Epic Games, developer of games such as Fortnite, Gears of War, and Unreal Tournament, has announced plans to launch its own store for PC games, and it aims to court developers aggressively.
For better or worse, Valve’s Steam platform has pretty much been the go-to storefront for most gamers looking to buy PC games since its debut in September 2013. That may finally be about to change. Having made its name as a premier development studio and engine developer, Epic aims to shake things up by offering developers a much better share of the revenue pie.
Announced via the Epic Games Blog by studio founder Tim Sweeney, the Epic Games Store promises that all developers will receive 88% of revenue. This news comes just days after Valve announced changes to its Steam revenue sharing program to clearly benefit more successful titles. In an interview with Game Informer, Sweeney explains that Epic decided the typical 70/30 revenue split was unfair and outdated, and expects his company will still be able to make a decent amount of profit despite taking substantially less than Steam.
“The math is quite simple: we pay around 2.5 to 3.5 percent for payment processing for major payment methods, less than 1.5 percent for CDN costs (assuming all games are updated as often as Fortnite), and between 1 and 2 percent for variable operating and customer support costs. Fixed costs of developing and supporting the platform become negligible at a large scale. In our analysis, stores charging 30 percent are marking up their costs by 300 to 400 percent.”
In contrast, Steam has historically taken a 30 percent cut of revenue from games sold on its store. Valve recently announced a new tiered pricing scheme that sees developers that achieve over $10 million in total sales switch to a 75/25 revenue share, and developers that achieve over $50 million in sales switch to an 80/20 share. This move has proven to be unpopular with independent developers in particular, who feel their smaller, more experimental titles end up funding less ambitious, more mainstream games from larger studios.
“So excited to have Caves of Qud subsidize Red Dead Redemption 2,” said independent developer Brian Bucklew on Twitter. “I hope all of Valve’s customers are interested in having the tiny studios doing interesting things on razor-thin budgets paying for the next Fallout 76.”
Announcing the impending launch of a Steam competitor is one thing, but maintaining the service is another entirely, particularly as it grows. How well Epic handles the problems of scale that have dogged Steam over the years remains to be seen. The Half-Life developer has been accused of poor customer service, not doing enough to curate its catalog, fumbling programs such as Greenlight, a failure to handle review bombing, and much more.
Valve’s service has proven remarkably resilient, having seen off previous challengers fairly easily over the years, from Direct2Drive to the floundering Windows Store. Boutique alternatives have managed to find a niche: itch.io focuses primarily on indie titles and GOG pushes customer friendly DRM-free policies and games. Sweeney and his team hope the Epic Games Store will fare better than all of these.