
Valve creates new revenue sharing tiers to give big sellers a break - 2calazm
http://www.gamasutra.com/view/news/331922/Valve_creates_new_rev_share_tiers_to_give_big_sellers_a_break.php
======
PakG1
I actually am surprised that services like Steam, the Apple App Store, and
Google Play are able to command as high a margin as they do for sales
commission. I mean, it's obviously possible because it's reality, but it's
nonintuitive. I wonder if it will continue to be that way. For iOS, you don't
really have a way to install apps outside the app store without jailbreaking,
but you do for macOS, and I've seen a number of high-profile macOS titles
decide they're not going to sell on the App Store anymore. That's gotta damage
the moat somehow and thereby damage the App Store's ability to maintain its
commission margin (eventually?). I wonder what it would take to get that to
happen on the iOS side. So long as the iPhone remains a market leader, I guess
I don't see anything changing.

~~~
methodover
> I am surprised that ... are able to command as high a margin as they do for
> sales commission.

Yep. Me too. I’ve long thought that Steam charges way too much considering the
platform. There would seem to be tons of room for a competitor to undercut
Steam. I’m excited about Discord’s new store.

Revenue share is a killer for a business, especially as one as volatile as
computer games. Any game needs to be 25% better than it otherwise would have
been because of Steam’s revenue share. Does it really bring _that_ much to the
table? In 2018? Enough to justify their absolutely enormous cost?

~~~
tylerl
There's a GDC talk about this (up on YouTube, can't remember the title) about
the cost/difficulty going alone vs going through steam.

The tldr is that valve apparently knows exactly how much it costs you to run
this apparatus yourself, and the rev share reflects that reality. The numbers
are apparently really close.

The catch is that as you sell more units, the cost of the apparatus starts to
diminish as a percentage of revenue, so running your own marketplace starrs to
make sense when you get into the blockbuster territory.

This pricing update apparently takes that fact into account, which means that
when companies start running the numbers on their new game launch, the
justification for building their own marketplace starts to go away.

~~~
eropple
I'm pretty sure it's not the talk you're thinking of, but Jeff Vogel (who has
been mostly-successfully making indie games consistently since 1995) mentions
it in this GDC vault talk:
[https://www.youtube.com/watch?v=stxVBJem3Rs](https://www.youtube.com/watch?v=stxVBJem3Rs)

They were able to stop paying a third employee when they went to Steam. That's
a lot of value to the business.

~~~
cheez
> They were able to stop paying a third employee when they went to Steam.
> That's a lot of value to the business.

They were able to _stop_ paying? Doesn't that mean they make less money?

~~~
Retric
Revenue is fairly useless it’s profit that you care about. Having less
employees also means less effort managing them.

~~~
cheez
Ah I see.

~~~
eropple
They also made more money, even with Steam's cut.

People are expensive. (Hence the whole "oncoming economic doom" thing.)

------
jamp897
Many larger studios are working on self publishing and have projects in the
works. The percent that Valve takes even at 20% is still too high, but the
bigger issues is that Valve locks up your users so when you make your next
game you have to reacquire them, ownership of ones users is the key due to
this issue. We’ll see how they fair over the coming years but this does look
like they’re starting to wake up a bit to how unhappy execs have been with
Steam stagnating and reaping 30% still.

~~~
Praxish
As an entrepreneur in this space, I'd be okay with 20%. The issue is the
current thresholds. I'd want it to be 20% over $1M not $50M. Around a million
it starts being worth it to handle credit card processing, chargebacks etc.

~~~
jamp897
As there’s more competition from studios entering the publishing space you
should be able to get a better deal, with better and more current tech. The up
side is Steam gives you visibility to a large player base with new publishers
won’t have on day one, but it’s coming.

------
acomjean
This makes sense. the share drops to 25% after 10 million in sales. and more
after. One would imagine that there is some fixed cost for adding new titles
and maintaining steam store. After a certain amount of sales the cost per
title is just bandwidth so steam is making more per game anyway.

Its also a hedge to prevent every large game seller from setting up their own
store. Even if you are large its cheaper to use steam.

~~~
jsheard
> Its also a hedge to prevent every large game seller from setting up their
> own store.

That ship has already sailed - EA has Origin, Ubisoft has Uplay,
Activision/Blizzard has Battle.net, Microsoft has the Windows store, and
Bethesda and Epic have their own launchers.

Nearly every major publisher has already made the investment to develop their
own store and digital distribution infrastructure, so they have little reason
to pay the Steam tax now.

~~~
ksec
Are any of those you mentioned popular with Gamers though? I only ever hear
Steam in gaming.

What do you mean by own launchers? Surely not a Store right?

Is Battle.Net a "Store"?

~~~
maxsilver
> Is Battle.Net a "Store"?

Yes? I don't see how anyone could claim otherwise.

Battle.net is a store, because it sells games you can purchase, including
expansion pack sales, microtransaction sales, etc.

~~~
chii
At best you can classify it as a specialty "store" where you can get only 1
brand of item.

Steam is a store in the true sense - it stocks stuff from multiple devs. And
anyone can post their own game to the shelves.

------
seanalltogether
Some of the big publishers have been requiring user accounts on all their AAA
games sold through steam, so I think Valve knows it won't take much for these
guys to switch to exclusive sales through their own platforms if Steam becomes
too costly.

~~~
scoot_718
Is that what's behind that crap? Too many games require some fucking account I
don't care about, when it should be linked to steam.

~~~
jamp897
Yes, it’s also because platforms control what you can expirence, and if they
feel it competes with their platform in someway they disallow it. So studios
aren’t going to tolerate that going forward.

------
beerlord
I feel uncomfortable that smaller developers will be less profitable because
they... don't have as much negotiating power?

Valve is being very Walmart-esque with this move.

Already game developers are the lowest paid workers in the IT industry - and a
lot of it has to do with the huge revenue shares ('platform taxes') charged by
the monopoly platform holders.

I'm not arguing against any change, it just seems spiteful that Valve are
sticking it to the little guys who can't go anywhere else. If those tiers
($10m and $50m to reach 25% and 20% respectively) had a zero removed from
them, I would be more understanding.

This could have been a great chance to improve Steam overall, by reducing the
commissions for all developers (in order to fend off a future Epic store - one
undoubtedly tied into UE4, and probably with a 12% commission, based on
statements from Tim Sweeney), and increasing the quality on the low-end
slightly with a Steam Direct fee increase from $100 to $500.

~~~
philjohn
On the other hand - the big publishers need Valve less, so from a purely
business perspective it makes a ton of sense to keep them on the platform,
which is the biggest storefront for purchasing games.

Yes, smaller developers have to pay more, but they're getting a heck of a lot
of exposure for that take, without having to spend big on traditional
advertising like the large publishers have to.

~~~
beerlord
That is unfortunately not correct. A large amount of advertising and PR is
very necessary to receive any attention for a launch on Steam.

Unfortunately a mere 'launch' on Steam has been devalued, by Valve allowing
anyone with $100 to launch on the platform (and the majority of the launches
on Steam are very low quality as a result).

If you want to make a middle class income from launching games on Steam, you
will need to become very familiar with online advertising. Have a look at the
Positech blog for details.

Indie devs are now realising why the big studios spend 30% of their budgets on
marketing...

Of course, it all gets a bit easier once you have an existing profile, an
existing fan base, etc.

~~~
zeroname
It's not just lack of marketing, it's the fact that there are now far more
games, but gamers have neither more money nor time to compensate.

There are too many game developers, it's as simple as that. Too many
millennials don't want the regular old "grown up" jobs anymore, they want to
be creatives or artists and the market just can't soak them all up.

If you think it's hard as a game developer, try living off painting or
sculpture or music or literature. The vast majority never get there.
Meanwhile, a game programmer at least has ordinary programming jobs to fall
back on - if they can stomach it.

~~~
slfnflctd
I don't know how they do it, honestly. Back in the day, when things were
simpler, being a game dev sounded pretty cool. Now? No thank you. Lower wages,
longer hours, much more difficult work, and 'fans' who continuously insult you
in the worst possible ways no matter what you do... sounds like a nightmare.
If I'm going to go the creative route I think I'd be happier on the sidewalk
with a guitar.

Career-wise, I would _much_ rather help a middle manager figure out how to
best crunch the data on their quarterly reports. It can actually be more
interesting than it sounds on the surface, and if you're competent everyone's
happy at the end.

~~~
beerlord
An advantage the Gaming Industry holds is that it is completely global.

The salaries for game artists and programmers in Eastern Europe are actually
quite high, by local standards. And when you consider the very low cost of
living in those countries, they are even appealing at a global level.

Working for a games studio in those countries, particularly if key management
are Westerners or the local studio is a branch of a Western company, also
gives a professional and modern work environment, whereas many older (non-
Gaming) companies in Eastern Europe still have old-fashioned work styles
(managers holding less respect for workers, for example) which are somewhat a
legacy of the Communist era.

Los Angeles is 147% more expensive to live in than Wroclaw (4th biggest city
in Poland) for example. [https://www.expatistan.com/cost-of-
living/comparison/wroclaw...](https://www.expatistan.com/cost-of-
living/comparison/wroclaw/los-angeles)

Typical Unity Developer salaries in these mid-sized Polish cities are about
$35,000 annually, which enables an excellent upper-middle-class lifestyle.
Plus, because the cost base in Eastern Europe is so low, if the game your
company makes is very successful, you stand to receive a very large bonus.

------
newnewpdro
It seems obvious to me that Valve should have a micro tier for the small indie
space, by effectively making everyone else subsidize them. Something like 5%
until crossing $30,000 in revenue.

This can be a life-changing difference for individuals couchsurf-hacking while
trying to break into the game industry on their own; 28.5k vs. 21k. I highly
doubt this would move the needle at all on Valve's end.

Do they already have anything like this or are the little guys paying the ~30%
I see being thrown around?

------
ksec
So what exactly is "Valve" now without Steam? They don't have new games any
more ( And none of the the "newer" ones were anywhere as good as CS ). They
don't improve or compete in Game Engine any more, which they did in the Golden
Era between Unreal, DOOM, and Source.

What have they got left? Steam OS and Gaming Machine got no where. HTC Vive
doesn't look like they can compete with Sony or Oculus.

~~~
doyoulikeworms
Valve is still a quite an admirable game studio. Not only do their top games
CS:GO and Dota 2 have large and healthy player bases, but they also have large
and vibrant competitive scenes.

I don’t compare Valve to the likes of Nintendo or Bethesda anymore wrt game
development, but instead to companies like Riot and Blizzard. These studios
revolve around franchises-as-services and don’t release new IP often. Their
core games are pillars of the competitive, casual, and streaming games scenes.

I do miss the days of more frequent releases, though. Hooray for Artifact!

~~~
ksec
> but instead to companies like Riot and Blizzard.

But both Riot and Blizzard is like 10 times larger than Valve. And has games
and franchise that is sustainable business if the worst happens in the next 10
years. Does having CS:Go and DOTA only enough to feed them? I mean even DOTA 2
is like 5 years ago already. And Artifact doesn't seems like a hit at all.

------
mentos
As an indie dev this is great news for me. Hoping Valve may come around and
just drop the share to 20% for everyone eventually and then I won't have to
forgo a salary to keep my 4 person studio alive.

~~~
badsectoracula
FWIW you may also be interested in selling directly from your site[0] since
you can give away as low as 5%.

[0] [https://www.positech.co.uk/cliffsblog/2018/11/23/selling-
gam...](https://www.positech.co.uk/cliffsblog/2018/11/23/selling-games-direct-
from-your-website-in-2018/)

~~~
ehsankia
I'd like to see stats, but historically, a game being on Steam brings enough
extra sales to make up the steam cut. Now that Steam is overloaded with small
games, that may no longer be true, but it's still worth doing a fair
comparison.

------
franknine
This is definitely going for big AAA publishers. As Activision moved their
latest Call of Duty from Steam to Battle.net, there are only Take-Two and
Square Enix who haven't rolled their PC store.

~~~
Crosseye_Jack
Take-Two do have their own store iirc or at least rockstar does. What they
don’t have is an app where you can easily and simply download and install any
game tied to your account.

I have GTAV from them directly and it can be a chore remembering where the
actual download button is for the installer on their site.

EDIT: For the shits and giggles of it I tried to stumble across the installer
for gtav on rockstargames.com - This isn't my first time But I always forget
because I don't actually install the game that often (once its installed it
normally stays installed until I nuke my system).

First I thought, I'll make sure I'm logged in so I did that, There is a hover
menu over my avatar now So I check that and follow profile and settings as
none of the others seem to be linked to "let me download my game". But nothing
in there links to to downloads.

OK return to rockstargames.com because there was a downloads button on the
header banner. Click... click on gtav and it prompts me for who I want to by
the game from. so I select rockstar warehouse because that's who I brought the
game from.

It now prompts me to buy the game. Oh but I am no longer signed in. Arrr
differnt domain name, that will be why. So I sign in, atleast this time I
don't have to do a recaptcha to sign in as it did manage to figure out i'm
signed in from rockstargames.com. Ok, it bounces me back to the warehouse home
page instead of the page I was just at.

I can not click on my username, So I try clicking Digital Downloads, Select
"Grand Theft Auto V" as I'm sure that the one of the 6 SKU's they have for the
digital copy of the game. And its prompting me to purchase the same.

So I scroll all the way to the bottom and select "Digital Downloads" under
shopping support.

> How do I download my purchase? > You can download by either clicking the
> Download button on the Order Details page or by right-clicking on the
> Download button and clicking Save Target As in Microsoft Internet Explorer
> or Save Link As in Mozilla Firefox. Do not rename the download file as this
> can cause installation problems.

Ok so I do that, There is my order but no download buitton. Ok... Lets check
that support doc again.

>I want to re-download my purchase, but the Download button is gone. >There
are a couple reasons why you wouldn't see a button (where there previously was
one) to download your purchase. If the order is older than 30 days, then the
download period has expired.

Well that's frustrating, BUT I know it can be done but I've done it a few
times in the past.

Fuck it, I'll do what I should of done in the first place (apart from "should
of brought it on stream) I'll ask Google.
[http://lmgtfy.com/?q=How+to+I+redownload+gtav+on+pc](http://lmgtfy.com/?q=How+to+I+redownload+gtav+on+pc)

1st link is quora, 2nd is rockstar support, Well I'll give rockstar a final
chance before relying on 3rd parties to help me and click the
support.rockstargames.com link.

>...or download from the GTAV PC Social Club Activation page.

Clicks the link, BOOM there is my download. But wait, I thought I clicked the
social club before. Clicks my avatar, OH NOW THERES A BIG BUTTON SAYING "Game
Downloads" which isn't present when you click on your avatar from
rockstargames.com

------
stillmotion
This should link to the original source:
[https://steamcommunity.com/groups/steamworks#announcements/d...](https://steamcommunity.com/groups/steamworks#announcements/detail/1697191267930157838)

------
georgeecollins
Part of the reason why this is happening is because Twitch and Discord are
going to compete for this market. This is good news for game developers and I
am glad Steam is doing it.

~~~
spir
Came here to say this. 15 years of Steam monopoly is coming to, well not an
end, but a transition point. Great news for game devs!

------
simplysimple
So Valve is giving breaks to the big developers/publishers that don't even
need them?

~~~
zyx321
Maybe not need them, but want them. EA and Ubisoft both launched their own
competing platforms, so they have a lot of leverage to negotiate with.

~~~
simplysimple
Then they should lower rates across the board. There used to be a time when
"just being on Steam" justified the high cost to smaller developers, but the
market is over saturated now because they don't curate anymore that it isn't
the case.

~~~
icebraining
So where would a small developer launch nowadays? As far as I can tell,
they're still on Steam, so they disagree with you that the cost is not
justified.

~~~
simplysimple
Sony has been friendly to indies during the PS4 generation. Nintendo was
especially good for indies in 2017 and is practically giving away development
kits. Even EA is becoming increasingly friendlier to indies on their Origin
platform.

Steam has brand recognition for developers, but that is changing with
competition.

------
adamrezich
I don't know if anyone's noticed the unprecedented price-slashing that's been
happening in AAA games this year but I think we may be in for another AAA game
crash. For indies I don't think it's much better unless you're one of the Big
Names in that space.

(Incidentally, getting into making games professionally through any means
other than self-funding seems basically impossible at the moment.)

Any other perspectives on this?

~~~
gnarbarian
It's not across the board. Red dead redemption 2 is a huge hit. The big
launches which are failing and getting lots of press (fallout 76, and
battlefield V) are doing so because of anticonsumer practices. In the case of
fallout 76, the game is so buggy nobody wants to play it. Plus, launching
fallout 4 after people were wrapping up Witcher 3 really put things into
perspective as to how far behind Bethesda is compared to CD project red. Side
by side fallout 4 was garbage.

As for Battlefield V. I've been a die-hard battlefield fan since BF 1942, I
played the BFV demo and it proved to me that they are continuing to move
backwards. Pay to win microtransactions and even less destructible
environments show that they are dead set on destroying the mechanics which
make battlefield fun and alienating their core customers. Perhaps they are
doing this in a misguided attempt to capture some of the fortnite/call of duty
market but instead they have sacrificed their core customers in an attempt to
entice people away from games they are perfectly happy with. Then they top it
off by sanctimoniously insulting their customers and telling us not to buy it
if we don't like their changes.

~~~
FooHentai
>In the case of fallout 76, the game is so buggy nobody wants to play it.

Buggy, bland, and hamstrung by silly design decisions:

\- No non-player characters transformed into 'we'll use robots to awkwardly
get around our self-imposed rule'

\- 'Let's use our time-stopping VATS system in a multiplayer environment where
you can't pause time, I'm sure that will work well'

------
Zelmor
Valve's cuts are fine. I remember the times when developers were glad if they
got 20-30% of the profits in general, with publisher deals starting at 70%
cuts for IP-first game releases, and way higher if it was your first game.
This after you pitched the game with a tech demo running, of course.

Steam is a blessing on digital distribution, and the most competent platform
to date, albeit it has its problems.

~~~
qasdf
A friend of mine released a game that sold around a million copies in the late
90s or early 2000s sometime and had a deal like that. Except the publisher
claimed that after all the distribution and physical costs the profit of the
game was 0 and so he never got any money from his profit sharing agreement.
Steam and online distribution in general is a godsend.

~~~
maxxxxx
[https://en.wikipedia.org/wiki/Hollywood_accounting](https://en.wikipedia.org/wiki/Hollywood_accounting)

------
Zren
* First $10M = $3M Valve + $7M GameDev

* Next $40M = $10M Valve + $30M GameDev

* Next $50M = $10M Valve + $40M GameDev

Assuming your game is expected to generate $50M in revenue, is giving up $13M
(26% of revenue) for bandwidth + servers + store handling credit card info +
credit card fees + technicians + support staff worth it over rolling your own?
Or $23M if it's expected to make $100M?

~~~
spatz
> for bandwidth + servers + store handling credit card info + credit card fees
> + technicians + support staff

You're forgetting exposure and huge player base. That's got to add _some_
revenue...

~~~
FooHentai
Not so much for the games that are hitting those revenue levels, as they
already have mind share far greater than you get from being on Steam.

It's a game changer for smaller and unknown developers to be findable on the
steam store. Once you're a battlefield/witcher/fallout etc, you just don't
need it.

------
shmerl
They should have given even a bigger cut to those developers who release Linux
versions. It would be a good incentive to push more of them releasing for
Linux.

------
campercoder
Thats great.. charge big companies less. :(

