Experienced Points: Why Steam Can’t Meet Epic’s Price Challenge

By Shamus Posted Wednesday May 8, 2019

Filed under: Column 93 comments

In my column this week, I circle back and talk about the Epic vs. Valve thing we discussed on the podcast a couple of weeks ago. For years I’ve wanted someone to come in and really stand up to Valve and give them a proper run for their money. Epic is finally doing it, and their approach is so frustrating that I just can’t cheer for them.

During my research for this column I ran into this gem. That’s apparently the feature roadmap for the Epic Games Store. It is simultaneously really ambitious and yet much too slow. If they keep this schedule, then the EGS team is going to be rolling out features at a really impressive rate. At the same time, I can’t believe we have to wait over half a year for friggin’ SHOPPING CARTS, and gifting is probably ~1 year away.

Like I’ve said in the past, I think Epic would be on much better footing if they’d just rolled out some of these features before they started with exclusives. Or, they could have taken what they paid for exclusives and used it to buy the rights to give away N copies on the EGS. While some people are opposed to the exclusives on principle, others would be willing to tolerate it if the platform itself wasn’t so barebones. Likewise, people who show up for a free copy of a game are less likely to complain about missing features because “Hey, you can’t complain about free things” is a common mindsetNot for me, though. I’ll complain about anything..

In any case, this is going to be a long process. Epic is clearly here for a fight and I don’t see them giving up anytime soon. It’s really hard to predict what will happen over the next couple of years. As Epic reaches approximate apparent feature parityGetting REAL feature parity with Steam will take years, because global networks and global transactions take time and expertise to set up. But the vast majority of people are looking for basic features like reviews and mod support. with Steam, will the public warm up to it? 18 months from now, will the general public still be holding a grudge over the Metro Exodus and Borderlands 3 exclusives, or will all be forgotten / forgiven once Epic feels like a proper games platform?

I know I whine about how feature poor EGS is, but if Ubisoft moved their titles to EGS from Uplay, I'd consider that a MASSIVE improvement.
I know I whine about how feature poor EGS is, but if Ubisoft moved their titles to EGS from Uplay, I'd consider that a MASSIVE improvement.

In the more immediate future: Is Epic going to continue signing exclusives? Sure, CEO Tim Sweeney seems fond of them, but there’s probably a diminishing returns effect going on here. If giving a million bucks to a team for a lifetime exclusive only results in a few thousand new users to EGS, then that’s a terrible investment. What would be the “worth it” threshold for Epic? What are they willing to pay per new user?

My guess is that Valve isn’t about to change their behavior. I know these exclusives are a big deal to us consumers, but to Valve? They’re nothing. The loss of Metro Exodus means so little to the Steam bottom line. Epic would have to become an immense threat before Valve would have an incentive to lower their cut. I can’t see that happening in the near-term.

You might argue that Epic’s antics could have an impact on Steam because Valve did eventually, grudgingly, introduce returns thanks to market pressure. That means it is possible to get this behemoth to move. Then again, returns seem very small compared to lowering the cutThen again, this article suggests that 8 to 9 percent of goods purchased at stores get returned and 25 to 30 percent of online goods are sent back. I don’t know if those numbers map cleanly to digital goods, but it’s easy to imagine how returns can eat into your bottom line. It’s possible that Valve already experienced a non-trivial reduction in income back when they began offering returns, and they seemed to survive just fine.. If Valve lowers their cut from 30% to 20% – which is still far more than EGS is taking – that would mean the company willingly giving up a thirdA THIRD!!!!Why, that’s almost as much as developers give to THEM. of their gross revenue. For a lot of companies, that kind of drop in income isn’t even survivable. Valve is a private company so we have no clue how the company’s financials work. But unless Gabe Newell is taking all the Steam profits and spending everything on fidget spinners, the company is probably using all of that money for something. Salaries? Infrastructure? R&D? It’s hard to say, but it’s easier to grow a company than to shrink it. Like I said in my Escapist article, Valve spends quite a bit on infrastructure.

It’s impossible to know what Valve might be thinking.

  1. Oh wow. We lost several high-profile titles to EGS in just a couple of months. If this trend continues, it could be ruinous. We need to lower our cut so that developers will continue to favor our platform.
  2. Epic is spending millions to gain exclusives that are not a serious threat to our platform. They’re clearly spending more on exclusives than those exclusives are earning. They can’t maintain this spending forever. We can safely ignore them for now.
  3. Epic who? You mean the Unreal guys? What are they up to these days? Are they still putting out Unreal titles? I remember Unreal Tournament was pretty good.

I don’t know. It’s going to be a weird couple of years.

 

Footnotes:

[1] Not for me, though. I’ll complain about anything.

[2] Getting REAL feature parity with Steam will take years, because global networks and global transactions take time and expertise to set up. But the vast majority of people are looking for basic features like reviews and mod support.

[3] Then again, this article suggests that 8 to 9 percent of goods purchased at stores get returned and 25 to 30 percent of online goods are sent back. I don’t know if those numbers map cleanly to digital goods, but it’s easy to imagine how returns can eat into your bottom line. It’s possible that Valve already experienced a non-trivial reduction in income back when they began offering returns, and they seemed to survive just fine.

[4] A THIRD!!!!

[5] Why, that’s almost as much as developers give to THEM.



From The Archives:
 

93 thoughts on “Experienced Points: Why Steam Can’t Meet Epic’s Price Challenge

  1. Lanthanide says:

    “Epic who? You mean the Unreal guys? What are they up to these days? Are they still putting out Unreal titles? I remember Unreal Tournament was pretty good.”

    No, the Fortnite guys. The game that brought in over a billion dollars last year on costumes.

    1. RFS-81 says:

      Fort-what? If it was important, I’d have heard of it!

      1. DerJungerLudendorff says:

        I think I heard my kids talking about it. It’s like minecraft or something.
        Do we already have that on the store, or is it another Uplay exclusive?

    2. kikito says:

      I know I am somewhat old and out of the loop, but I just skip all Fortnite-related news and stuff. Doesn’t interest me in the slightest.

      On the other hand, I catch the glimpse of a rumor about Half Life 3 and I get all nervous.

      1. OPG says:

        I think it’s worth following Fortnite on a meta level, since it’s basically the Games As A Service poster child (in all the good and bad ways that implies). News like the constant crunch on the Fortnite team or Dan Olson’s piece about Manufactured Discontent are great if you want to keep tabs on general trends.

    3. cheekibreeki says:

      This. With all the shit they’re pulling nowadays, I nearly forgot that they were the creators behind the Unreal Engine, Unreal Tournament, and Gears of War and just instinctively saw them as that company that made Fortnite and the Epic Games Store

    4. Calmre says:

      wow amazing, 1 billion gone from mommy CC’s all over the world, almost hard to believe.

      1. Galad says:

        Some of us were grown ups who were tempted enough by something cosmetic or other.

        Some of us. :|

    5. Agammamon says:

      Yeah, I think that’s that mobile game the kids like. Like Pokemon or something. My eight year old niece likes it.

  2. John says:

    The Epic store road map does not appear to contain anything about Linux support, which, while not quite the only feature I care about, is the one feature I regard as absolutely necessary. Great.

    1. Grimwear says:

      Interesting thing about Linux.

      https://www.youtube.com/watch?v=DR30kHnT8hE&t=0s

      TLDR: I wasn’t paying super close attention but essentially Steam has it set up so that for a lot of games Linux support is turnkey and requires minimal effort (hey look Steam doing good for gamers). Epic Games has now bought out the company that provided anti-cheat for Linux and have now cut Linux support entirely meaning a lot of smaller studios that relied on it and didn’t have dedicated Linux coders are now forced to shut down their Linux multiplayer unless they want rampant cheating.

      1. Philadelphus says:

        Not quite, according to this reply from Epic Games in this article from GamingOnLinux. It’s possible that Linux-related issues may get bumped down in priority, but it’s not being dropped.

        And on the the first point, yes, Proton, Valve’s bundling of a custom fork of WINE with Steam, is coming along pretty nicely. According to ProtonDB there are thousands of games working on Linux right now, though I should caution that that’s at various levels of support; at the moment there are 814 rated “platinum” (which is simply “click-and-play”), with a further 890 rated “gold” (which is basically either “requires a little fiddling to get running,” or “runs with minor, negligible issues”). And that’s not just indie games, that includes a number of AAA games as well (though indies are generally more likely to work well, it seems).

        It’s allowed me to play several Windows-only games from my library from before I switched to Linux (Age of Empires II, how I’ve missed you!), plus I’ve even picked up a few games without Linux versions that I never expected to be able to play, so I’m quite happy with it.

    2. tmtvl says:

      Speaking of Linux…

      “Hey, you can’t complain about free things” is a common mindset.

      Hehehe, oh Shamus, you sweet summer child.

  3. Grimwear says:

    When it comes to Epic I don’t really care. I can wait out timed exclusives easily. I’ve mentioned before but I currently have 52 games on my steam wishlist. Having to wait on Borderlands 3 or Metro Exodus is nothing. Heck I most likely wouldn’t buy them on release anyway since my backlog is so huge and I can pick up other games for a fraction of the price. I’m not sure how well Epic has planned things out long term. Yes Fortnite is the big thing now raking in billions but people can move on pretty quickly. Heck Pubg was dominating last year and has already lost around 75% of its peak playerbase. I don’t think Epic can afford to spend millions on exclusives and the years necessary to try and wait out Steam.

    And lets be honest. If Steam actually stood up and took notice and was actually threatened why do people think that Steam would reduce their cut. I have no access to their financials but I’m assuming they’re making gazillions being the largest online gaming storefront. Steam could literally turn around and outbid Epic Games on all the exclusives they’re trying to get their hands on. This is actually ideal for developers and probably something they want. They get to have their titles fought over in a bidding war which boosts the price of their exclusivity and assuming Steam won (still assuming Steam is sitting on huge sums of money) then they get to have their game available to the largest consumer base. Yes the devs pay a 30% cut to Steam but they can use the millions they were paid in the bidding war to dry their tears.

    And about Steam offering refunds I may be off the mark but if I remember right I believe there was talk of Australia or the EU taking Valve to court over consumer rights laws and the lack of refunds existing, which led to Steam implementing them worldwide rather than regionally.

    1. Dreadjaws says:

      52? That’s some spectacular restraint (and perhaps a DC universe reference). I have 465, and I can assure you I don’t add every game I’m interested in to it, so in reality it’d probably be bigger.

      1. DerJungerLudendorff says:

        Now I feel better about my mere 250 items.

        1. silver Harloe says:

          Well, foo, now I feel a lot less pressure to trim my wishlist down to 20 items every time I get to 25 or so.

          1. MadTinkerer says:

            1258 games on my wishlist and 1621 games in my library.

            I win!

            1. trevalyan says:

              At what?

            2. evileeyore says:

              I have 0 things on a Steam wishlist (I don’t have one) and have bought 0 games from Steam. I win!

              Let’s not talk about my GOG account.

    2. Mephane says:

      Yeah, refunds came to Steam not at all due to the EGS, in fact they came before the EGS even was a thing, due to legal pressure in the EU and elsewhere.

      1. Shamus says:

        Refunds came to Steam soon after one of the other platforms adopted it. (I’m thinking Origin or GoG?) It was sometime in 2015. And there’s also the EU / AU legislation others have alluded to here. I wasn’t suggesting that EGS was responsible for refunds, I was just saying, “Look, it is possible for SOMEONE to get the company to move”.

        1. Hector says:

          Edit: Stormcaller posted a couple links below.

          I know that Valve got into some steaming hot water with Australia as they tried everything to avoid giving out refunds. I’m not really sure why; they pissed off many people for no real gain, while also getting on the bad side of the Australian courts who ended up kinda-sorta humiliating them publicly for bad behavior.

    3. Lars says:

      In the name of “Forbes” Tim Sweeney is a bit richer than Gabe Newell now. So Epic should have more money than Steam. Although Epic has publicly traded stocks (virtual gambler value), Valve is private. (hard cash)
      This bidding wars could be interesting or devastating. If Valve looses … DRM got you.

      1. DerJungerLudendorff says:

        I’m not sure if that’s a direct comparison though.
        Epic is pretty corporate, so they also overpay their executives massively.
        Maybe Steam does that too, but we don’t really have enough to tell. Their culture is supposed to be pretty flat, so it’d be a bit weird to see massive pay discrepancies though.

        1. Lars says:

          Yeah. I heard stories that new employees are told to call every other by their first name. No one is Mr. or Mrs. the least of all is Gabe.

    4. Asdasd says:

      There was a time when exclusives would really have twisted my arm, but not this late in the day. When it comes to games I have an embarrassment of riches at my fingertips (a literal embarrassment; they call it the pile of shame for a reason) so anyone hoping to convince me to buy yet another new game is going to have to be very persuasive. I can hardly justify all the games I already bought! Putting your game on a new store with lacklustre features pushes you further away from persuading me, not closer.

    5. Agammamon says:

      I think PubG was dominating from about April 2017 to September 2017 – about a month after Fortnite was released.

  4. Dreadjaws says:

    Pretty sure I mentioned this in another article of yours, but Japan is certainly not the only country in the world that sells Steam store credit cards. Those are sold everywhere. If Steam were to lower their cut to 12% they’d be losing many more millions that those of the population of Japan.

    Likewise, people who show up for a free copy of a game are less likely to complain about missing features because “Hey, you can’t complain about free things” is a common mindset.

    Well, I have a complaint that I never see mentioned but it’s likely to affect a high number of users. There’s no “backup” feature for EGS games. That means that if you want to play a game, you have to download it on the PC you want to play it. Now, I have limited internet, so I usually download games elsewhere (at work, for instance, where they don’t have such limits), back them up in an external hard drive and bring them home to re-install. Steam allows backups. GOG allows backups. Origin allows them. I think even freaking UPlay lets you do it. But EGS? No, of course not. They don’t even launch with basic features. I’m surprised they included a “Play” button for their games.

    In any case, this is going to be a long process. Epic is clearly here for a fight and I don’t see them giving up anytime soon. It’s really hard to predict what will happen over the next couple of years.

    Well, just a year from now we’ll have some answers. That’s when many of the current EGS exclusives become available on Steam and then we’ll see how well they sell. Granted, there are a couple of other factors at play, like price (people simply won’t accept a year-old game at full price) and features (will those games launch barebones with already-released DLC by the time sold separately or include the whole package?).

    I will reiterate my already-given opinion that Steam doesn’t think of Epic as a threat. Epic is burning through money too fast and gathering increasingly negative PR without really getting any positive results out of it, all on the hope that their gamble pays off. Oh, yeah, they love to claim that their strategy is a success, but note how they never reveal actual numbers. If they were really being successful and they had evidence of it, they’d show it, because that would prove everyone that they’re right. Yeah, they don’t have to prove anything, but with the PR nightmare they’re living in, not doing it would be silly, so it stands to reason that they simply can’t.

  5. Dreadjaws says:

    Side note and entirely unrelated to this subject: I just finished playing Wandersong and it was one of the most wonderful experiences I’ve ever had with a game. I thoroughly recommend it to everyone.

    This reminds me I haven’t seen any more of your indie games short reviews in a while, Shamus. Too busy with AAA stuff?

    1. DerJungerLudendorff says:

      Seconded, Wandersong is very precious.

      1. kikito says:

        This looks like a platformer sibling of LOOM (that ain’t bad).

    2. Galad says:

      OK fine fine, I’ll play Wandersong, jeez. I’ve only owned it for 6 months, what’s the rush? :P

  6. Karma The Alligator says:

    18 months from now, will the general public still be holding a grudge over the Metro Exodus and Borderlands 3 exclusives

    How long are those going to be exclusive for, though? Are those forever exclusive, or timed, like others? Because if they’re timed, I’m perfectly willing to wait (because the EGS would have to do a lot more than Steam to get me to switch).

    1. Mephane says:

      Both are timed, Metro Exodus for 12, Borderlands 3 for 6 months. The latter is the exception so far, all other EGS exclusives are also for 12 months.

  7. Mephane says:

    As Epic reaches approximate apparent feature parity[2] with Steam, will the public warm up to it? 18 months from now, will the general public still be holding a grudge over the Metro Exodus and Borderlands 3 exclusives, or will all be forgotten / forgiven once Epic feels like a proper games platform?

    For me, Epic has crossed the point where it’s no longer just about lack of features, ludicrously bad security, or annoying exclusive deals.

    The company, through Tim Sweeney himself, has shown an attitude of sheer contempt for gamers and generally anyone who criticises them.

    They treat players not as customers, but as the product, Facebook-style, that they deliver to their real customers, the publishers.

    And last but not least, a have a very deep loathing for anyone who pretends to be on some holy crusade for a greater cause when in actuality it is all for selfish reasons only.

    (Case in point: for as much as Tim Sweeney rambles on about breaking up Steam’s “monopoly”, they sure as hell do everything in their might (by accident or intent, I don’t know) to reinforce Microsoft’s actual monopoly on PC gaming.)

    I also would like to add that I never liked the concept of exclusives anyway. The very word “exclusive” means to exclude someone from something, to withhold something, to bar access etc. It’s a negative word in my book, and particularly in the sphere of video games I cannot remember a single instance where the word was associated with anything genuinely positive. It always means that either the game as a whole, or parts thereof is restricted in some form that is dictated by marketing tactics like FOMO. You end up with stuff like “exclusive preorder content” or the bullshittery that is the PS4 exclusive content in Destiny 2 on top of entire games being exclusive to a platform not out of technical necessity, but due to marketing. And even the seemingly more benign cases boil down to the same principle, like “play <time limited event> now to get exclusive rewards”, because fuck you if for any of the 1000 possible legit reasons you did not play during this particular 2 week period, right?

    1. DerJungerLudendorff says:

      I agree that Epic is pretty bad, much like most of the Triple Ayyy industry (and the big corporations in general).

      But it does always make me wonder what Steam is like. We never seem to hear anything about their attitudes, work situation, financial state, or what have you. It makes it a bit hard to say that we should all stick to Steam, when they might also be a giant pile of jackwagons for all we know.

      1. Sleeping Dragon says:

        AFAIK some time ago Valve had a very good rep for being a private company with a relatively flat structure and a very open and friendly work culture, I haven’t heard anything that would make me think this has changed, however this was back in the day they were still largely a studio and not just Steam so I don’t know how well that translated, It could be a partial explanation for their somewhat hands-off approach to things like moderation.

        1. Distec says:

          There was some noise when they fired their Augmented Reality department, and one of the outgoing employees complained about cliques at Valve. But I don’t know what to do with general statements like that, and it’s worth nothing that Valve allowed them to take their work with them. For a contrasting example, see Zenimax and Carmack.

    2. Mephane says:

      Oh, and as it just happens, apparently the BFG in Rage 2 will be exclusive do the deluxe/collector’s editions only. That’s technically even P2W territory we are entering here.

      1. shoeboxjeddy says:

        No, DLC for a single player game is not “pay to win,” technically or otherwise. Pay to win is a multiplayer game term, you’re specifically paying real money to win against other players (or to outrank them or whatever). That’s like saying an optional DLC level in an RPG with lots of level up items is pay to win. It’s not, that’s not what the term refers to.

    3. Hector says:

      Sweeney’s the guy who carefully assessed the market and decided that Tencent was a proper and ethical choice to partner with. That tells me everything I need to know about the man.

      Incidentally, I wonder what this means for Unreal Engine. It’s pretty obvious all the focus at Epic is on Fortnite and the store, not the technology anymore. Plus, many of the best minds behind it have left the company, probably not-coindentally after the Tencent deal. I’m curious if they even bother to continue with the engine at all.

      1. RichardW says:

        Unreal 4.22 just came out and is one of the best updates to the engine yet. They reworked the endire rendering pipeline to drastically cut down on draw calls so there’s a pretty massive performance boost just from switching over, along with a lot of little quality of life improvements to the editor itself and their contined work on the “next gen” particle and physics editors.

        That said, it really does feel like Fortnite dictates what features trickle down to the Unreal Engine community. I think a lot of the big drive into getting better performance lately has to do with them bringing that game to more mobile platforms and the roadblocks they encountered there. So, developers using Unreal are kinda starting to watch what’s coming to Fortnite next for hints as to where the engine support my be headed.

        1. Hector says:

          That’s true, and I don’t mean to suggest that Unreal will just stop tomorrow. But if the company us making money elsewhere, and if major companies view Epic as competitor and either roll their own engine or buy elsewhere, and if management and key stakeholders are less interested… Well, slowly ending the engine development becomes an easy decision.

          This is basically what happened to Valve. They didn’t plan to stop being a developer. But montg-by-month they were building other kinds of expertise and the games became less and less relatively important. They do some development now, but Dota is about it.

    4. Crimson Dragoon says:

      You’ve hit the nail on the head here. Everything about the way EGS is being run is to court developers, not consumers. Case in point: the alternate payment methods Shamus was referring to in his article.

      Like Shamus said, with Steam, when someone uses an alternate payment method like a Steam card to pay, the processing fee gets eaten up by Valve itself, taking it out of that 30% cut. The customer pays the same as if they had used a credit card. With EGS, that fee gets tacked on the customer instead, so they have to pay more. Considering most of Asia uses these kind of payment methods, that’s a big deal for a lot of customers. Again, this is good for developers, who don’t have to pay that cost, but bad for consumers.

      What’s really telling was Tim Sweeney’s attitude towards this. I wish I could find the tweets, but at one point, a developer asked if they could take on those processing fees themselves, so as not to charge their customers any more. Sweeney said he would look into, but also said that he couldn’t understand why a developer would want to do that. It tells volumes toward’s Epic’s view on their customers.

      1. Shamus says:

        Worse, this gets to be really tricky once you introduce the idea of store credit. (Which is pretty much a necessity if you’re going to do business in Japan-like countries.) What happens if I buy a $10 card at retail, and I use PayPal to deposit another $10 into my store wallet? If I buy a game for $15, then how much does the developer get? Technically one of those $10 deposits was worth a lot more than the other. If the store is going to pass those transaction fees along to the developers, then they need to somehow track all the different currencies that went into my wallet and how much they were “really” worth.

        * If I buy a $10 Steam card, then $10 goes into my wallet and Steam gets $8.50.
        * If I use PayPal, then $10 goes into my wallet and Steam gets something like $9.50, I think?
        * If I return a game worth $10, then $10 goes into my wallet and the Steam balance sheet doesn’t change.

        All $30 of those dollars end up mixed together in a single wallet. If you have a system like this and you want to offload those transaction costs to the developer, then this could turn into an accounting nightmare. It’s way easier for the store to just eat those costs itself.

        If I USUALLY use PayPal but occasionally use cards I bought at Walmart, then the overall value of my money will follow a sawtooth pattern. (Obviously the displayed value of the money won’t change for ME, but the behind-the-scenes accounting needs to track how much of my wallet is actually occupied by fees.) It’ll go up over time, and then drop again when I add another retail card. So when I buy a game, the system will need to record the overall worth of my money at the time of sale so that any eventual refund can be properly applied.

        Madness.

        It’s not IMPOSSIBLE or anything, but it strikes me as being one of those things that will cause never-ending headaches and confusion down the line.

        1. Decius says:

          Renegotiate the cut of cards to the retailer. Put them in vending machines, if you have to.

        2. Boobah says:

          Keeping track of the fees associated with a wallet is easy. Your example, for instance, is six and two-thirds percent fees on a $30 wallet.

          The real trick would be keeping the store provably honest with the developers when the store could claim that a higher-than-actual percentage of any given purchase is the most expensive kind of store credit; the variation between gift card and PayPal is almost as much as the EGS cut.

          1. Richard says:

            If this is tracked, then the store can be expected to arrange the rules such that the ‘cheapest’ type of store credit is always spent last. Even if they don’t at first, they will later. For example, all credit cards with “promotional” rates do this (unless the law requires otherwise).

            Thus if a given transaction doesn’t fully empty a wallet, then that ‘cheapest’ store credit isn’t spent at all.

            If the only (or most common) way for customers to spend money is to fill a wallet and then spend from that wallet, then wallets will accumulate bilges full of that store credit, reducing the actual take of developers.

            As a developer, I would have no way of knowing how often wallets are fully emptied, and so cannot call foul if it turns out that I never, ever actually get “full” payment for any sale at all.

    5. Scampi says:

      They treat players not as customers, but as the product, Facebook-style, that they deliver to their real customers, the publishers.

      I find many corporations to hold similar attitudes these days. The “customer” seems no more to be the person who buys their product, but some other corporation who requires a company’s services (or is required for their delivery, occasionally) and the actual customer is trapped in some strange position, where they are reliant on the mercy of the companies who are supposed to cooperate to provide them with goods, but are instead way more interested in making each other’s life comfortable than the guy’s who actually has to pay them.

  8. Delachruz says:

    I’m quite happy to simply wait for the exclusives to come back to steam. Or if they don’t, to just not play the game, ever.
    It’s still cute that Tim Sweeney is having that very one sided “fight” against Steam, where he still desperately attempts to convince people that he is actually competing with them. At this point they are putting more work into pretending to be competition, than they do actually competing.
    I’m going to greatly enjoy posting ironic screenshots of these happenings in around 6-12 months, where EPIC will most likely get the same, semi-sad chuckle that Origin and Uplay got back in the day.

  9. Gethsemani says:

    It might be worth pointing out that the “market pressure” that eventually forced Steam to introduce refunds was not so much the market as it was EU legislation that basically makes it illegal to not have a refund policy that allows refunds for misleading advertisement, mistake purchases and broken or defect products. Had the EU not tightened and expanded that legislation to include digital goods Steam would probably not have bothered, but losing the European market would have stung.

  10. Infinitron says:

    will the general public still be holding a grudge over the Metro Exodus and Borderlands 3 exclusives

    Here’s the real question: Is it in fact the case that the “general public” holds a grudge against Epic, or is this the obsession of a relatively small number of online gaming activists? In other words, do the normies even care about this stuff?

    1. Scampi says:

      I doubt the “general public” even knows anything is happening at all. I think this is actually just the perception of a minority of people who even realized some announced game has set to exclusively be sold on the EGS.
      I don’t consider myself a normie and I don’t really care due to my strict (!) anti-DRM stance. The best I can muster is some kind of bored attention due to Shamus’ columns. If not for Shamus, I’d barely have realized the EGS exists at all.

      1. Sleeping Dragon says:

        Even the general GAMING public probably doesn’t care all that much, we have to remember that the people who follow the news and are active on sites like IGN, Escapist or RPS are a minority even among PC gamers. The only thing that might raise most people’s eyebrows is the need to make a new account but that is where the Fortnite playerbase* on the one hand and the free games given away over the first year on the other come in.

        *If anyone pulls the nonsensical “lol, it’s all 8 year olds” argument I’m going to ignore it.

        1. Richard says:

          Pretty much the only people who will know about at are the people who either pre-ordered Metro Exodus, put it into their wish list, or are avid followers of the ‘right’ part of the gaming press.

          I only found out it had gone exclusive because I had it on my wish list, and then found that it was suddenly not possible to buy.

          So an exclusive that’s made so at the beginning would be basically invisible.

  11. Geebs says:

    The really frustrating bit is that it doesn’t even seem as if the “good for developers” angle that Epic had is even real. Good for publishers, sure – and it certainly seems as if publishers are the driving force behind exclusivity deals. But you don’t hear much from the people who actually develop the games (no, Randy, you don’t count) to confirm that they’re actually getting paid better.

    Then you find out that Epic is funding their exclusives by means of endless live service crunch, driven by the abuse of contract workers. Suddenly it looks as if, on average, the people who actually work in the industry are getting an even worse deal than the customers.

    1. Freddo says:

      My guess is that the free publicity as a result of the “controversy” surrounding the exclusivity deals is what makes this work for Epic. I certainly wouldn’t have noticed their store launch otherwise. I can also understand if the big publishers are willing to take a short term hit in sales if the future return is a drop in Steam charges.

    2. Sleeping Dragon says:

      To be somewhat fair this is a matter between a developer and their publisher (if any) and not Epic. On the other hand Epic is not exactly a shining example of treating their employees well, the relevancy of which we could negotiate but it definitely does no good to Epic’s “we are the friendliest of developers’ friends” message if nothing else.

  12. Stormcaller says:

    if you are curious, this covers the Australian side of the refund requirement:

    Official press release from the ACCC: https://www.accc.gov.au/media-release/valve-to-pay-3-million-in-penalties-for-misrepresenting-gamers-consumer-guarantee-rights

    article on pcgamer: https://www.pcgamer.com/valve-posts-a-notice-about-australian-consumer-rights-on-steam/

    in summary: ACCC sued for infringing AU law (and technically won by self declaration), Valve appealed, lost, appealed, lost, appealed to high court (final option) and was dismissed, so complied (eventually).

  13. Nixorbo says:

    Typo in footnote 4 – “THRID” should be “THIRD”

  14. Joshua says:

    I think something needs to challenge Valve a little harder, and not just for their Steam platform. Valve has frustrated many of us for years for refusing to work on games that millions of people want, and instead focus their attention on whatever thing catches their fancy despite lack of obvious consumer demand (Steam Machine, VR, Artifact). The only way that they get away with doing this is because Steam was such a cash cow. If someone else had developed Steam, I think they’d spend less of their energy on dreamy projects and more on focusing towards what people are actually asking from them.

    Of course, I think their legendary flat structure, and “work on whatever you want that inspires you” management style is very nice-sounding in theory, but contains a lot of hubris. How many other companies get to flat-out ignore what their own customers are explicitly telling them that they want and will pay money for so they can work on random projects instead?

    1. GM says:

      should Valve focus be on what you said or what it´s doing like Linux?
      yeah where is VR going and shame Steam Machine went nowhere.

  15. N/A says:

    A fair chunk of Valve’s cut goes into paying for the transaction costs, which Epic doesn’t take care of. So, whether or not Valve CAN lower their cut is somewhat questionable – honestly, I suspect that dare by Epic was because they knew Steam couldn’t do it, so it was a safe way to claim the moral high ground.

  16. tmtvl says:

    Why, that’s almost as much as developers give to THEM.

    Err, 1/3 > 30%, chief. Point well taken, though.

  17. Decius says:

    “Or, they could have taken what they paid for exclusives and used it to buy the rights to give away N copies on the EGS.”

    Sure, they could have. And they did, for some games. But that isn’t going to get the same people to install the EGS platform: You’ll get people who find free games and play them, rather than people who buy the specific games they want.

    Plus, “Give away free games” is already in the EGS playbook right now. I have (checks: 11/14) free games from EGS, most of which I have never installed.

    1. Shamus says:

      I notice they seem to be giving away old games and buying exclusives for upcoming games. I also have quite a few free games from EGS, but it’s all stuff I already have through Steam. I’d like it if they tried the giveaway idea with newer stuff. Like you said, it’s likely to attract a different crowd.

      1. Sleeping Dragon says:

        Yeah, their biggest “claim to fame” has been the initial Subnautica giveaway (and that can really only be counted as “new” at the time of the giveaway if you ignore the Early Access period) and most other games they’ve given away are older/indie/been bundled already/all of the above. That said a lot of them are actually very good within their respective genres.

      2. Decius says:

        My guess is that the people who signed up to EGS for free game Fortnite are a different market segment from people who signed up for the fortnightly free game and both will be a different market segment than the people who signed up for one of their exclusives.

        I dislike the gameplay that emerges from the free-with-MTX model, but I have no problem with the ‘back catalog at a discount’ feature or ‘full price new release’ type of market.

        And I don’t understand why they didn’t spend a million dollars to accelerate their roadmap. They spent far more than that to get people in to a feature-incomplete store.

  18. GloatingSwine says:

    I’ve a suspicion that trying to push Steam to 12% is an attempt to establish it as an industry norm away from 30%, so there’s leverage against Sony and Microsoft to follow and more of that sweet Battlepass money flows back to Epic no matter what platform people buy on.

  19. Raygereio says:

    For years I’ve wanted someone to come in and really stand up to Valve and give them a proper run for their money.

    Why though? I know the obvious retort is that competition is good. But really, that is just capitalistic nonsense that your corporate overlords have put in your head, my comrade. So let’s ignore it.

    Who actually profits from Valve having a competitor? The publishers in the short run. They like being paid for exclusivity deals or having the ability to sit back and have distributors outbid each other for lower prices.
    But how does it make the developers’ or us – the customers’ lives better? Does anyone think that after a few years of balkanizing the PC gaming market, the result will be anything other then increased piracy numbers and people sighing that the market should just consolidate?

    1. Mistwraithe says:

      Um, can you really not see the answer? Developers are obviously better off if the cut they lose for selling their game drops from 30% to more like 12%?

      I get it that Epic are pissing some customers off and I also get it that their motives are not “world peace and love for all”, but as a software developer who is working on a game I am totally cheering Epic on! The 30% cut Steam take hasn’t been justified for years.

      1. Agammamon says:

        *Developers* are not – publishers are.

        A developer only benefits if they are self-publishing.

        1. Decius says:

          Developers benefit when publishers don’t drop them for being unprofitable.

    2. RandomInternetCommenter says:

      In your imagination, how do corporate overlords benefit from pushing the idea competition is good? The common 21st century startup model is to raise money on VC rounds, then operate at a loss for a few years to gain a monopoly. Your corporate overlords would very much prefer you believe there’s nothing wrong with FAANG holding most of the market share.

      It’s one thing to advocate for state central planning, misguided an ideology as it might be, but it’s another level of nonsensical to applaud private and nonaccountable companies for cornering the market! A rational individual looks at monopolies as the definition of hypercapitalism, not as the remedy to it.

    3. shoeboxjeddy says:

      What kind of demented logic makes you think that a company having NO serious competition would ever be good for the customer or their supplier or anyone else except the monopoly itself? This is not even a 5th grade level of economic understanding. Because at 5th grade, you might put up a lemonade stand and realize that if somebody else puts one up, you’ll have to be better than them in some way to make any money out of it.

    4. Boobah says:

      Why though? I know the obvious retort is that competition is good. But really, that is just capitalistic nonsense that your corporate overlords have put in your head, my comrade. So let’s ignore it.

      1) That is not an argument.

      2) I vehemently disagree with your statement.

      3) Even if you are open to persuasion this is not the forum within which to make the attempt.

      1. Shamus says:

        (I’m responding here because it’s currently the bottom-most comment in the chain.)

        I don’t think I’m prepared to moderate yet another argument in the economic policy / philosophy war. And even if I was, I have no reason to suspect it would turn out differently than the last 10,000 times people have done this on the net.

        Let’s just drop this before it gets started.

  20. Binary Toast says:

    I recently had a thought about Epic being so exclusive happy, and simply put, I’m starting to wonder if this is the sort of thing that’ll only work this year. What am I talking about? I’m talking about what’s going to happen next year, when all these games hit Steam and GOG.

    If everyone that says they’re going to wait for the Steam/GOG release of whatever game not only wait, but actually follow through on buying? And if those sales numbers are bigger than what they got from Epic? That is what those publishers will notice. When the sales metrics spike next year, the publishers signing on with Epic won’t be thinking about how much more money they got with their bigger cut, they’ll be wondering if they could have had all this post-exclusive money the year before.

    1. Decius says:

      And they’ll do the math, using discount rates, and find a number for how much money should be in the giant bag of money traded for the exclusivity deal.

      The math itself is pretty simple, it’s getting the numbers that’s hard.

  21. Melted says:

    Sorry, what? The store doesn’t have a shopping cart yet? Does that really mean it doesn’t have a way to purchase multiple items at once, or is there some detail I’m missing here? I don’t think I’ve even seen an online store without that. It’s so basic it’s hard to even think of it as a “feature”.

    1. Sleeping Dragon says:

      If I were in a joking mood I’d say they don’t have enough games for this to be a problem anyway…

  22. trevalyan says:

    Steam is not going to shell out for exclusives, and they certainly won’t reduce their cut. If they wanted to play hardball, and they have every reason to do it -now- before more developers jump ship? Enact a suicide-inducing 35% cut for any developers who have games on both Steam and Epic. Call it a security surtax because Epic keeps harvesting Steam data, whatever. If you’re not getting that sweet exclusive lucre, Steam would make you take a -really- hard look at whether using EGS is a good idea or not.

    1. Mistwraithe says:

      I think that would be a very quick path towards an anti-monopoly lawsuit against them.

      1. trevalyan says:

        You’d think so, but they could accurately state that they’re not using such pricing against all competitors, or even calling for exclusionary contracts as Epic is. I’d love to see that hashed out in court.

        1. Decius says:

          That would not be a defense against the anticompetition claim. At worst, it could get GoG included in the lawsuit, despite GoG not implementing a pricing change.

          Because unlike in politics, it is illegal for companies to simply recognize that they would all receive mutual advantage from a state of affairs that would be illegal to conspire to achieve, and then allow that state of affairs to occur. (e.g. with price fixing)

          1. trevalyan says:

            If you’re talking about the crime of collusion, that’s a ridiculously hard crime to prove even when it happens. Just about every reputable business program in the civilized world teaches about game theory specifically to show businesses how to maximize profit in a stable market, -without- having to communicate.

            Besides which, if Steam is the only one acting, then there doesn’t need to be communication, much less collusion. Your case would be laughed out of court long before the idea of dragging in GoG ever got suggested.

  23. Agammamon says:

    The problem with the Epic store is they keep pushing their PR towards the end consumer – who are the people who are not only seeing no advantage but are actively being screwed by Epic – rather than towards the developers, or, really, the *publishers*, who are the people who are #Winning with the Epic store.

    The Epic store is providing absolutley zero value to the *consumer* while Sweeney et al keep trying to pretend that they’re doing us a favor. Epic’s left a big steaming turd on my doorstep and keeps trying to tell me it’ll improve my property value.

    In the end, *my* prices will see no change. What it will mean is that AAA -> PUBLISHERS <- will get a larger cut of the sales. Bobby Kotick and Andrew Wilson get to see their stock options increase and Randy Pitchford gets to sneak another 12 million out of the company.

    1. Decius says:

      Also, lower risk means more game ideas that aren’t ‘safe’ according to business math will get a publisher.

  24. Guest says:

    They’re buying an install base. It’s harder to do that now than when Steam did it, by saddling HL2 with Steam, now you can offer free games like Origin, to try to get people on board, and make your titles exclusive to your store, or be like Ubi, and force an install of uPlay with every one of their games whatever store you bought it from.

    Epic isn’t going to buy exclusives forever, they care as far as they’re getting more installs.

    Personally, still not a big ish for me. Feels like more brand loyalty than real problems. People want their whole library in one place and are annoyed they can’t buy it where they want, which is a very small problem. No gifting or shopping carts, sure, those are annoying, but they’re relatively minor annoyances that don’t merit the size of the outcry. I installed it to try fortnite, bad game, mediocre installer, still less frustrating than the slog of poor optimisation steam has become, the constant hassle of Origin logging out and forcing two factor to log back in, refusing to recognise the only device it’s ever been on, and uPlay being well, uPlay. I’d happily grab Exodus off it, if I had the spare cash. It’d probably perform better since I can shut down steam while playing M:E. It’s another installer, but we’ve gotten used to a lot of those, and will have to do so for more if we want “competition”.

    I hear people saying they won’t grab BL3, not because Randy Pitchford is a conman, a liar, and an alleged basher of his subbordinates, who stands accused of fraud, who leaves pornography and trade secrets in family restaurants, and does not properly compensate his workers-nor apologise for assaults, but because it’s on the wrong store. Bloody Gamers. I’ve already got the MW2 boycott image saved for when they cave on launch day.

    A side note? This is what competition looks like in the real world. Competition between digital storefronts was always going to involve massive corporations, and this is how they compete-just like they did with consoles, just like they do with supermarkets, with things like greenfield acquisitions and predatory pricing, and they’re going to do that now. Epic will buy exclusives (Which work like GFs in that they deny competition real estate, and they actually provide a benefit to Epic, which makes it even easier) until they’ve got a big enough install base that it’s cheaper to price Steam out(Predatory Pricing). You might think the second results in lower prices for all of us. Nope, not in the long run. They’re trying to reduce the other’s market share until they can charge us what they want. Nobody competes to offer the best value to the consumer, they compete to become the dominant force in the market, with the ideal goal being essentially monopoly. Epic could try being better than Steam, and they’d get a slow trickle of users, or they could buy a massive title that millions are going to buy regardless of platform, and make them users. This isn’t some breach of etiquette, or Epic being dicks. This is the system working as intended. The idea of competition here directly enables this. A perfectly ethical company could come along to try to create some competition (Like some of the indie storefronts), and they’d get very little traction, as we’ve already seen.

    1. Sleeping Dragon says:

      Yuuuuup. I will add that the reason Epic launcher is so barebones is because they probably felt they didn’t need to compete on that front at this point (which yes, does show somewhat where their priorities are). For at least the first year Epic is ensured publicity by giving away games and the whole exclusives “controversy”? The people who will actually refuse to buy the exclusives (definitely a much smaller subset of the people who claim they will) wouldn’t be their customers anyway and the more screaming there is about game Y being exlusive to Epic the better the actual chances that those who might become customers will check out the trailer or will hear about the free games given away and bam, account created, client installed, ???, profit.

  25. camycamera says:

    I honestly find it hard to be frustrated over a free launcher. The outrage over it is ridiculous. I love steam as much as the next guy, It’s the only launcher I use if I can help it.

    But Epic is finally the one giving them a run for their money, and someone being able to challenge the de facto monopoly is always a good thing in the end. The worst it can do to me is that I’ll have to add The Outer Worlds as a non-steam game…. OH NO, SO HARD! But even then I wait for games to be fully updated before buying them regardless, and they’ll be on Steam anyway by the time they are.

    And sure, Epic may be missing all of those features… But you know what Epic has that Steam doesn’t? The Outer Worlds, BL3, etc. Most people aren’t gonna care about what features a launcher has TBH, because if that was true, then the other launchers that compete with Steam on a features-level would be more popular. It turns out, all that matters is the games. Steam is only where it is now because it was the one that got the most games first, and thus got most of the base first. Epic knows this.

    Not defending Epic’s lack of features BTW, although I couldn’t care less, I don’t use the launcher anyway.

    But the vast majority of people are looking for basic features like reviews and mod support.

    Saying mod support is a “basic feature” like reviews is just plain wrong, mod support like the Steam Workshop is a luxury. How many games on Steam have workshop support? The vast majority of them don’t. And mod support is on the developer’s end of things really, not Epic’s. It would be nice one day for Epic to provide a similar tool for devs to use that allows them to easily distribute mods on the store sure, but expecting that as a “basic feature” when no other launcher has that either…

  26. Cuthalion says:

    I’m a month late to the party, but here’s some numbers just for fun.

    You mentioned Valve handled 2 exabytes (EB) of data last year. I’ll be assuming 1024 GB = 1 TB, 1024 TB = 1 PB, 1024 PB = 1 EB.

    CloudFront, the content distribution network (CDN) that Amazon owns, charges 2c/GB for US/CA and Europe after the 1st 5 PB, 4c/GB for China for under 1 PB (unknown for over 1 PB), and from 4c-12.5c/GB for other regions. These are monthly rates, but dividing 2 EB / 12 months still leaves about 171 PB per month to divvy up amongst the 9 regions, so it’s entirely possible they’re all getting 5+ PB/mo each.
    https://aws.amazon.com/cloudfront/pricing/?nc=sn&loc=3
    https://www.amazonaws.cn/en/cloudfront/pricing/

    Let’s assume that Steam’s download traffic were using the posted rates for CloudFront and that it averages to 4c/GB.
    $0.04 x 1024 x 1024 x 1024 x 2 = $85,899,345.92 for 2 EB of CDN downloads.

    Now, that sounds like a lot of money, and it’s only covering content downloads. It’s also assuming they’re using the CloudFront CDN to distribute game downloads, which may not be true. (Heck, I don’t even know if a CDN is the appropriate tool for the job.) But,
    1) These are based on the posted rates. A big company with a big commitment could probably get a better rate. Chinese pricing even shows “Contact us” instead of a price for >1PB/mo.
    2) They could be using another provider, a different type of service more efficient for what they do (are game downloads p2p?), or rolling their own. It depends what their “backup internet” actually is. It’s conceivable that any of these could save money.
    3) Valve was estimated to take in $4.3 billion in 2017. At a 20% cut (after payment processing and assuming the average purchase is on a game at the 25% cut tier), they get $860 million. If that is accurate and went up in 2018, then this CDN guesstimate would only be 10% of their revenue share.

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