epic store – Techdirt (original) (raw)

Stories filed under: "epic store"

The EPIC Effect: Microsoft Changes Revenue Split To Match EPIC Store, Steam Holds Firm

from the competition-is-amazing dept

Way back when Epic released its Epic Store PC game storefront, the release of this new competitor to Steam focused on two major selling points. The first was timed exclusives that it shelled out tons of money for, allowing it to sell games the public couldn’t get anywhere else for a certain period of time. This pissed off lots of people, as the public generally doesn’t like exclusives. That said, Epic did mention that it would end its exclusivity practices if the rest of the gaming storefront world, especially Steam, mirrored the Epic Store’s second key selling point, which was a far more favorable split offered to game developers than the “industry standard” 70/30 split that sees places like Steam getting nearly a third of game revenue just for hosting the game on its platform. Instead, Epic’s store has a 88/12 split, meaning the platform is willing to take less than half of the revenue Steam extracts from gamemakers.

In other words, Epic positioned its exclusivity program as merely a method to get the other storefronts to take less money away from game developers, which softened the blow with the public and surely made it a great many fans in the gaming industry.

Well, Steam hasn’t caved yet. But Microsoft did just announce that it is moving to match the splits offered by the Epic Store, marking some movement in the industry and perhaps an indication of things to come.

“As part of our commitment to empower every PC game creator to achieve more, starting on August 1 the developer share of Microsoft Store PC games sales net revenue will increase to 88%, from 70%,” Head of Xbox Game Studios Matt Booty wrote on the Xbox blog. “A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so.”

The move is the latest in a bit of a sea change for game revenues. In a survey released yesterday by the Game Developers Conference, only 3% of respondents thought the once-standard 30% take by a platform was justified. The Epic Games Store broke onto the scene by notably only taking 12% of the revenue. Over the last year, both Apple and Google have lessened their cuts for games making under $1 million. Steam, meanwhile, has held more or less firm on its 30% take, with the cut lessening the more money a game makes, a system that makes more money for larger, richer publishers, while penalizing smaller indies.

Funny what a little bit of competition can do. While it is certainly notable that Steam is watching all of these changes with its proverbial arms folded, doing no sort of splits-changing of its own, maybe that’s okay and maybe there’s a place for that. Or maybe the pressure continues to build and the Epic Store does end up being the preferred storefront for smaller titles and indie developers and Steam eventually does have to come down from the 70/30 split.

All I know for sure is that without Epic entering this arena and pushing the envelope, be it for altruistic reasons or otherwise, it seems unlikely that even Apple, Google, and Microsoft would have made any of these changes. That’s why, whatever you think of the Epic Store, the added competition certainly is nice.

Filed Under: competition, epic store, steam, video game stores, video games
Companies: epic, microsoft, valve

Platform Wars Update: Epic Store Losing $330 Million Per Year To Acquire Customers

from the oof! dept

It’s been a while since we’ve checked in on how the PC gaming platform war is going. If you’ll recall, the Spring of 2019 saw a new entrant into this ongoing battle, with Epic releasing the Epic Store. Epic’s plan appeared to be essentially a PR battle at first, drawing in the public by proclaiming that Steam’s revenue splits with developers and publishers were bad for the gaming industry and by drawing in publishers and developers with a better version of those splits for them. On top of that, Epic used those splits to gobble up a bunch of exclusive or timed exclusive releases of games, which ended up pissing off many in the gaming public and, of course, Steam. Then came Epic’s free game releases, where the platform worked out deals with publishers to offer up AAA game titles for literally no money as a method for getting gamers to adopt the platform.

All of this didn’t come with zero fallout from what Epic was doing, of course. The public doesn’t like exclusives generally. Crowdfunding got weird due to the exclusivity. And the launch of the Epic Store in the early days was not without its hiccups, either. Now that we’re 2 years on, how has this all shaken out?

Well, Epic is getting a decent chunk of market share with its tactics, even as the platform takes on major losses in doing so. The reason for those losses? Well, largely they have to do with all of those free games and timed exclusives. And we have Epic’s battle with Apple to thank for the information.

The raw numbers, as reported in a “Proposed Findings of Fact and Conclusions of Law” document Apple filed last week, show massive incurred and projected losses for Epic’s game download hub, which launched in late 2018. Documents and testimony from Epic itself show a 181millionlossforthestorein2019andprojectedlossesof181 million loss for the store in 2019 and projected losses of 181millionlossforthestorein2019andprojectedlossesof273 million in 2020 and $139 million in 2021.

You might think Epic is incurring those losses because it only takes a 12 percent cut of third-party game revenues, compared to the industry-standard 30 percent cut on other digital storefronts. On the contrary, though—in its own court filings, Epic says that 12 percent revenue chunk has been “sufficient to cover its costs of distribution and allow for further innovation and investment in EGS.”

The main driver of EGS’ losses, instead, is Epic’s generous program of “minimum guarantees.” These encompass the advance payments Epic has used to attract so many timed exclusives to its storefront and seemingly also cover the free games Epic makes available to Epic Games Store users every week.

Now, while this isn’t precisely the type of method for using “free” as part of a business model as we’ve talked about in the past, it’s close enough to count. The upshot of all of this is that commentary from Epic’s folks makes it clear that they’re well aware of these monetary shortfalls… and are largely just fine with them. The whole point of all of this is to make as big a dent in market share in a short time period as possible. And, of the two ways Epic saw to do that, taking on initial losses like this was the better option.

“There are two ways to bring users into something,” Epic Games co-founder and CEO Tim Sweeney told Ars in 2019, just after the launch of the Epic Games Store. “You can run Google and Facebook ads and pay massive amounts of money to them. But we actually found it was more economical to pay developers [a lump sum] to distribute their game free for two weeks… We can actually bring in more users at lower cost by doing all these great things for great people rather than paying Google and Facebook.”

That effort is starting to work. Last June, Sweeney told PC Gamer that EGS had about 15 percent of the PC gaming market. That’s not great, but it’s not bad considering the near-monopoly power Steam has in PC gaming downloads (Sweeney estimated Steam’s share at 90 percent in 2019, though that could be a bit inflated).

In court documents, Epic went on to note that it expects its storefront to start turning a profit in 2023, so it looks like it has some runway there as well.

So, what does this all mean? Well, at the very least it’s an interesting experiment in using free loss-leaders to gain customers and give them reasons to buy elsewhere on the platform. Epic hasn’t pulled some magic trick to suddenly unseat Valve’s Steam platform as of yet… but it’s also apparently playing the long game here.

Filed Under: epic store, platform wars, steam, video games
Companies: apple, epic, valve

from the free-as-in-advice dept

The Epic Store is still around, still rocking its exclusivity deals with game publishers, and is still trying really hard to unseat Valve’s Steam as the dominant PC gaming platform of choice. Truthfully, the news about the ongoing battle between Steam and Epic has sort of quieted down. That ultimately is probably not a good sign for Epic. If there is unseating to be done, it’s going to have to be done loudly, publicly, and with much coverage in the press.

Which is perhaps why Epic recently decided to strike a deal with Rockstar to give away Grand Theft Auto 5 for free. Yes, free as in you pay no money and yet own the game forever. Rockstar’s reasoning behind this is quite easy to understand: the company already made a hilarious sum of money selling the game for nearly a decade and the game’s ecosystem and players have since moved into the online MMO realm where the game now makes hilarious sums of money via microtransactions. More players means more revenue for Rockstar.

And for the Epic Store, this is sort of free game is a great way to entice gamers to your store, gin up a chunk of new user adoption, and really show the public how great your PC games store performs–, oh son of a bitch.

The Epic Games Store went offline on Thursday morning as users anticipating the launch of Rockstar Games’ Grand Theft Auto 5 for free on the platform overloaded its servers. News of the game’s free release leaked early on Wednesday on the Epic Games Store Twitter account.

The website and launcher both went down just before 11 a.m. EDT, when the Premium Edition of the game for Windows PC was scheduled to go live. “We are currently experiencing high traffic on the Epic Games Store,” Epic Games said on Twitter.

On the one hand: yay, the strategy worked and tons of people flocked to the Epic Store to get the free game. On the other hand: crap, the strategy also backfired, because now a whole bunch of people’s first impression of the store is that it’s unstable and cannot support the public demand. Whoops.

This seems to be something of a trend for Epic. Great on the marketing and PR messaging, much less great on the execution. And quite frankly, it’s not as though Epic shouldn’t have known it was going to have a stampede on its hands.

Despite being six and a half years old, GTA 5 is clearly still popular. It goes beyond just the game being available for free, too: 2019 was one of Rockstar Games’ best sales years for GTA 5. GTA 5 was initially released in September 2013 on PlayStation 3 and Xbox 360, and again in 2014 on Xbox One and PlayStation 4. In 2015, it came to Windows PC. With the PC launch, the game found a new audience with the modding scene and in Grand Theft Auto Online. The game’s popularity on Twitch ballooned in the past year with role-playing servers in GTA Online.

Now, as of the time of this writing, 2pm CST, the problems seem to have been fixed. I know this because I went and got the game for free myself, even though I already own it on my console. And, while this was my first time on the Epic Store myself, you’ll have to go elsewhere for my take on how good or bad the store itself is.

But as for this marketing strategy by Epic? I give it a meh.

Filed Under: epic store, gta 5, overwhelmed, video game stores, video games
Companies: epic, rockstar

Tales From The Platform Wars: Steam Dev Says Calling 'Metro Exodus' Epic Exclusive Unfair Wasn't Intended To Incite

from the riiiiiiight dept

With us now getting on into nearly a year of the new PC gaming platform war between Valve’s Steam platform and the Epic Store, you might have forgotten how this all got kicked off. Before Epic pulled a Healthcare.gov with its platform release, and before crowdfunding efforts to fund PC games began taking a hit, and even before this whole thing transformed into mostly a PR war being fought with the PC gaming fanbase, there was Metro Exodus. The game was the first major title to announce an Epic Store exclusive deal for 6 months and that announcement came shortly after the game also became available for pre-order on Steam. This, understandably, pissed off a great many people. Including, it seems, the folks at Steam, who put out a statement on the game’s page. The results were as predictable as the sun rising in the East.

On Monday, the latest game in the series, Metro Exodus, became an Epic Games Store exclusive, prompting Valve to call the sudden departure “unfair to Steam customers.” For some Steam users, that’s served as a rallying cry. This has led to sustained outcry in the form of everything from review bombs of previous series entries Metro 2033 and Metro: Last Light to irate comments on every possible social media post associated with the game.

The review-bombing kicked off almost immediately and continued for days. And not just on that game’s page, but on game pages for other Metro titles. Then, as other games went Epic exclusive, the review bombing continued, even after Steam put some tepid efforts in place to remove such review-bombs that were not relevant to the game itself.

Again, this was entirely predictable. Valve isn’t made up of stupid people and this was widely seen as an effort to weaponize the Steam community to punish game publishers that chose to go with Epic. It’s difficult to see it as anything else. That hasn’t stopped some folks at Steam from trying to pretend otherwise, however.

Speaking to Kotaku during a Valve event in Seattle last week, Steam business developer and designer Nathaniel Blue said the company did not intend to legitimize the outsized backlash to Metro Exodus’ Epic store exclusivity when it put a comment on that Steam page. The use of the word “unfair,” he said, was meant to reference the timing of the announcement rather than the entire concept of exclusivity.

“I don’t think that was our intent to upset people,” Blue said. “It wasn’t the intent of the message. It was more about the timing. The game was about to launch, and then it was [exclusive to the Epic store]. So that was the only goal of that. What came out of that was not what we expected. It wasn’t meant to be this lightning rod.”

The integrity of this specific developer aside, this is flatly unbelievable. The best that could be said here is that the entirety of the Valve team that had any hand in posting the message to the Metro Exodus was laughably out of touch with the gaming community. Frankly, that’s not something I would want to be admitting to if I were Valve. More likely is that Valve knew exactly what it was doing, but perhaps didn’t expect the backlash to be quite so severe. So severe, in fact, that it created problems for Steam devs themselves, who suddenly had to figure out how to combat these review-bombs to save face with the gaming industry as a whole.

It is worth noting here that Valve has refrained from commenting similarly on any other Epic exclusives.

“I don’t know that we’d go back in time and change it necessarily, but I can say that in the future we didn’t say anything,” he said. “In the future we didn’t continue to do that because our goal is not to upset the community or light anyone’s hair on fire. Our goal is to get developers close to customers, have a really valuable place for people to play games, and stay focused on that.”

There is plenty of room for disagreement on what Epic’s entry into the marketplace, and its specific tactics, means for the gaming industry as a whole. That being said, this claim by Valve doesn’t ring true.

Filed Under: epic store, exclusives, metro exodus, platforms, steam, video games
Companies: epic, valve

Another Bad PR Sign: Indie Developer Shuns Epic Store, Saying 'My Word Means Something'

from the oof dept

We were just discussing how there are some cracks starting to show in the PR war that Epic decided to kick off when it initiated the PC gaming platform war against Steam. Part of the problem Epic has is that, despite its attempt to frame its exclusivity deals as some attempt to heal a broken PC gaming industry, the public very clearly isn’t buying it. It’s gotten bad enough that publishers that buy into Epic’s exclusive deals are proactively messaging publicly to the gaming masses that they would prefer not to be the target of widespread harassment.

That, honestly, is bad enough to warrant concern by the industry as a whole. But when indie developers begin coming out publicly to refuse an Epic Store agreement, and frame that decision as a moral choice, the problem has only deepened. Wlad Marhulets is the solo developer behind Darq, a horror game released recently. He got an email from Epic seeking to sell the game on the Epic Store. Marhulets read the email and its request for an exclusivity deal, then he took a look at all the backlash other publishers have faced for entering into that agreement, and decided that he would be breaking his word to the public by entering into such a deal.

After asking whether Epic Games’ offer necessitated exclusivity, and hearing that it did, Marhulets turned down the deal before even discussing money. Darq had been on Steam since November, 2018, and is also for sale on GOG. The horror adventure game was within the top 50 most wishlisted games on the platform before launch. “I felt going for an exclusivity deal would show that my word means nothing (as I just had promised the game would launch on Steam),” wrote Marhulets on Reddit. The positive response from fans was huge.

To be clear, you can think that what Epic is doing is truly good for the industry while also acknowledging that stories like this show pretty clearly that Epic appears to be losing the PR war it decided to wage. Again, the public is not on the side of exclusivity in exchange for higher splits for publishers. It would honestly likely be much different if Epic offered its splits without the exclusivity. In that case, the messaging would be: “You can buy it on Steam and screw the gamemaker, or buy it on our platform and benefit them. Your choice.” In that case, the moral case is much more clear than when Epic attempts to limit consumer choice the way they have.

This is shown to be all the more the case when looking at how fans have reacted to Marhulets’ messaging.

Darq’s Steam comments are dominated by grateful messages from fans and some derision for Epic. “I purchased a copy of DARQ to support this fine developer’s ethical business practices. Thank you for keeping your promises and taking a stand against store exclusivity. The world needs more folks like yourselves,” wrote one. “Support devs who keep their promises and stand up against evil. It also happens to be a great game so.. what are you waiting for?” said another.

If Epic wants to be as idealistic as it claims, it can have its profit splits and cool it with the exclusivity. The way this is going, it is starting to feel clear that this isn’t a war Epic is going to win long term anyway.

Filed Under: app stores, darq, epic store, exclusives, video games, wlad marhulets
Companies: epic