Steam Gives Successful Developers a Larger Cut of Game Revenue

Discussion in 'HardForum Tech News' started by Megalith, Dec 2, 2018.

  1. Megalith

    Megalith 24-bit/48kHz Staff Member

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    As a way of persuading bigger developers and publishers to remain on its platform, Valve has introduced a new distribution agreement that results in bigger payouts for the most successful, best-selling titles. Games that make over $10M will now get a 75% cut instead of the usual 70%, while $50M+ titles will get 80%. “The revenue changes won't please indie game makers.”

    Valve has also loosened its control over sales data. Creators now have explicit permission to share their sales info with others "as they see fit," whether it's with other companies or the public. While there have certainly been other ways to find out whether or not a game is a hit, this could eliminate some of the guesswork. The new agreement also includes some basic GDPR compliance info and has required some basic safety warranties for VR games.
     
  2. tunatime

    tunatime 2[H]4U

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    Honestly 30% is huge they could get away with that when they where the only game in town but now you have a lot of other store fronts.
     
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  3. Ultima99

    Ultima99 [H]ardness Supreme

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    Not surprising, this market is similar to TV streaming. Netflix and Hulu now has to compete against a variety of competitors not the least of which is Amazon.
     
  4. Chris_B

    Chris_B [H]ardness Supreme

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    Well Gabe is already a billionaire close to 4 times over, that actually surprised me when i googled it but it's true.
     
  5. sfsuphysics

    sfsuphysics I don't get it

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    Wow they got 30% of all pc game sales done through their store? What a fucking racket, no wonder they have no inkling to do Half Life 3 or Portal 3, they are making money simply for being a "megaupload" type of place who deals with transactions. Wonder how many GTA5 sales were through steam
     
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  6. homernoy

    homernoy Limp Gawd

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    You make a lot of sense there o_O
     
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  7. Danny Dawg

    Danny Dawg [H]ard|Gawd

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    How about successful developers = game works right on day one vs. game makes tons of money and does not work at the time of purchase.
     
  8. dgz

    dgz [H]ardness Supreme

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    They already offer refunds. You're free to request one if the game you bought is broken. I was disgusted by Crytek's Hunt: Showdown. Horrible game, horrible performance, horrible everything. Asked for a refund, and got one. It works. No need to complicate things with more rules
     
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  9. Flogger23m

    Flogger23m [H]ardForum Junkie

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    Figured this day would come soon. Steam is loosing its edge. Once the center of all PC games when it came to digital distribution has now lost a lot of market share. You can play some of the most popular MP games and not use Steam. I am sure there are kids out there getting into PC gaming that haven't even tried Steam, so that nostalgia and centralized experience that Steam used to have is loosing ground with the younger generation. Think about it. If you play Overwatch, Rainbow Six Siege, Fortnite, Battlefield or Black Ops 4 you won't be using Steam. Exception being R6S if you purchased directly from Steam. I am sure Ubisoft and Rockstar will be the next devs to leave Steam entirely.
     
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  10. steakman1971

    steakman1971 2[H]4U

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    I'm a big fan of indie games - I typically play these the most. They are usually creative and more willing to take chances. I will say, without a platform like Steam or Gog, Indies would have a hard to finding an audience (except for the occasional Minecraft).
     
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  11. Full Otto

    Full Otto [H]Lite

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    Sorry if it hurts peoples feelings, but this makes sense. A big publisher is gonna sell a bunch of games anyways, but will have also leveraged it's own advertising and mindshare, not to mention other distro methods. With these, any cut is a good cut. As mentioned, this is an actual horse race these days.

    An indie house could essentially use Steam as it's sole advertising and distro method, requiring next to no investment other then making the game, while still potentially being very successful. If they go blockbuster, then they can keep more of it. Steam made it exponentially easier for an indie house to go mainstream, especially early on.

    This is a still a great deal for indies.
     
  12. Sycraft

    Sycraft [H]ardness Supreme

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    Problem is that other than the publisher run store fronts, none of them really are very popular for various reasons. So Steam still kinda is the only game in town. Also while 30% sounds like a lot, retail is more like 50% so publishers were plenty happy. It's in line with what other digital distribution takes as a cut too. Now to be fair, most other DD has things like, you know, customer service that Steam does not but still.

    We'll see what happens long term, I think eventually Steam's lock will be broken just because Valve is so lazy and doesn't want to work on improving the things that need improving. However until then, they can still charge a good bit.
     
  13. tviceman

    tviceman Limp Gawd

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    20% should be the normal cut across the board now, with it dropping to 10-15% after a certain sales revenue is met. 30% is ridiculous.

    If Valve has the foresight to keep future (massive) hits like Fortnite on their platform, they need to adjust their costs more than this. If they had been at 15-20% across the board, companies with a smaller library (like Epic and Bethesda) would have been less likely to create their own storefront and make their games exclusive.
     
  14. socK

    socK 2[H]4U

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    It's getting easier and easier to stand up infrastructure that's capable of eating the demand - and cheaper.

    30% is a fuckload. I can easily see why companies are looking elsewhere to be honest. Even 20% is a boatload and still probably not that hard to beat.
     
  15. lightsout

    lightsout Gawd

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    Dang didn't realize steam was rolling in dough like that.
     
  16. sirmonkey1985

    sirmonkey1985 [H]ard|DCer of the Month - July 2010

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    30% isn't that bad considering steam handles all the front end shit.. advertising, purchasing, download servers, etc. all that shit costs money.. doing it yourself you still pay that 30% in your own costs while also having to pay people to manage it. so it ends up being a wash one way or the other. there's a lot of things i don't like about steam but buying, download, and managing my games is insanely easier on steam then any other platform.
     
  17. tetris42

    tetris42 [H]ardness Supreme

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    To the best of my knowledge, the most "advertising" Steam does is let the algorithm display your game if it's related to a similar game on Steam. Let's not kid ourselves, Steam is a machine with minimal maintenance that prints money. Their overhead is about as low as possible. They've been taking a 30% cut of most of PC gaming for a decade and a half in a company with 360 employees. In 2011 Gabe claimed it's the most profitable company per employee in the United States. Sure, server costs and keeping the lights running cost something, but when that's perhaps 3% of your profits, sailing is pretty smooth.
     
  18. M76

    M76 [H]ardForum Junkie

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    It is laughable that many act as if steam is literally doing nothing for the cut they take. They provide every bit of distribution infrastructure, community hubs, workshop, streaming, and most of all free exposure. Indie devs are a huge beneficiary of steam, they would have no way to spend enough on advertising campaigns to get the exposure that steam provides. Sure big AAA publishers have the budget to finance all this on their own hence uplay and origin and such things. But the 30% deal off sales when you handle everything and the dev literally has to do nothing but submit his game on a form and then put his palms out for the money, is far from a bad deal, or ripoff as some describe it.
     
  19. M76

    M76 [H]ardForum Junkie

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    It doesn't matter how much the daily operating cost is of steam, but I doubt it is as low as you imagine it to be. Running thousands of servers maintaning the software and services is not cheap. But most importantly they created those algorithms that provide suggestions. I personally think they are crap, but if it sells games it sells games, there is no going around that.
     
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  20. tetris42

    tetris42 [H]ardness Supreme

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    The point is he was saying they're paying for advertising, as though that's the same thing as a giant AAA company spending half the budget of the game on marketing.

    And yes, no one knows the numbers. You say it's "not cheap", but you have to think comparatively. It's not cheap for you and I, but I doubt you're thinking on the scale they operate at. The latest estimate I've seen is they brought in 4.3 billion dollars for 2017, so let's go with that. How much do you suppose hosting costs? 100 million dollars? I would estimate less, but again, who knows. Maybe someone more familiar with hosting costs can chime in an estimate. So let's say it's $100 million for hosting. I have no ideas what the salaries are, but let's say 100k per person (obviously executive salaries would be much higher, but whatever). With 360 employees, that's 36 million a year. Now, let's add misc. development and maintenance costs. Another $100 million? I could be way over here, but who knows, I'm trying to be generous. Finally, we have taxes, let's say 20%, even though I imagine it's much lower than that with loopholes. Add that all up, and it leaves 3.2 billion dollars a year leftover.

    At 100 million dollars, that's less than 3% of their total income. I don't know about you, but if annual maintenance of something critical costs me 3% of my income, I consider that pretty cheap. I think the burden of proof is on you if you want to prove that their hosting costs are significantly more than 100 million a year.

    I'm not trying to argue Steam doesn't do anything and does nothing for developers and players, of course it does. I'm saying that have an INCREDIBLY profitable system with a MINIMUM of work considering the scale of their operations. To pretend otherwise is just fantasy. Here's some data for comparison:


    Wal Mart revenue: 485 billion
    Employees: 2,100,000

    Amazon revenue: 178 billion
    Employees: 613,000

    Apple revenue: 52.6 billion
    Employees: 132,000

    Electronic Arts revenue: 5.1 billion
    Employees: 9,300

    Steam revenue: (estimated) 4.3 billion
    Employees: 360

    Get some perspective of scale.
     
    Last edited: Dec 4, 2018
  21. M76

    M76 [H]ardForum Junkie

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    And the problem with that is?.......
    Their scale is nothing compared to walmart and amazon, or apple, it's not even comparable. They don't have warehouses and offices and stores around the globe that are necessary for handling physical goods.

    Besides your estimates are way off. Steam might have 360 direct employees, but its not them who maintain their services. I Doubt that number of people could handle the support requests alone.

    I don't have to prove anything, you're the one pulling numbers from thin air. I never mentioned any. Just said that 30% is a great deal for indie devs for not having to do anything for marketing and distribution.

    Plus you seem to be confusing revenue with profits. ONLY 30% of their revenue stays with them.
     
  22. Deathroned

    Deathroned Gawd

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    I disagree for example.

    Apple run,create and maintain their own OS, they design their own hardware. and sell their own hardware not to mention anything on the App Store is checked by an actual human.

    Sony and Xbox (same as apple own, curate, do qa tests, create their own OS, design Hardware etc)

    and people forget that 30% is charged per sale, so every time you purchase a game, Valve, Sony,Apple, Google take 30 percent, not to mention Epic taking an additional 5% of revenue at source(not after Steam, Sony etc tax) every 3 months.
     
  23. Darunion

    Darunion 2[H]4U

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