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Epic are doing a great job improving fairness in the gaming industry, and the economic conditions for developers. I'm looking forward to their Epic Store opening up to more (high quality) Indie games.

The % deal they are offering is a good start but I'm not sure buying exclusivity of game releases is good for "fairness in the gaming industry."

I am interested in hearing other opinions, but I personally do not care about exclusivity. I can download any store front application (Steam, Epic, GoG, Uplay, etc) for free, so the only inconvenience is having another app. Compare this to the days of console exclusives, and it's almost a non-issue. Outside of couch coop, I have no familiarity with Xbox exclusives like Gears or Halo because I could never afford more then one console until this current generation.

My first experience with the Epic store was to get Satisfactory. And while it was annoying not being able to have it on steam, it really became a non-issue since everyone I play with uses Discord. Again, I am curious to hear other opinions on this because I really do not see the big deal in my experience.

> Compare this to the days of console exclusives, and it's almost a non-issue.

That's the thing though, console exclusives at least saved developers the resources needed to port to another console. Especially in ye olden days, that was a non-trivial cost. The storefront exclusivity on PCs is completely artificial.

But also, yeah, my computer is full of enough bloated useless-ware. At least GoG and Itch don't make me use a client.

It's not artificial, it's financial.

I was against Epic's aggressive moves, until I realized just how much cash they're injecting into developers. In the video game industry developers are the ones that bring the most value to customers.

Valve has been a dragon hoarding its gold. The services they provide are better than Epic, but they really don't reflect their near-monopoly position for over a decade. 30% out of the majority of PC game sales, and what do we have to show for it? Valve doesn't even seem willing to compete and lower its cut.

In the end going with Epic will guarantee the studio can make it to the next game. That's worth downloading another client. That and the free games.

> 30% out of the majority of PC game sales, and what do we have to show for it?

Steam links, Steam controllers, Steam on Linux, Proton, and the OpenVR SDK to name a few. Sure several of those things were failures, but it isn't like they aren't trying.

> In the video game industry developers are the ones that bring the most value to customers.

That's some trickle-down theory right there. I'm not convinced that what's good for developers is necessarily good for gamers or the gaming market. Case in point: loot boxes.

It's not trickle-down theory. It's actual redistribution of wealth from publishers to developers. If a developer you like cuts a deal with Epic and ensures their own existence for one more game, then you should be very happy.

Studio closures are common, game services shut down, mass layoffs, and project cancellations. An exclusivity deal is much better than a publisher going in and changing monetization or game design to fit their strategy.

> If a developer you like cuts a deal with Epic and ensures their own existence for one more game, then you should be very happy.

Where do you get off telling me how I should feel? The way I feel is that exclusivity that has nothing to do with technical constraints and everything to do with corporate sumo wrestling is not and never will be good for gaming as a whole.

Not you personally. Rhetorical you, the gamer.

Exclusivity can be good if it results in more games being developed, at a better quality, cheaper. Do you disagree with that?

I wouldn't say it's completely artificial. Steam offers APIs for things like cloud saving, workshop, achievements, cards, etc. and any games that want to make use of those things pays dev costs to integrate it EXCLUSIVELY for the Steam version. I'm sure the Epic Games Store offers something similar and more dev costs would be associated there to integrate. And so on.

Neither modern console nor PC game store exclusives are "completely artificial" when those contracts provide an influx of cash for the developer or studio.

Gamedev isn't cheap, especially for indies and smaller studios.

I'm legitimately surprised to see so much good will towards Epic and Tim Sweeney here.

I'm happy about their revenue share and was excited when they got started - until it became obvious that their tactics didn't align with their PR.

Yeah, their revenue share isn't about helping developers, it's about hurting Valve. When Epic pays a publisher for exclusivity, a lot of the time it's actually "sell it anywhere except Steam". Their deals still allow the developers to sell the game on stores that take the same 30% cut that Steam does. Plus there's the issue of a game being developed with Linux support, then Epic pays the publisher for exclusivity and the Linux version goes away because the EGS is Windows only.

EGS supports Windows & Mac. This link is directly from their home page https://launcher-public-service-prod06.ol.epicgames.com/laun...

A few exclusives is more than worth breaking Valve's near-monopoly and 30% toll on game revenue. That 30% is coming straight out of gamers' pockets and HN usually hates middlemen; it's baffling to see so many people in support of Valve.

30% became the industry standard not just for video games for a reason. It costs money to seamlessly do business across n countries, and it's not like Valve does nothing else to try and earn that fee either.

Epic's play is to try and see if being a better looking deal for game devs will translate to being better for gamers or other groups (like linux users, open source advocates) too. We'll see. Valve has already demonstrated their goodwill towards all the groups multiple times, even if it's motivated by keeping their platform dominance.

> 30% became the industry standard not just for video games for a reason.

Yeah, it became the industry standard because it rakes in mind-blowingly huge revenue for the app store owner, e.g. https://www.cultofmac.com/601492/app-store-google-play-reven.... From the article: "It’s no wonder Services — which includes App Store revenue — has become an increasingly important business for Apple as hardware sales have slowed.".

While you're correct that it costs money to run Steam, it's not _that_ much money.

There are probably economies of scale, sure, which is part of why Epic can get away with a lower fee for now. But it's also just business. They know how much it costs without economies of scale, and that sets a floor.

https://youtube.com/watch?v=stxVBJem3Rs Here's a talk from a very old indie company, there's one section talking about how they existed pre-Steam (and other stores they use since Steam's not exclusive) and appreciate what it's enabled.

With the right time : https://youtu.be/stxVBJem3Rs?t=1564

The only reason 30% is the industry standard is because network effects and walled gardens make competition very difficult. The cost to valve, Apple, and Google aren't anywhere close to that, which in an efficient market means that the price should go down as competitors enter the space.

Steam isn't so much better than the competition that no one can compete with them--they just got into the market at the right time and network effects have taken over.

What are the costs close to, and what are the costs of distribution if you did it yourself? Feel free to break it down into cost of business across n countries, cost of storage and bandwidth, some bare-minimum listing fee somewhere to at least enable theoretical discovery, and ignore all the other services the platforms provide.

I mentioned probable economies of scale in a cousin comment, but I don't think they offer all that much. Do you have a % in mind that you intuitively think could be knocked off from the stores of Valve, GOG, Google, Apple, Microsoft, Salesforce App Exchange, and Amazon Appstore, all taking around 30% before you get into the fine print?

The costs aren't 30%.

Assume a $50 game. 100,000 sales. 5 gigs.

Storage and bandwidth = $28,000 (per Amazon's calculator) Cost of doing business in N countries = use paypal = 2.9%+0.30/sale = approximately $1.75/sale = $175,000

Costs = $203,000 Revenue = $5,000,000 Ratio = 4.1%

So yeah, Valve is not the shining knight here and that 30% fee is unjustifiable. Even Epic's 12% share is still very much profitable for Epic.

The 30% fee is also nowhere comparable to wholesale pricing schema of the retail model (effectively a 40-60% fee), since that involved the sale of physical copies of goods, and the retailers had to deal with issues like shrinkage and the risk of unsold inventory.

I don't have any numbers, but I would not expect the median sale price to be anywhere near $50. I'd expect there to be more sales of <$30 games, as a percentage of revenue, than >$30 games. And the cost of distribution goes up relative to the cost of the game as the sale price goes down.

Assuming the sale price of the game in the OP's example was $10, distribution still cost less than 3%, and paypal goes up very slightly because of the $0.30 base charge, but the main fee is percentage based so it doesn't change. So even for a $10 game we're looking at less than 9% in total.

This example is also using s3 retail pricing and paypal retail pricing, which already factors in profits for Amazon and Paypal.

None of the big marketplace's costs are anywhere near 30%.

It became and Industry standard because Apple is Greedy as fuck, not because it is hard to make a store

I hate Epic for their Exclusivity, but lets not pretend that 30% Fee is nothing more than a money grab by Apple, Google, Valve and the rest of these platforms

Originally, Steam's 30% cut was a huge windfall for developers (retail stores could take 60%+). But I won't harp on that, just a historical note for why people (including developers) might still like the (existing) middlemen.

The 30% figure is a bit deceiving. If you sell a lot on Steam, you can get a better cut from Valve, but you don't even need to sell a single copy to get a 100% cut - Valve charges nothing for Steam key generation. You could sell keys on your own website and only pay payment processing fees, or get a decent cut from Humble, GMG, etc and not have to manage a storefront. One-third of all Steam game registrations are key activations [0], so this isn't some insignificant revenue stream.

What HN gets annoyed with is exclusivity and lies. Valve never required exclusivity and did not try to become a monopoly (you could sell on GOG, Origin, and any other storefront alongside Steam if you wanted), they just sucked less than the competition (GFWL et al) and developed consumer loyalty through their sales.

Valve is far from perfect, but they're decent and aren't anti-consumer, so when Tim Sweeney starts handing out $2 million for exclusives [1] to undermine everyone else and lies through his teeth on Twitter, people get mad. Epic doesn't want fair competition or they'd focus on making a much better launcher and sell their platform on its merits rather than its exclusives. Tim doesn't care about introducing competition, because it already exists (GOG, Origin, UPlay, etc), and people are still happy to stick with Valve.

>That 30% is coming straight out of gamers' pockets

This implies gamers care about the cut like it's a tax, and that if Valve lowered their cut, games on Steam would be cheaper. I did a quick check and saw the new Watch Dogs: Legion can be preordered on EGS for $59.99. Logically speaking, if the 12% cut is priced at $60, buying from Ubisoft directly (where there's a 0% cut to EGS) should be even cheaper, but nope, it's the same price. The lower cut translates to more profits, and executives won't lower prices just because they're getting more money. The reason for this is that video games are intellectual property, not commodity goods where people can directly compare prices for equivalent products (that is, while I can pick and choose a generic paper towel brand over Bounty and get similar utility for less money, choosing Need for Speed over Forza will result in a very different experience, such that you can't really compare games on price).

Given that Tim wants to force everyone to use his crappy launcher with no intention of Linux support, I can see why HN would rally around Valve. Middlemen are necessary for distribution, server hosting, and dealing with scammers trying to chargeback thousands of transactions, so we might as well have a company that isn't actively hostile to consumers doing it. Valve could lower their cut, but it would do nothing unless they stooped to Tim's level and started paying for exclusives, and Gabe has made it clear he wants PC gaming to remain an open platform, making paid exclusives unlikely. Doing so would result in a race to the bottom, and Tim knows that although Epic has tons of VC money to fund such a race with, Valve's refusal to take VC funds over the years would result in them losing.

[0]: https://twitter.com/Mortiel/status/1120357602305560577

[1]: https://www.pcgamer.com/phoenix-points-epic-store-exclusivit...

Your reply on "coming straight out of gamers' pockets" reminded me of something. I wonder if there's an official term in economics for it. But it comes up when people discuss levying new taxes on various product categories (we might consider it in this thread as Epic raising their fee back up to an industry standard) and a counterargument would go something like "companies will just pass the cost through to the consumer". Except that's not what happens, what happens is the company just has to eat it and try to survive. The market has already priced the good and has reached an equilibrium. If a company could get away with raising the price to a new value, and even after accounting for a decrease in sales still end up with the same or higher profit within a static time frame, they would have already done it.

One can also look at the possibilities by modeling more than just the $60 game in isolation. Include the cost, it took $X to create, and each $60 sale chips away at $X by some $Y so that after enough sales over some time window breakeven is reached (and profit after that). A new tax means that $Y becomes smaller, so you need more sales than before to reach breakeven within the same time. Except you won't get more sales than before, because the price is the same. You have to eat the tax. You could try raising the price to say $70 or whatever is needed so that $Y remains the same, and now you only need the same number of sales as before, let the customers eat it. Except you won't get the same number of sales as before, because the increase in the product's price will result in a decrease in customer demand, you'll have fewer sales than before within the same time frame. Compared to the difference with $X, it's still the company who has eaten the tax and has to deal with its consequences on their continued existence.

> Given that Tim wants to force everyone to use his crappy launcher

This is a pretty wild accusation to make with no lead-up or follow-through.

The store does not have a shopping cart feature, and started flagging people for fraud for buying multiple games in a row during a huge sale

That's a problem with their anti-fraud not a problem with missing a shopping cart. And that's probably been fixed.

iTunes, Apple App Store, Google Play Store, even Amazon Kindle book store, all are missing carts. Because a one-click buy is way easier to navigate than adding to cart, going to cart, and then finally checking out.

Does epic have one click buy? I also don't agree that one click buy is better for the consumer, as I like to see all the money I'm spending when buying multiple games, but that's opinion of course.

Even if everything you're saying here is 100% true, I don't see how it would support the accusation that Tim wants to force everyone to use his launcher, which is what I quoted and took issue with. Can you explain how the lack of a shopping cart and some mistaken bans are meant to prove the accusation true?

What I said does not support the that accusation. Are you saying a business does not want to own 100% of the market? Are you disagreeing with the "force" verbiage?

Yes, I was disagreeing with the thing I quoted. Given that saltminer was contrasting Tim's desire to "force everyone" to use his launcher with Valve's wishes for the world, I don't think it was uncharitable to read it as an accusation of something more nefarious than run-of-the-mill capitalism.

You get a better cut if your revanue for a game is above a million $ or something. For majority of devs out there the cut is 30%

They are generous with giving away steam keys, I agree with that. However the alternative for them is people selling exe on their websites instead of the steam key and losing potential customers over it. Also giving away free keys like that allows them to force devs keep the price same as steam prices

I agree with their stance that exclusives are the only way to break the hold Steam has on the market.

Yes, it's the only way when your product is objectively worse than Steam in practically every way, so the only way to get anyone to use it is to force them.

It's not a good approach to competition though, and only hurts users instead of motivating innovation. I agree that Steam could use some competition, but Epic isn't actually competing with them, they're just forcibly buying their way into the market.

I think it's quite possibly the only way regardless of how your product compares to Steam. Steam has huge platform lock-in as well as other inherent advantages as an incumbent monopoly. Your platform can be better in every way and people will still use Steam because that's where all their games are and where all their friends are. The history of computing is full of better products that failed to beat lock-in. See, for example, the insane lengths we've gone to keep computers compatible with the 8086 instruction set.

People also ignore that Steam built itself up on exclusives too. Heck, Valve bought Turtle Rock Software a few months before Left 4 Dead's release to get an exclusive lock on the Left 4 Dead franchise in perpetuity, then froze the original developers out. But somehow gamers are more scandalized by Epic paying developers to release on Epic's platform a few months before Steam, despite that being less predatory in every possible way.

Is steam really that great? I say this as someone who plays many hours of games.

I think some things they do well are (which are admittedly important things):

* reliability * security * fast downloads * consistent achievements between games

But I think they're lagging others (mainly discord) in chat and social. Their voice quality is comparatively horrible. They don't really have a good space for a group to have a server like discord does, which really helps with cohesion. So while I definitely don't think epic is killing it in any of these areas, I don't think steam has that much going for it outside their core competency.

> Is steam really that great?

Yes. Yes it is. Steam built the online games distribution market from basically nothing to where it is today. They helped usher in the indie game explosion, and gave players unprecedented tools for finding and assessing games. Not to mention the normalization of high-discount sales.

Oh yeah, and also Valve went ahead and made Linux gaming a more realistic proposition than it has ever been in history.

I agree that steam's existence has done wonders for gaming, and I'm also happy with their work on linux gaming (and never mind some cheap sale games)

But that doesn't mean that steam today is the best experience for gaming, and I would probably go so far as to argue that their hold on gaming is harmful to the industry, the largest issue imo being their large take of sales.

I disagree with pretty much everything you've said. Steam is the best experience for PC gaming I know of. It provides discovery tools, cloud saves, forums, reviews, gifting, a shopping cart (Epic still doesn't have one), and is just as happy to promote Nobody Studio's latest interactive visual novel as it is BigCo's annual AAA Call of World of Battlefield. Their "large" take is pretty standard for an online storefront and they provide huge value for it. In fact, if you don't want that value you're free to sell Steam keys to your game on any store you want with Valve receiving no cut at all.

Steam is where it is today because it first earned, and then kept, gamer trust. All the anti-Valve propaganda out there the past few years doesn't change that.

I would argue that most consumers act as follows, based on anecdotal evidence from myself and friends, when they have some game that they want to buy. (so distinct from impulse buys that they see)

If you're buying the game to play with someone, you buy it on whatever platform the other person has it on.

Otherwise, you look at whatever platform you spend the most time on. If it's available there and the price is "reasonable" for you, then you buy it there. End of story. I don't believe that most people actively search out a new platform.

Otherwise, if it's not available or you think you can get it for lower cost elsewhere, then you go to the next store you think is likely to have it or have it cheaper.

Given that framework, it doesn't really matter how good a platform is for a consumer outside of being able to buy a certain game. The main factors for that platform are:

1. How many people are on it. and 2. How wide the selection on the platform is.

So I would argue that not only does the platform compete for users on 1 (which I've argued is mostly based on 2 and pricing), but also for developers on 2. I think steam's behavior with their features is mostly oriented towards making the platform attractive to developers, and Epic is offering exclusives and $$$ to draw developers in.

As to whether Epic's exclusives are good for that gaming community, you can argue that they will allow for an ecosystem of epic subsidized developers, and lead to more competition from steam for holding developers.

IMHO it's not that Steam is that great, but rather than many of the major competitors have been quite bad.

Also, for a consumer there's a big convenience advantage to having a single store - from UX perspective (but probably not from the wider market leverage perspective, tragedy of commons yadda yadda) I'd very, very much prefer using a single service that's good enough to having to use three or more separate places that each individually are somehow better but each doesn't carry all the content that I want. The same applies to most other media - movies/shows, music, books.

IMHO the only way to get competitiveness would be to ensure that exclusivity deals are impossible/illegal, so that you might have multiple services each providing all content but competing on other qualities.

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