic gets the games that people want to buy without waiting then they will get an audience and some of those games will sell.
 
Dekoth-E- said:
Gamers as a demographic have proven incapable of having any willpower or impulse control so developers simply don't have to care about screwing them over.
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We'll see. The growing distaste for Epic hijacking games and paying publishers to stop selling their games in other stores and giving gamers a choice - that seems to transcend any simplistic Modern Warfare 2 or whatever single game type boycotts of the past.
 
Derangel said:
It really depends on how the sales work out. As much as people on forums like this like to loudly yell about this stuff none of us are the general PC gamer audience. If Epic gets the games that people want to buy without waiting then they will get an audience and some of those games will sell.
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They did admit that they are expecting to loose money on this.
 
odditory said:
Not seeing the use so far. They seem to be lighting money on fire to take games hostage just to let them wither and die on the epic store.

Epic's strategy is like an insufferable rich kid trying to pay people to be his friend and come to his birthday party.
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Not really. Epic is the rich kid that uses their parent's money to buy every last popular toy in the store so no other kid can play them unless they come to his place.
 
M76 said:
They did admit that they are expecting to loose money on this.
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Epic expects to lose money on the store, this year. That is not at all surprising since they are likely throwing around several million dollars for these exclusives. Plus they are waiving fees in some cases. That really has nothing to do with whether or not the games themselves will sell. Metro reportedly sold pretty well at launch. Borderlands 3 will probably be be big one to measure whether or not this store will be successful going forward.
 
They are after getting market share. Sure some gamers are vocally pissed but quite a few will get the store to get a game now.
Epic will keep running a loss to build up a base. They could probably keep losing money for quite some time (riding off Fortnite) while giving away games for free or securing games (as developers won't lose money )

Once there is a significant number of users the tap will be turned off and comparable prices by exposed to the end user BUT then they are on epic and it's steam Vs epic and the end user will use what get them the most.

Fortnite as a cashcow will dwindle at some point and as long as the epic store is feature comparable, enough content and enough of a user base to be self sufficient

Expect such bullshit "exclusives" to continue as epic throws money at establishing a consistent income stream. ONLY developers seeing a knock-on effect will this change
 
Mode13 said:
They're just forking out the money now between the exclusives and freebies to get people to build a decent enough library to where they get used to using epic and the store becomes self sufficient with repeat customers using the cash cow generated from Fortnite. The business model is very obvious. In a year or three the human attention span will break from the constant hatred of the evil Epic store and the average person will just buy without a care.
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I don't know about that. When games are paid-exclusives to EGS, but appear on both Steam and EGS, and maybe other places, then what guides a person's purchasing decision? I think it would then be price, features, and service. EGS' prices are no cheaper than Steam's (The Metro Exodus $10 cheaper thing is only for North America and it's a paid-for promotion), and in many cases are more expensive than Steam because EGS doesn't do regional pricing. When it comes to features and service, well... Steam wins hands-down.

So, between buying a game on EGS or Steam for the same price, I don't see why many people would choose EGS, unless they're a hipster and just want to do opposite of what most people do.


EGS will have to develop a lot more features to be competitive with Steam in terms of features (Tim has already said he doesn't plan to have feature-parity with Steam) and then will likely have to increase EGS' fee to support a wider feature set, or, EGS will have to go back to buying exclusives. Otherwise, EGS might turn out to be another also-ran.
 
naib said:
Epic will keep running a loss to build up a base. They could probably keep losing money for quite some time (riding off Fortnite) while giving away games for free or securing games (as developers won't lose money)
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Videogame sales are more nuanced than simply recovering production costs. Publisher lets their current game wither and die on EGS for a one-time payout, and they're cannibalizing sales and interest in future projects. Few people buying current game = even fewer caring about sequels. Lost mindshare, hype, PR value, word of mouth are hard to measure, but can make or break a game's success.

Even if they go crawling back to Steam after getting burned by Epic's Faustian deal, or their timed exclusivity window ends, they'll have lost momentum and won't recover those lost sales. Publishers aren't stupid, and are surely considering at least some of these external factors, but spinning the roulette wheel anyway. We'll see.

This goes far beyond which store has the game cheapest - in a broad sense its about the digital locker that gamers feel is trustworthy to provide continuing access to their game library investment - the one they can count on to still be around years or decades from now. Steam has the track record here, and many just don't have that same faith in Epic, especially given their reckless business practices.
 
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odditory said:
Here's the flaw in that simplistic strategy, because the reality is far more nuanced. A publisher lets their current game wither and die on EGS for a one-time payout, and they're cannibalizing sales and interest in future projects. Few people buying current game = even fewer caring about sequels. Lost mindshare, hype, PR value, word of mouth are hard to measure, but can make or break a game's success.

Even if they go crawling back to Steam after getting burned by Epic's Faustian deal, or their timed exclusivity window ends, they'll have lost momentum and won't recover those lost sales. Publishers aren't stupid, and are surely considering at least some of these external factors, but spinning the roulette wheel anyway. We'll see.

This goes far beyond which store has the game cheapest - in a broad sense its about the digital locker that gamers feel is trustworthy to provide continuing access to their game library investment - the one they can count on to still be around years or decades from now. Steam has the track record here, and many just don't have that same faith in Epic, especially given their reckless business practices.
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Ahh but what I wrote was from the perspective of Epic. They have tonnes of money (atm) and they don't care if they screw over the developers due to loss sales while the developer-accountants are happy for the short term as they have the $$ from such sellout.

The cut that Epic take is worse than the Steam cut but spin wins. Yes the developers who do such a deal and lose actual sales in the short term will not care *IF* they reclaim the sales on steam. The developers are taking the biggest risk here and with something like BL3 going to Epic-Store (6mo exclusive) the Epic method is going to win
 
As a customer; I need phoenix point less than phoenix point needs me. If you sign an exclusivity agreement I won't buy your product. It's really that simple.
 
odditory said:
We'll see. The growing distaste for Epic hijacking games and paying publishers to stop selling their games in other stores and giving gamers a choice - that seems to transcend any simplistic Modern Warfare 2 or whatever single game type boycotts of the past.
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I would love to be wrong, unfortunately I doubt I will be.
 
odditory said:
Videogame sales are more nuanced than simply recovering production costs. Publisher lets their current game wither and die on EGS for a one-time payout, and they're cannibalizing sales and interest in future projects. Few people buying current game = even fewer caring about sequels. Lost mindshare, hype, PR value, word of mouth are hard to measure, but can make or break a game's success.

Even if they go crawling back to Steam after getting burned by Epic's Faustian deal, or their timed exclusivity window ends, they'll have lost momentum and won't recover those lost sales. Publishers aren't stupid, and are surely considering at least some of these external factors, but spinning the roulette wheel anyway.
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This is pretty much spot on. If they were going to loose long term they wouldn't be putting games on EGS. I'm sure the highly opinionated people who don't have the big data that the publisher/developers/industry specialists have access to will be along shortly to tell the professionals how they're wrong though.

Low fees and guaranteed sales don't mean much if you flop. If you flop so poorly and manage to only sell 300,000 copies and Epic has to pay you for 500,000 copies, you're still going to loose money if you could have sold 1,200,000 copies elsewhere. The only reason anyone would entertain this idea is if they knew their project was an utter failure and knew they could never finish the game. Put an unfinished game to pull a fast one on Epic (like Just Cause 4 or Batman Arkham Knight) which have strong brand recognition but were unfinished and therefore won't sell anywhere near the normal rate. But I assume Epic probably has a clause where they more thoroughly evaluate a game that they offer guaranteed sales for.

TLDR: If this would loose money long term, no one would choose EGS over Steam.

M76 said:
Not really. Epic is the rich kid that uses their parent's money to buy every last popular toy in the store so no other kid can play them unless they come to his place.
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Eh, it would be more like the rich kid (Epic) using their own money they earned themselves (from UE4 & Fortnite) in a worst case scenario. In a best case scenario, a rich kid using their own money and all the other kids willing joining the rich kid to play together.
 
Derangel said:
Epic expects to lose money on the store, this year. That is not at all surprising since they are likely throwing around several million dollars for these exclusives. Plus they are waiving fees in some cases. That really has nothing to do with whether or not the games themselves will sell. Metro reportedly sold pretty well at launch. Borderlands 3 will probably be be big one to measure whether or not this store will be successful going forward.
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But there is no way to tell, as you'll never know what would've been if the game sold on multiple stores. Comparing it to other games or previous games in the franchise is not a reliable indicator of how much sales they loose over exclusivity. Video games are more popular than ever, so I'd expect borderlands 3 to sell more than borderlands 1-2 as well. But I'd not dare to draw any conclusions from that regarding the effect of the epic store.
 
Flogger23m said:
Eh, it would be more like the rich kid (Epic) using their own money they earned themselves (from UE4 & Fortnite) in a worst case scenario. In a best case scenario, a rich kid using their own money and all the other kids willing joining the rich kid to play together.
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Eh? What Eh? You are clearly biased in this. Regardless if it is their parents (tencent) money, or fortnite money. They are using it to force other kids to play in their shop under their rules, by hoarding the toys. If the game was still available elsewhere, any gamer joining epic would be free will, this is duress.
 
M76 said:
Eh? What Eh? You are clearly biased in this. Regardless if it is their parents (tencent) money, or fortnite money.
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Made me lol due to the irony.

Part in bold is right but contradicts your previous comment. Epic earned their money from UE, various games and of course Fornite. If it wasn't for Fornite Epic wouldn't be worth a fraction of what they currently are, which has little to nothing to do with Tencent. Their influence is practically nonexistent according to Tim Sweeney when it comes to game/engine development. Tencent didn't develop Fornite and don't have the talent behind it. They were largely irrelevant to Epics recent meteoric success.
 
MavericK said:
Eventually, the gravy train is going to run out, and then these developers might be SOL.
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I think these are timed exclusivities. In fact, if Epic folds, and people still want the games, they'll buy again on Steam. It's the patrons of the Epic Store who are taking the risk. Publishers are damaging their Reps especially if the Epic Store fails. When someone can't transfer their game to steam, they'll blame the publisher. If a publisher won't make a game in the series available, I'm not going invest in another series with them too quickly.
 
Jagger100 said:
I think these are timed exclusivities. In fact, if Epic folds, and people still want the games, they'll buy again on Steam. It's the patrons of the Epic Store who are taking the risk. Publishers are damaging their Reps especially if the Epic Store fails. When someone can't transfer their game to steam, they'll blame the publisher. If a publisher won't make a game in the series available, I'm not going invest in another series with them too quickly.
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They're pretty much all timed exclusives. You can cater to the Steam hold outs. Eventually we'll see this fade away as more people become used to using the EGS store. EGS won't fail as Epic is backing it. They have had excellent relations with developers dating back about two decades and have been behind the most popular game engines for almost twenty years. They have had a strong working relationship with many of these developers for years and their customer service/support has been top notch compared to Crytek/Valve. If they do end up winding down EGS it will still be around for people to use their games. If they decide to close it down for whatever reason Epic will surely do whatever they can to get the keys working for an alternative platform like Steam.

But I don't see that happening. Epic seems to have long term goals for EGS. It certainly started out as a launcher for just Fortnite, but they're gradually growing it into a full client & store similar to what Valve did with Steam. EA originally seemed to have similar intentions with Origin and they started putting up numerous 3rd party games. Somewhere along the line a few years back they threw in the towel and some of the 3rd party games disappeared from Origin. I found this interesting as I thought EA would happily retake their traditional publishing/distribution role but clearly they're only interested in buying a studio and selling in house games (like Respawn). They still have some games up like Tomb Raider but really don't seem to put much effort into it. Which is okay with me, I like Origin but I prefer Steam overall.
 
Flogger23m said:
They're pretty much all timed exclusives. You can cater to the Steam hold outs. Eventually we'll see this fade away as more people become used to using the EGS store. EGS won't fail as Epic is backing it. They have had excellent relations with developers dating back about two decades and have been behind the most popular game engines for almost twenty years. They have had a strong working relationship with many of these developers for years and their customer service/support has been top notch compared to Crytek/Valve. If they do end up winding down EGS it will still be around for people to use their games. If they decide to close it down for whatever reason Epic will surely do whatever they can to get the keys working for an alternative platform like Steam.

But I don't see that happening. Epic seems to have long term goals for EGS. It certainly started out as a launcher for just Fortnite, but they're gradually growing it into a full client & store similar to what Valve did with Steam. EA originally seemed to have similar intentions with Origin and they started putting up numerous 3rd party games. Somewhere along the line a few years back they threw in the towel and some of the 3rd party games disappeared from Origin. I found this interesting as I thought EA would happily retake their traditional publishing/distribution role but clearly they're only interested in buying a studio and selling in house games (like Respawn). They still have some games up like Tomb Raider but really don't seem to put much effort into it. Which is okay with me, I like Origin but I prefer Steam overall.
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It may be successful but at some point if it doesn't make money, Epic will drop it. They won't float an identified failure more than a year.

If they want a graceful exit, they'll say it's mature and spin it off. Give it enought money to tread water for a year or so plus whatever invester money they can add in and then let it fail divorced from Epic.
 
Jagger100 said:
It may be successful but at some point if it doesn't make money, Epic will drop it. They won't float an identified failure more than a year.

If they want a graceful exit, they'll say it's mature and spin it off. Give it enought money to tread water for a year or so plus whatever invester money they can add in and then let it fail divorced from Epic.
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What makes you think they would drop it after a year when they already said they aren’t planning to make a profit on it for the first year? Epic has made it clear that they don’t currently care about turning a profit on the store, they care about building a customer base and getting games.
 
I know why they are doing it: to increase their digital storefronts' marketshare.

But why is that even necessary? Fortnite has a huge playerbase... they've already got all of those gamers as store users...

Good luck to them. I'm not even remotely a fan of the strategy, and have 0 plans to buy any of these games. Soured on the developers who are falling for it as well. The supply of games (that I own) exceeds my time to play them all, I don't need these games. I am not going to support this shit0ngamers strategy in the slightest.
 
GoodBoy said:
I know why they are doing it: to increase their digital storefronts' marketshare.

But why is that even necessary? Fortnite has a huge playerbase... they've already got all of those gamers as store users...

Good luck to them. I'm not even remotely a fan of the strategy, and have 0 plans to buy any of these games. Soured on the developers who are falling for it as well. The supply of games (that I own) exceeds my time to play them all, I don't need these games. I am not going to support this shit0ngamers strategy in the slightest.
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They’re a multi billion dollar company. They, and their stakeholders, are not happy with some of the market or some of the money they want all of the market and all of the money. The more money a company makes the more investors expect it to grow, even if those expectations are unrealistic.
 
All this illogical complaining...and I bet a majority of the complainers would be just fine is it were a Steam exclusive.

Right?
 
It's not so much the exclusivity deal, but the developers attitudes towards the gamers that backed their project from the beginning, and their statements that the gamers and early pre-orderers did not matter because they expected to have to issue refunds and even if 100% of gamers requested a refund they would still be in the black and still not give a fuck because they already got Epic's money. Fuck 'em if that's how they want to be LOL.
 
MavericK said:
The big issue is that they said it was going to be on Steam, people backed, and then they reneged on that. The outrage makes total sense to me.
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To top it off, this was crowd funded. If I recall it wasn't Kickstarter but the people were actually investors rather than donators. Which makes this a whole lot worse because they advertised it would be a Steam game. Now people will get Steam and Epic keys, but they have to wait a year for the Steam version. Technically this may be legal, but it is very low to stoop. They should give everyone who invested/backed a Steam key so they can download it day 1. People who purchase it at retail can get Epic keys, but those who backed should get the Steam copy at release.
 
DejaWiz said:
I bet a majority of the complainers would be just fine is it were a Steam exclusive.

Right?
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Straw man. You won't find anyone suggesting games be Steam exclusives. And certainly not Valve. Ideal for gamers is they be available on as many stores as possible. Anything else doesn't benefit consumers.
 
MavericK said:
The big issue is that they said it was going to be on Steam, people backed, and then they reneged on that. The outrage makes total sense to me.
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I agree. Their "we'll give backers both an Epic and Steam key" statement is really not good enough when they promised it would be released on Steam, at launch. What they should have done is put the game on Steam and just issued Steam keys to backers, while giving the backers a choice between EGS and Steam and also making sure that both versions are cross-compatible. I can't say I blame them for taking a deal that sounds like it will ensure their company stays afloat without crowd funding, but it is still a kick in the nuts to any backers.
 
Derangel said:
I can't say I blame them for taking a deal that sounds like it will ensure their company stays afloat without crowd funding, but it is still a kick in the nuts to any backers.
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They aren't going to stay afloat with the hate they've engendered among backers of the game. The took a one time payout to effectively commit suicide, as they'll struggle to get anyone to care about any future games or projects.

It's simply batshit to me how Epic, and all the third parties they're paying to kill their games and relationships with their customers, think that being polarizing will blow over. The customer relationship is everything.
 
odditory said:
They aren't going to stay afloat with the hate they've engendered among backers of the game. The took a one time payout to effectively commit suicide, as they'll struggle to get anyone to care about any future games or projects.

It's simply batshit to me how Epic, and all the third parties they're paying to kill their games and relationships with their customers, think that being polarizing will blow over. The customer relationship is everything.
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Forums like these tend to be giant circle jerks where we delude ourselves into thinking the shit we say applies to the general audience outside our little circle. It is FAR too early to make any kind of definitive statement on how Epic, or any 3rd parties, will do with these contracts. All you are doing is assuming the, mostly justified, hate thrown out by these small communities mean all gamers think the same way and will do the same thing. Ubisoft, ActiBlizz, and EA have spent over a decade pissing off customers and they're still stupidly rich companies.
 
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