15 ms·

Valve creates new revenue sharing tiers to give big sellers a break

156 points by 2calazm 8y ago

beerlord 8y ago
I feel uncomfortable that smaller developers will be less profitable because they... don't have as much negotiating power? Valve is being very Walmart-esque with this move. Already game developers are the lowest paid workers in the IT industry - and a lot of it has to do with the huge revenue shares ('platform taxes') charged by the monopoly platform holders. I'm not arguing against any change, it just seems spiteful that Valve are sticking it to the little guys who can't go anywhere else. If those tiers ($10m and $50m to reach 25% and 20% respectively) had a zero removed from them, I would be more understanding. This could have been a great chance to improve Steam overall, by reducing the commissions for all developers (in order to fend off a future Epic store - one undoubtedly tied into UE4, and probably with a 12% commission, based on statements from Tim Sweeney), and increasing the quality on the low-end slightly with a Steam Direct fee increase from $100 to $500.
- rochak 8y ago
  That will be sad since most of the games I buy are from indie developers. They put good amount of work in their games and don't charge much too. If Valve keeps doing this kind of stuff and forces them to move to other marketplaces, I will move too.
  - zeroname 8y ago
    If you look into it you will find that you can buy many indie games directly from the developer and still get a Steam key. If you don't want that Valve charges "too much" from indies, then you should be proactive and join other marketplaces. It's a hen-egg situation.
  - giobox 8y ago
    Just move already! Indie games are much easier to obtain from rival storefronts than big budget releases, and can usually be had with better terms (DRM free etc, like gog.com). It’s relatively rare for an indie developer to distribute exclusively via Steam.
- philjohn 8y ago
  On the other hand - the big publishers need Valve less, so from a purely business perspective it makes a ton of sense to keep them on the platform, which is the biggest storefront for purchasing games. Yes, smaller developers have to pay more, but they're getting a heck of a lot of exposure for that take, without having to spend big on traditional advertising like the large publishers have to.
  - beerlord 8y ago
    That is unfortunately not correct. A large amount of advertising and PR is very necessary to receive any attention for a launch on Steam. Unfortunately a mere 'launch' on Steam has been devalued, by Valve allowing anyone with $100 to launch on the platform (and the majority of the launches on Steam are very low quality as a result). If you want to make a middle class income from launching games on Steam, you will need to become very familiar with online advertising. Have a look at the Positech blog for details. Indie devs are now realising why the big studios spend 30% of their budgets on marketing... Of course, it all gets a bit easier once you have an existing profile, an existing fan base, etc.
    - zeroname 8y ago
      It's not just lack of marketing, it's the fact that there are now far more games, but gamers have neither more money nor time to compensate. There are too many game developers, it's as simple as that. Too many millennials don't want the regular old "grown up" jobs anymore, they want to be creatives or artists and the market just can't soak them all up. If you think it's hard as a game developer, try living off painting or sculpture or music or literature. The vast majority never get there. Meanwhile, a game programmer at least has ordinary programming jobs to fall back on - if they can stomach it.
      - slfnflctd 8y ago
        I don't know how they do it, honestly. Back in the day, when things were simpler, being a game dev sounded pretty cool. Now? No thank you. Lower wages, longer hours, much more difficult work, and 'fans' who continuously insult you in the worst possible ways no matter what you do... sounds like a nightmare. If I'm going to go the creative route I think I'd be happier on the sidewalk with a guitar. Career-wise, I would much rather help a middle manager figure out how to best crunch the data on their quarterly reports. It can actually be more interesting than it sounds on the surface, and if you're competent everyone's happy at the end.
- zeroname 8y ago
  > Already game developers are the lowest paid workers in the IT industry That is not true if you factor out all the people developing games independently on their own dime, against better financial advice. To counteract that, there just aren't enough developers working on enterprise Java architecture for no money, out of passion. It's also only fair that people who get to work on "fun" things like games are paid less. If they don't think it's fun, they can switch industries and earn more. Nobody is doomed to be a game developer. > I'm not arguing against any change, it just seems spiteful that Valve are sticking it to the little guys who can't go anywhere else. The little guys can go to itch.io, which charges as low as 0% commission. They may even have more visibility on there than on Steam, given that it's a smaller pond. There's also the Humble Store, which leaves commission up to the buyer. > This could have been a great chance to improve Steam overall, by reducing the commissions for all developers... They did reduce commissions for everyone by 5%. The extra 5% is for those who are at risk of moving off the platform because they can create their own visibility.
  - beerlord 8y ago
    See for yourself: https://insights.stackoverflow.com/survey/2018/#salary https://insights.stackoverflow.com/survey/2018/#salary > The little guys can go to itch.io, which charges as low as 0% commission. They may even have more visibility on there than on Steam, given that it's a smaller pond. There's also the Humble Store, which leaves commission up to the buyer. Steam has a monopoly. There is no alternative for anyone with revenue below $10 million (hence this change). Itch.io yields about 1% of the revenue of Steam. The best you can do is sell Steam keys direct from your website, using the Humble Widget which charges 5%. However you will suffer from reduced visibility on the Steam store (since visibility is based on sales). > They did reduce commissions for everyone by 5%. No, only once a game reaches $10 million of total sales revenue.
    - suby 8y ago
      > (since visibility is based on sales). This is a point I don't see mentioned often enough. I've wondered in the past if it's actually better to forego every other platform in order to increase visibility through Steam. Higher sales means that Valve will promote you more, which may offset whatever revenue you'd be generating from sources like itch.io. Would be interested to hear if anyone has any opinions or idea about this.
- deleted 8y ago
  [deleted]
- simias 8y ago
  >Already game developers are the lowest paid workers in the IT industry - and a lot of it has to do with the huge revenue shares ('platform taxes') charged by the monopoly platform holders. I'm not convinced. IMO game developers are lowest paid because it's one of the rare segments of software development where there are no shortage of applicants. It's glamorous, all the kids want to make video games when they grow up, it's more rewarding to tell people that you've been working on the latest Red Red Redemption than that you've been debugging an SPI driver all week. So you end up with an industry with a lot of turnover because they mostly hire hopeful young devs, underpay and overwork them until they burn out. And then you have 10 new freshly graduated folks waiting to take their place. I seriously doubt that things would be massively different if platforms where cheaper or more open. I mean, AAA studio like Rockstar are known for their terrible working conditions, I don't think that's because of "monopoly platform holders".
mentos 8y ago
As an indie dev this is great news for me. Hoping Valve may come around and just drop the share to 20% for everyone eventually and then I won't have to forgo a salary to keep my 4 person studio alive.
- beerlord 8y ago
  Valve have shown that they will do nothing unless their hand is forced. Your best bet is an Epic Store, which will hopefully charge commissions of 8-12%. https://www.neogaf.com/threads/tim-sweeney-not-sure-why-steam-is-still-taking-30.1422584/ https://www.neogaf.com/threads/tim-sweeney-not-sure-why-stea... https://www.theregister.co.uk/2018/08/29/app_store_duopoly_30_per_cent/ https://www.theregister.co.uk/2018/08/29/app_store_duopoly_3... Valve and the other large platform holders know that if they abandon 30%, there is no going back. Over time that 'platform tax' will get pushed lower and lower, until it basically reaches the marginal cost of transacting the sale and bandwidth. They are trying to hold that off as long, long as possible. At this rate it could be 100 years though.
  - whydoineedthis 8y ago
    1 decade down and iTunes hasn't budged. I suspect your 100yr timeframe is close
    - Praxish 8y ago
      Maybe not 100 years but substantial time. More likely, we need a platform transition as an inflection point that creates oppty for new market entrants. Part of new entrant's disruptive value prop may be better rev share terms.
    - giobox 8y ago
      If we stick to software and not tangent to movies/tv (itunes), Apple have absolutely moved some on this issue, since 2016 the App Store now offers 15-85 revenue shares for subscriptions once the user has subscribed for over a year. Sure it’s slow progress, but it is progress. > https://www.macrumors.com/2016/06/08/apple-major-app-store-changes/ https://www.macrumors.com/2016/06/08/apple-major-app-store-c...
seanalltogether 8y ago
Some of the big publishers have been requiring user accounts on all their AAA games sold through steam, so I think Valve knows it won't take much for these guys to switch to exclusive sales through their own platforms if Steam becomes too costly.
- scoot_718 8y ago
  Is that what's behind that crap? Too many games require some fucking account I don't care about, when it should be linked to steam.
  - jamp897 8y ago
    Yes, it’s also because platforms control what you can expirence, and if they feel it competes with their platform in someway they disallow it. So studios aren’t going to tolerate that going forward.
franknine 8y ago
This is definitely going for big AAA publishers. As Activision moved their latest Call of Duty from Steam to Battle.net, there are only Take-Two and Square Enix who haven't rolled their PC store.
- Crosseye_Jack 8y ago
  Take-Two do have their own store iirc or at least rockstar does. What they don’t have is an app where you can easily and simply download and install any game tied to your account. I have GTAV from them directly and it can be a chore remembering where the actual download button is for the installer on their site. EDIT: For the shits and giggles of it I tried to stumble across the installer for gtav on rockstargames.com - This isn't my first time But I always forget because I don't actually install the game that often (once its installed it normally stays installed until I nuke my system). First I thought, I'll make sure I'm logged in so I did that, There is a hover menu over my avatar now So I check that and follow profile and settings as none of the others seem to be linked to "let me download my game". But nothing in there links to to downloads. OK return to rockstargames.com because there was a downloads button on the header banner. Click... click on gtav and it prompts me for who I want to by the game from. so I select rockstar warehouse because that's who I brought the game from. It now prompts me to buy the game. Oh but I am no longer signed in. Arrr differnt domain name, that will be why. So I sign in, atleast this time I don't have to do a recaptcha to sign in as it did manage to figure out i'm signed in from rockstargames.com. Ok, it bounces me back to the warehouse home page instead of the page I was just at. I can not click on my username, So I try clicking Digital Downloads, Select "Grand Theft Auto V" as I'm sure that the one of the 6 SKU's they have for the digital copy of the game. And its prompting me to purchase the same. So I scroll all the way to the bottom and select "Digital Downloads" under shopping support. > How do I download my purchase? > You can download by either clicking the Download button on the Order Details page or by right-clicking on the Download button and clicking Save Target As in Microsoft Internet Explorer or Save Link As in Mozilla Firefox. Do not rename the download file as this can cause installation problems. Ok so I do that, There is my order but no download buitton. Ok... Lets check that support doc again. >I want to re-download my purchase, but the Download button is gone. >There are a couple reasons why you wouldn't see a button (where there previously was one) to download your purchase. If the order is older than 30 days, then the download period has expired. Well that's frustrating, BUT I know it can be done but I've done it a few times in the past. Fuck it, I'll do what I should of done in the first place (apart from "should of brought it on stream) I'll ask Google. http://lmgtfy.com/?q=How+to+I+redownload+gtav+on+pc http://lmgtfy.com/?q=How+to+I+redownload+gtav+on+pc 1st link is quora, 2nd is rockstar support, Well I'll give rockstar a final chance before relying on 3rd parties to help me and click the support.rockstargames.com link. >...or download from the GTAV PC Social Club Activation page. Clicks the link, BOOM there is my download. But wait, I thought I clicked the social club before. Clicks my avatar, OH NOW THERES A BIG BUTTON SAYING "Game Downloads" which isn't present when you click on your avatar from rockstargames.com
acomjean 8y ago
This makes sense. the share drops to 25% after 10 million in sales. and more after. One would imagine that there is some fixed cost for adding new titles and maintaining steam store. After a certain amount of sales the cost per title is just bandwidth so steam is making more per game anyway. Its also a hedge to prevent every large game seller from setting up their own store. Even if you are large its cheaper to use steam.
- jsheard 8y ago
  > Its also a hedge to prevent every large game seller from setting up their own store. That ship has already sailed - EA has Origin, Ubisoft has Uplay, Activision/Blizzard has Battle.net, Microsoft has the Windows store, and Bethesda and Epic have their own launchers. Nearly every major publisher has already made the investment to develop their own store and digital distribution infrastructure, so they have little reason to pay the Steam tax now.
  - ksec 8y ago
    Are any of those you mentioned popular with Gamers though? I only ever hear Steam in gaming. What do you mean by own launchers? Surely not a Store right? Is Battle.Net a "Store"?
    - fromthestart 8y ago
      At least some of these games are only available through non steam launchers. E.g. Overwatch only launches from battle.net.
      - jsheard 8y ago
        It's pretty common for AAA games to not be available on Steam now. Blizzard never used it, and EA, Activision, Microsoft and Epic have pivoted to releasing exclusively on their own platforms. Ubisoft still releases on Steam but requires Steam buyers to install and log into Uplay regardless, which feels like preparation for abandoning Steam once enough users have Uplay installed.
jamp897 8y ago
Many larger studios are working on self publishing and have projects in the works. The percent that Valve takes even at 20% is still too high, but the bigger issues is that Valve locks up your users so when you make your next game you have to reacquire them, ownership of ones users is the key due to this issue. We’ll see how they fair over the coming years but this does look like they’re starting to wake up a bit to how unhappy execs have been with Steam stagnating and reaping 30% still.
- Praxish 8y ago
  As an entrepreneur in this space, I'd be okay with 20%. The issue is the current thresholds. I'd want it to be 20% over $1M not $50M. Around a million it starts being worth it to handle credit card processing, chargebacks etc.
  - jamp897 8y ago
    As there’s more competition from studios entering the publishing space you should be able to get a better deal, with better and more current tech. The up side is Steam gives you visibility to a large player base with new publishers won’t have on day one, but it’s coming.
    - deleted 8y ago
      [deleted]
PakG1 8y ago
I actually am surprised that services like Steam, the Apple App Store, and Google Play are able to command as high a margin as they do for sales commission. I mean, it's obviously possible because it's reality, but it's nonintuitive. I wonder if it will continue to be that way. For iOS, you don't really have a way to install apps outside the app store without jailbreaking, but you do for macOS, and I've seen a number of high-profile macOS titles decide they're not going to sell on the App Store anymore. That's gotta damage the moat somehow and thereby damage the App Store's ability to maintain its commission margin (eventually?). I wonder what it would take to get that to happen on the iOS side. So long as the iPhone remains a market leader, I guess I don't see anything changing.
- methodover 8y ago
  > I am surprised that ... are able to command as high a margin as they do for sales commission. Yep. Me too. I’ve long thought that Steam charges way too much considering the platform. There would seem to be tons of room for a competitor to undercut Steam. I’m excited about Discord’s new store. Revenue share is a killer for a business, especially as one as volatile as computer games. Any game needs to be 25% better than it otherwise would have been because of Steam’s revenue share. Does it really bring that much to the table? In 2018? Enough to justify their absolutely enormous cost?
  - tylerl 8y ago
    There's a GDC talk about this (up on YouTube, can't remember the title) about the cost/difficulty going alone vs going through steam. The tldr is that valve apparently knows exactly how much it costs you to run this apparatus yourself, and the rev share reflects that reality. The numbers are apparently really close. The catch is that as you sell more units, the cost of the apparatus starts to diminish as a percentage of revenue, so running your own marketplace starrs to make sense when you get into the blockbuster territory. This pricing update apparently takes that fact into account, which means that when companies start running the numbers on their new game launch, the justification for building their own marketplace starts to go away.
campercoder 8y ago
Thats great.. charge big companies less. :(
simplysimple 8y ago
So Valve is giving breaks to the big developers/publishers that don't even need them?
- zyx321 8y ago
  Maybe not need them, but want them. EA and Ubisoft both launched their own competing platforms, so they have a lot of leverage to negotiate with.
  - simplysimple 8y ago
    Then they should lower rates across the board. There used to be a time when "just being on Steam" justified the high cost to smaller developers, but the market is over saturated now because they don't curate anymore that it isn't the case.
    - icebraining 8y ago
      So where would a small developer launch nowadays? As far as I can tell, they're still on Steam, so they disagree with you that the cost is not justified.
      - simplysimple 8y ago
        Sony has been friendly to indies during the PS4 generation. Nintendo was especially good for indies in 2017 and is practically giving away development kits. Even EA is becoming increasingly friendlier to indies on their Origin platform. Steam has brand recognition for developers, but that is changing with competition.
- michaelmrose 8y ago
  People who bring in more sales are worth more money it's not shocking that they get a better deal. It's like saying capital one gives air miles to people who don't even need them. Well ya. It's not a gift it's purely mercenary.
- 8y ago
Zelmor 8y ago
Valve's cuts are fine. I remember the times when developers were glad if they got 20-30% of the profits in general, with publisher deals starting at 70% cuts for IP-first game releases, and way higher if it was your first game. This after you pitched the game with a tech demo running, of course. Steam is a blessing on digital distribution, and the most competent platform to date, albeit it has its problems.
- qasdf 8y ago
  A friend of mine released a game that sold around a million copies in the late 90s or early 2000s sometime and had a deal like that. Except the publisher claimed that after all the distribution and physical costs the profit of the game was 0 and so he never got any money from his profit sharing agreement. Steam and online distribution in general is a godsend.
  - maxxxxx 8y ago
    https://en.wikipedia.org/wiki/Hollywood_accounting https://en.wikipedia.org/wiki/Hollywood_accounting
- wmf 8y ago
  publisher deals starting at 70% cuts But didn't those publishers pay development costs? I've seen a lot of people comparing publishers and retailers (which is what app stores are) without understanding the differences.
  - kevingadd 8y ago
    publishers funded development, did advertising, provided QA and often localization services, and manufactured physical products. Valve runs a CDN and forces you to have a forum for your game that you moderate yourself, and runs a support service that issues no-questions-asked refunds of your title after players played it for upwards of 2 hours, which come out of your profits. They do offer some useful APIs like Steamworks but those break randomly and have no devrel or customer service because Valve hates developers. So in practice, you're not getting much useful for your 30% - CDN, launcher, updater, payment processing, achievements. everything else they offer is buggy or actively unwanted. Valve clearly recognizes at this point that developers don't like the service they offer for the 30% and that more importantly, big publishers can easily just go their own way. When that Valve cut is millions of dollars it's very easy to justify running your own storefront even if you sell fewer copies, because those Steam units sold come with huge negative effects - forums toxicity, buggy platform APIs, no-questions-asked refunds, review brigading, etc. Context: Shipped a couple titles on Steam, one 500k+ sales. In one case we did extensive Steamworks integration (weeks of dev time) and actively regretted it. If I had a solution for the exposure problem (Steam still gives you way more potential sales even though it sucks now) I would go my own way in a heartbeat. Steam isn't worth 30%.
stillmotion 8y ago
This should link to the original source: https://steamcommunity.com/groups/steamworks#announcements/detail/1697191267930157838 https://steamcommunity.com/groups/steamworks#announcements/d...
georgeecollins 8y ago
Part of the reason why this is happening is because Twitch and Discord are going to compete for this market. This is good news for game developers and I am glad Steam is doing it.
- spir 8y ago
  Came here to say this. 15 years of Steam monopoly is coming to, well not an end, but a transition point. Great news for game devs!
newnewpdro 8y ago
It seems obvious to me that Valve should have a micro tier for the small indie space, by effectively making everyone else subsidize them. Something like 5% until crossing $30,000 in revenue. This can be a life-changing difference for individuals couchsurf-hacking while trying to break into the game industry on their own; 28.5k vs. 21k. I highly doubt this would move the needle at all on Valve's end. Do they already have anything like this or are the little guys paying the ~30% I see being thrown around?
Zren 8y ago
* First $10M = $3M Valve + $7M GameDev * Next $40M = $10M Valve + $30M GameDev * Next $50M = $10M Valve + $40M GameDev Assuming your game is expected to generate $50M in revenue, is giving up $13M (26% of revenue) for bandwidth + servers + store handling credit card info + credit card fees + technicians + support staff worth it over rolling your own? Or $23M if it's expected to make $100M?
- spatz 8y ago
  > for bandwidth + servers + store handling credit card info + credit card fees + technicians + support staff You're forgetting exposure and huge player base. That's got to add some revenue...
  - lione 8y ago
    Exposure is key, I know I don't buy games that aren't on Steam. So many games I wouldn't know about at all if they weren't on steams recommendations page.
  - FooHentai 8y ago
    Not so much for the games that are hitting those revenue levels, as they already have mind share far greater than you get from being on Steam. It's a game changer for smaller and unknown developers to be findable on the steam store. Once you're a battlefield/witcher/fallout etc, you just don't need it.
- swift532 8y ago
  Don't forget exposure and people like me who can't be bothered to buy a game if it's not on Steam or GOG.
adamrezich 8y ago
I don't know if anyone's noticed the unprecedented price-slashing that's been happening in AAA games this year but I think we may be in for another AAA game crash. For indies I don't think it's much better unless you're one of the Big Names in that space. (Incidentally, getting into making games professionally through any means other than self-funding seems basically impossible at the moment.) Any other perspectives on this?
- zanny 8y ago
  Despite how the industry likes to try to pitch it games aren't as disposable as developers want you to think they are. At least for me, I'm spending more time playing titles I've owned for years today than on new releases. And every year adds more games to that backlog / history of games to get around to. And some games never get old - I still revisit probably twice a year Quake and Doom (the original) to play all the new community map packs and mods for a week. There really needs to be some sea change in the industry away from disposable properties and towards ongoing refinement and iteration on proven titles. I'm sure publishers would love it - there is a lot less investment risk if you can establish regular revenue from game updates like how MMOs work - but the consumers have for the longest time seen value in gambling how good a new title in a series will be over seeing the last one just made better over time.
  - user5994461 8y ago
    +1 on that. There are more games than ever. New games are competing against other new games while also competing against every old release of every game, on sale at a huge discount. There is no time and no money for all. Much worse than that, there is no more groundbreaking innovation in technology. 20 years ago there was the move from 2D to 3D. 10 years ago came realistic 3D with facial expressions and destructible environments. Today call of duty cannot be distinguished from last decade call of duty.
- gnarbarian 8y ago
  It's not across the board. Red dead redemption 2 is a huge hit. The big launches which are failing and getting lots of press (fallout 76, and battlefield V) are doing so because of anticonsumer practices. In the case of fallout 76, the game is so buggy nobody wants to play it. Plus, launching fallout 4 after people were wrapping up Witcher 3 really put things into perspective as to how far behind Bethesda is compared to CD project red. Side by side fallout 4 was garbage. As for Battlefield V. I've been a die-hard battlefield fan since BF 1942, I played the BFV demo and it proved to me that they are continuing to move backwards. Pay to win microtransactions and even less destructible environments show that they are dead set on destroying the mechanics which make battlefield fun and alienating their core customers. Perhaps they are doing this in a misguided attempt to capture some of the fortnite/call of duty market but instead they have sacrificed their core customers in an attempt to entice people away from games they are perfectly happy with. Then they top it off by sanctimoniously insulting their customers and telling us not to buy it if we don't like their changes.
shmerl 8y ago
They should have given even a bigger cut to those developers who release Linux versions. It would be a good incentive to push more of them releasing for Linux.
ksec 8y ago
So what exactly is "Valve" now without Steam? They don't have new games any more ( And none of the the "newer" ones were anywhere as good as CS ). They don't improve or compete in Game Engine any more, which they did in the Golden Era between Unreal, DOOM, and Source. What have they got left? Steam OS and Gaming Machine got no where. HTC Vive doesn't look like they can compete with Sony or Oculus.
- doyoulikeworms 8y ago
  Valve is still a quite an admirable game studio. Not only do their top games CS:GO and Dota 2 have large and healthy player bases, but they also have large and vibrant competitive scenes. I don’t compare Valve to the likes of Nintendo or Bethesda anymore wrt game development, but instead to companies like Riot and Blizzard. These studios revolve around franchises-as-services and don’t release new IP often. Their core games are pillars of the competitive, casual, and streaming games scenes. I do miss the days of more frequent releases, though. Hooray for Artifact!
  - ksec 8y ago
    > but instead to companies like Riot and Blizzard. But both Riot and Blizzard is like 10 times larger than Valve. And has games and franchise that is sustainable business if the worst happens in the next 10 years. Does having CS:Go and DOTA only enough to feed them? I mean even DOTA 2 is like 5 years ago already. And Artifact doesn't seems like a hit at all.
  - bytematic 8y ago
    Haha Valve comes nowhere close to Blizzard or other developers. Blizzard at least updates their most popular games more than once every 6 months and doesn't leave them to die.
- wingerlang 8y ago
  They have 2 upcoming games listed on their website (https://www.valvesoftware.com/en/about https://www.valvesoftware.com/en/about) and 3 'ongoing' games. They have also stated they are working on 3 full-length VR titles.

156 points by 2calazm 8y ago

I feel uncomfortable that smaller developers will be less profitable because they... don't have as much negotiating power? Valve is being very Walmart-esque with this move. Already game developers are the lowest paid workers in the IT industry - and a lot of it has to do with the huge revenue shares ('platform taxes') charged by the monopoly platform holders. I'm not arguing against any change, it just seems spiteful that Valve are sticking it to the little guys who can't go anywhere else. If those tiers ($10m and $50m to reach 25% and 20% respectively) had a zero removed from them, I would be more understanding. This could have been a great chance to improve Steam overall, by reducing the commissions for all developers (in order to fend off a future Epic store - one undoubtedly tied into UE4, and probably with a 12% commission, based on statements from Tim Sweeney), and increasing the quality on the low-end slightly with a Steam Direct fee increase from $100 to $500.

rochak 8y ago
That will be sad since most of the games I buy are from indie developers. They put good amount of work in their games and don't charge much too. If Valve keeps doing this kind of stuff and forces them to move to other marketplaces, I will move too.
- zeroname 8y ago
  If you look into it you will find that you can buy many indie games directly from the developer and still get a Steam key. If you don't want that Valve charges "too much" from indies, then you should be proactive and join other marketplaces. It's a hen-egg situation.
- giobox 8y ago
  Just move already! Indie games are much easier to obtain from rival storefronts than big budget releases, and can usually be had with better terms (DRM free etc, like gog.com). It’s relatively rare for an indie developer to distribute exclusively via Steam.
philjohn 8y ago
On the other hand - the big publishers need Valve less, so from a purely business perspective it makes a ton of sense to keep them on the platform, which is the biggest storefront for purchasing games. Yes, smaller developers have to pay more, but they're getting a heck of a lot of exposure for that take, without having to spend big on traditional advertising like the large publishers have to.
- beerlord 8y ago
  That is unfortunately not correct. A large amount of advertising and PR is very necessary to receive any attention for a launch on Steam. Unfortunately a mere 'launch' on Steam has been devalued, by Valve allowing anyone with $100 to launch on the platform (and the majority of the launches on Steam are very low quality as a result). If you want to make a middle class income from launching games on Steam, you will need to become very familiar with online advertising. Have a look at the Positech blog for details. Indie devs are now realising why the big studios spend 30% of their budgets on marketing... Of course, it all gets a bit easier once you have an existing profile, an existing fan base, etc.
  - zeroname 8y ago
    It's not just lack of marketing, it's the fact that there are now far more games, but gamers have neither more money nor time to compensate. There are too many game developers, it's as simple as that. Too many millennials don't want the regular old "grown up" jobs anymore, they want to be creatives or artists and the market just can't soak them all up. If you think it's hard as a game developer, try living off painting or sculpture or music or literature. The vast majority never get there. Meanwhile, a game programmer at least has ordinary programming jobs to fall back on - if they can stomach it.
    - slfnflctd 8y ago
      I don't know how they do it, honestly. Back in the day, when things were simpler, being a game dev sounded pretty cool. Now? No thank you. Lower wages, longer hours, much more difficult work, and 'fans' who continuously insult you in the worst possible ways no matter what you do... sounds like a nightmare. If I'm going to go the creative route I think I'd be happier on the sidewalk with a guitar. Career-wise, I would much rather help a middle manager figure out how to best crunch the data on their quarterly reports. It can actually be more interesting than it sounds on the surface, and if you're competent everyone's happy at the end.
zeroname 8y ago
> Already game developers are the lowest paid workers in the IT industry That is not true if you factor out all the people developing games independently on their own dime, against better financial advice. To counteract that, there just aren't enough developers working on enterprise Java architecture for no money, out of passion. It's also only fair that people who get to work on "fun" things like games are paid less. If they don't think it's fun, they can switch industries and earn more. Nobody is doomed to be a game developer. > I'm not arguing against any change, it just seems spiteful that Valve are sticking it to the little guys who can't go anywhere else. The little guys can go to itch.io, which charges as low as 0% commission. They may even have more visibility on there than on Steam, given that it's a smaller pond. There's also the Humble Store, which leaves commission up to the buyer. > This could have been a great chance to improve Steam overall, by reducing the commissions for all developers... They did reduce commissions for everyone by 5%. The extra 5% is for those who are at risk of moving off the platform because they can create their own visibility.
- beerlord 8y ago
  See for yourself: https://insights.stackoverflow.com/survey/2018/#salary https://insights.stackoverflow.com/survey/2018/#salary > The little guys can go to itch.io, which charges as low as 0% commission. They may even have more visibility on there than on Steam, given that it's a smaller pond. There's also the Humble Store, which leaves commission up to the buyer. Steam has a monopoly. There is no alternative for anyone with revenue below $10 million (hence this change). Itch.io yields about 1% of the revenue of Steam. The best you can do is sell Steam keys direct from your website, using the Humble Widget which charges 5%. However you will suffer from reduced visibility on the Steam store (since visibility is based on sales). > They did reduce commissions for everyone by 5%. No, only once a game reaches $10 million of total sales revenue.
  - suby 8y ago
    > (since visibility is based on sales). This is a point I don't see mentioned often enough. I've wondered in the past if it's actually better to forego every other platform in order to increase visibility through Steam. Higher sales means that Valve will promote you more, which may offset whatever revenue you'd be generating from sources like itch.io. Would be interested to hear if anyone has any opinions or idea about this.
deleted 8y ago
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simias 8y ago
>Already game developers are the lowest paid workers in the IT industry - and a lot of it has to do with the huge revenue shares ('platform taxes') charged by the monopoly platform holders. I'm not convinced. IMO game developers are lowest paid because it's one of the rare segments of software development where there are no shortage of applicants. It's glamorous, all the kids want to make video games when they grow up, it's more rewarding to tell people that you've been working on the latest Red Red Redemption than that you've been debugging an SPI driver all week. So you end up with an industry with a lot of turnover because they mostly hire hopeful young devs, underpay and overwork them until they burn out. And then you have 10 new freshly graduated folks waiting to take their place. I seriously doubt that things would be massively different if platforms where cheaper or more open. I mean, AAA studio like Rockstar are known for their terrible working conditions, I don't think that's because of "monopoly platform holders".

mentos 8y ago

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

beerlord 8y ago
Valve have shown that they will do nothing unless their hand is forced. Your best bet is an Epic Store, which will hopefully charge commissions of 8-12%. https://www.neogaf.com/threads/tim-sweeney-not-sure-why-steam-is-still-taking-30.1422584/ https://www.neogaf.com/threads/tim-sweeney-not-sure-why-stea... https://www.theregister.co.uk/2018/08/29/app_store_duopoly_30_per_cent/ https://www.theregister.co.uk/2018/08/29/app_store_duopoly_3... Valve and the other large platform holders know that if they abandon 30%, there is no going back. Over time that 'platform tax' will get pushed lower and lower, until it basically reaches the marginal cost of transacting the sale and bandwidth. They are trying to hold that off as long, long as possible. At this rate it could be 100 years though.
- whydoineedthis 8y ago
  1 decade down and iTunes hasn't budged. I suspect your 100yr timeframe is close
  - Praxish 8y ago
    Maybe not 100 years but substantial time. More likely, we need a platform transition as an inflection point that creates oppty for new market entrants. Part of new entrant's disruptive value prop may be better rev share terms.
  - giobox 8y ago
    If we stick to software and not tangent to movies/tv (itunes), Apple have absolutely moved some on this issue, since 2016 the App Store now offers 15-85 revenue shares for subscriptions once the user has subscribed for over a year. Sure it’s slow progress, but it is progress. > https://www.macrumors.com/2016/06/08/apple-major-app-store-changes/ https://www.macrumors.com/2016/06/08/apple-major-app-store-c...

seanalltogether 8y ago

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

scoot_718 8y ago
Is that what's behind that crap? Too many games require some fucking account I don't care about, when it should be linked to steam.
- jamp897 8y ago
  Yes, it’s also because platforms control what you can expirence, and if they feel it competes with their platform in someway they disallow it. So studios aren’t going to tolerate that going forward.

franknine 8y ago

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

Crosseye_Jack 8y ago
Take-Two do have their own store iirc or at least rockstar does. What they don’t have is an app where you can easily and simply download and install any game tied to your account. I have GTAV from them directly and it can be a chore remembering where the actual download button is for the installer on their site. EDIT: For the shits and giggles of it I tried to stumble across the installer for gtav on rockstargames.com - This isn't my first time But I always forget because I don't actually install the game that often (once its installed it normally stays installed until I nuke my system). First I thought, I'll make sure I'm logged in so I did that, There is a hover menu over my avatar now So I check that and follow profile and settings as none of the others seem to be linked to "let me download my game". But nothing in there links to to downloads. OK return to rockstargames.com because there was a downloads button on the header banner. Click... click on gtav and it prompts me for who I want to by the game from. so I select rockstar warehouse because that's who I brought the game from. It now prompts me to buy the game. Oh but I am no longer signed in. Arrr differnt domain name, that will be why. So I sign in, atleast this time I don't have to do a recaptcha to sign in as it did manage to figure out i'm signed in from rockstargames.com. Ok, it bounces me back to the warehouse home page instead of the page I was just at. I can not click on my username, So I try clicking Digital Downloads, Select "Grand Theft Auto V" as I'm sure that the one of the 6 SKU's they have for the digital copy of the game. And its prompting me to purchase the same. So I scroll all the way to the bottom and select "Digital Downloads" under shopping support. > How do I download my purchase? > You can download by either clicking the Download button on the Order Details page or by right-clicking on the Download button and clicking Save Target As in Microsoft Internet Explorer or Save Link As in Mozilla Firefox. Do not rename the download file as this can cause installation problems. Ok so I do that, There is my order but no download buitton. Ok... Lets check that support doc again. >I want to re-download my purchase, but the Download button is gone. >There are a couple reasons why you wouldn't see a button (where there previously was one) to download your purchase. If the order is older than 30 days, then the download period has expired. Well that's frustrating, BUT I know it can be done but I've done it a few times in the past. Fuck it, I'll do what I should of done in the first place (apart from "should of brought it on stream) I'll ask Google. http://lmgtfy.com/?q=How+to+I+redownload+gtav+on+pc http://lmgtfy.com/?q=How+to+I+redownload+gtav+on+pc 1st link is quora, 2nd is rockstar support, Well I'll give rockstar a final chance before relying on 3rd parties to help me and click the support.rockstargames.com link. >...or download from the GTAV PC Social Club Activation page. Clicks the link, BOOM there is my download. But wait, I thought I clicked the social club before. Clicks my avatar, OH NOW THERES A BIG BUTTON SAYING "Game Downloads" which isn't present when you click on your avatar from rockstargames.com

acomjean 8y ago

This makes sense. the share drops to 25% after 10 million in sales. and more after. One would imagine that there is some fixed cost for adding new titles and maintaining steam store. After a certain amount of sales the cost per title is just bandwidth so steam is making more per game anyway. Its also a hedge to prevent every large game seller from setting up their own store. Even if you are large its cheaper to use steam.

jsheard 8y ago
> Its also a hedge to prevent every large game seller from setting up their own store. That ship has already sailed - EA has Origin, Ubisoft has Uplay, Activision/Blizzard has Battle.net, Microsoft has the Windows store, and Bethesda and Epic have their own launchers. Nearly every major publisher has already made the investment to develop their own store and digital distribution infrastructure, so they have little reason to pay the Steam tax now.
- ksec 8y ago
  Are any of those you mentioned popular with Gamers though? I only ever hear Steam in gaming. What do you mean by own launchers? Surely not a Store right? Is Battle.Net a "Store"?
  - fromthestart 8y ago
    At least some of these games are only available through non steam launchers. E.g. Overwatch only launches from battle.net.
    - jsheard 8y ago
      It's pretty common for AAA games to not be available on Steam now. Blizzard never used it, and EA, Activision, Microsoft and Epic have pivoted to releasing exclusively on their own platforms. Ubisoft still releases on Steam but requires Steam buyers to install and log into Uplay regardless, which feels like preparation for abandoning Steam once enough users have Uplay installed.

jamp897 8y ago

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

Praxish 8y ago
As an entrepreneur in this space, I'd be okay with 20%. The issue is the current thresholds. I'd want it to be 20% over $1M not $50M. Around a million it starts being worth it to handle credit card processing, chargebacks etc.
- jamp897 8y ago
  As there’s more competition from studios entering the publishing space you should be able to get a better deal, with better and more current tech. The up side is Steam gives you visibility to a large player base with new publishers won’t have on day one, but it’s coming.
  - deleted 8y ago
    [deleted]

PakG1 8y ago

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

methodover 8y ago
> I am surprised that ... are able to command as high a margin as they do for sales commission. Yep. Me too. I’ve long thought that Steam charges way too much considering the platform. There would seem to be tons of room for a competitor to undercut Steam. I’m excited about Discord’s new store. Revenue share is a killer for a business, especially as one as volatile as computer games. Any game needs to be 25% better than it otherwise would have been because of Steam’s revenue share. Does it really bring that much to the table? In 2018? Enough to justify their absolutely enormous cost?
- tylerl 8y ago
  There's a GDC talk about this (up on YouTube, can't remember the title) about the cost/difficulty going alone vs going through steam. The tldr is that valve apparently knows exactly how much it costs you to run this apparatus yourself, and the rev share reflects that reality. The numbers are apparently really close. The catch is that as you sell more units, the cost of the apparatus starts to diminish as a percentage of revenue, so running your own marketplace starrs to make sense when you get into the blockbuster territory. This pricing update apparently takes that fact into account, which means that when companies start running the numbers on their new game launch, the justification for building their own marketplace starts to go away.

campercoder 8y ago

Thats great.. charge big companies less. :(

simplysimple 8y ago

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

zyx321 8y ago
Maybe not need them, but want them. EA and Ubisoft both launched their own competing platforms, so they have a lot of leverage to negotiate with.
- simplysimple 8y ago
  Then they should lower rates across the board. There used to be a time when "just being on Steam" justified the high cost to smaller developers, but the market is over saturated now because they don't curate anymore that it isn't the case.
  - icebraining 8y ago
    So where would a small developer launch nowadays? As far as I can tell, they're still on Steam, so they disagree with you that the cost is not justified.
    - simplysimple 8y ago
      Sony has been friendly to indies during the PS4 generation. Nintendo was especially good for indies in 2017 and is practically giving away development kits. Even EA is becoming increasingly friendlier to indies on their Origin platform. Steam has brand recognition for developers, but that is changing with competition.
michaelmrose 8y ago
People who bring in more sales are worth more money it's not shocking that they get a better deal. It's like saying capital one gives air miles to people who don't even need them. Well ya. It's not a gift it's purely mercenary.
8y ago

Zelmor 8y ago

Valve's cuts are fine. I remember the times when developers were glad if they got 20-30% of the profits in general, with publisher deals starting at 70% cuts for IP-first game releases, and way higher if it was your first game. This after you pitched the game with a tech demo running, of course. Steam is a blessing on digital distribution, and the most competent platform to date, albeit it has its problems.

qasdf 8y ago
A friend of mine released a game that sold around a million copies in the late 90s or early 2000s sometime and had a deal like that. Except the publisher claimed that after all the distribution and physical costs the profit of the game was 0 and so he never got any money from his profit sharing agreement. Steam and online distribution in general is a godsend.
- maxxxxx 8y ago
  https://en.wikipedia.org/wiki/Hollywood_accounting https://en.wikipedia.org/wiki/Hollywood_accounting
wmf 8y ago
publisher deals starting at 70% cuts But didn't those publishers pay development costs? I've seen a lot of people comparing publishers and retailers (which is what app stores are) without understanding the differences.
- kevingadd 8y ago
  publishers funded development, did advertising, provided QA and often localization services, and manufactured physical products. Valve runs a CDN and forces you to have a forum for your game that you moderate yourself, and runs a support service that issues no-questions-asked refunds of your title after players played it for upwards of 2 hours, which come out of your profits. They do offer some useful APIs like Steamworks but those break randomly and have no devrel or customer service because Valve hates developers. So in practice, you're not getting much useful for your 30% - CDN, launcher, updater, payment processing, achievements. everything else they offer is buggy or actively unwanted. Valve clearly recognizes at this point that developers don't like the service they offer for the 30% and that more importantly, big publishers can easily just go their own way. When that Valve cut is millions of dollars it's very easy to justify running your own storefront even if you sell fewer copies, because those Steam units sold come with huge negative effects - forums toxicity, buggy platform APIs, no-questions-asked refunds, review brigading, etc. Context: Shipped a couple titles on Steam, one 500k+ sales. In one case we did extensive Steamworks integration (weeks of dev time) and actively regretted it. If I had a solution for the exposure problem (Steam still gives you way more potential sales even though it sucks now) I would go my own way in a heartbeat. Steam isn't worth 30%.

stillmotion 8y ago

This should link to the original source: https://steamcommunity.com/groups/steamworks#announcements/detail/1697191267930157838 https://steamcommunity.com/groups/steamworks#announcements/d...

georgeecollins 8y ago

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

spir 8y ago
Came here to say this. 15 years of Steam monopoly is coming to, well not an end, but a transition point. Great news for game devs!

newnewpdro 8y ago

It seems obvious to me that Valve should have a micro tier for the small indie space, by effectively making everyone else subsidize them. Something like 5% until crossing $30,000 in revenue. This can be a life-changing difference for individuals couchsurf-hacking while trying to break into the game industry on their own; 28.5k vs. 21k. I highly doubt this would move the needle at all on Valve's end. Do they already have anything like this or are the little guys paying the ~30% I see being thrown around?

Zren 8y ago

* First $10M = $3M Valve + $7M GameDev * Next $40M = $10M Valve + $30M GameDev * Next $50M = $10M Valve + $40M GameDev Assuming your game is expected to generate $50M in revenue, is giving up $13M (26% of revenue) for bandwidth + servers + store handling credit card info + credit card fees + technicians + support staff worth it over rolling your own? Or $23M if it's expected to make $100M?

spatz 8y ago
> for bandwidth + servers + store handling credit card info + credit card fees + technicians + support staff You're forgetting exposure and huge player base. That's got to add some revenue...
- lione 8y ago
  Exposure is key, I know I don't buy games that aren't on Steam. So many games I wouldn't know about at all if they weren't on steams recommendations page.
- FooHentai 8y ago
  Not so much for the games that are hitting those revenue levels, as they already have mind share far greater than you get from being on Steam. It's a game changer for smaller and unknown developers to be findable on the steam store. Once you're a battlefield/witcher/fallout etc, you just don't need it.
swift532 8y ago
Don't forget exposure and people like me who can't be bothered to buy a game if it's not on Steam or GOG.

adamrezich 8y ago

I don't know if anyone's noticed the unprecedented price-slashing that's been happening in AAA games this year but I think we may be in for another AAA game crash. For indies I don't think it's much better unless you're one of the Big Names in that space. (Incidentally, getting into making games professionally through any means other than self-funding seems basically impossible at the moment.) Any other perspectives on this?

zanny 8y ago
Despite how the industry likes to try to pitch it games aren't as disposable as developers want you to think they are. At least for me, I'm spending more time playing titles I've owned for years today than on new releases. And every year adds more games to that backlog / history of games to get around to. And some games never get old - I still revisit probably twice a year Quake and Doom (the original) to play all the new community map packs and mods for a week. There really needs to be some sea change in the industry away from disposable properties and towards ongoing refinement and iteration on proven titles. I'm sure publishers would love it - there is a lot less investment risk if you can establish regular revenue from game updates like how MMOs work - but the consumers have for the longest time seen value in gambling how good a new title in a series will be over seeing the last one just made better over time.
- user5994461 8y ago
  +1 on that. There are more games than ever. New games are competing against other new games while also competing against every old release of every game, on sale at a huge discount. There is no time and no money for all. Much worse than that, there is no more groundbreaking innovation in technology. 20 years ago there was the move from 2D to 3D. 10 years ago came realistic 3D with facial expressions and destructible environments. Today call of duty cannot be distinguished from last decade call of duty.
gnarbarian 8y ago
It's not across the board. Red dead redemption 2 is a huge hit. The big launches which are failing and getting lots of press (fallout 76, and battlefield V) are doing so because of anticonsumer practices. In the case of fallout 76, the game is so buggy nobody wants to play it. Plus, launching fallout 4 after people were wrapping up Witcher 3 really put things into perspective as to how far behind Bethesda is compared to CD project red. Side by side fallout 4 was garbage. As for Battlefield V. I've been a die-hard battlefield fan since BF 1942, I played the BFV demo and it proved to me that they are continuing to move backwards. Pay to win microtransactions and even less destructible environments show that they are dead set on destroying the mechanics which make battlefield fun and alienating their core customers. Perhaps they are doing this in a misguided attempt to capture some of the fortnite/call of duty market but instead they have sacrificed their core customers in an attempt to entice people away from games they are perfectly happy with. Then they top it off by sanctimoniously insulting their customers and telling us not to buy it if we don't like their changes.

shmerl 8y ago

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

ksec 8y ago

So what exactly is "Valve" now without Steam? They don't have new games any more ( And none of the the "newer" ones were anywhere as good as CS ). They don't improve or compete in Game Engine any more, which they did in the Golden Era between Unreal, DOOM, and Source. What have they got left? Steam OS and Gaming Machine got no where. HTC Vive doesn't look like they can compete with Sony or Oculus.

doyoulikeworms 8y ago
Valve is still a quite an admirable game studio. Not only do their top games CS:GO and Dota 2 have large and healthy player bases, but they also have large and vibrant competitive scenes. I don’t compare Valve to the likes of Nintendo or Bethesda anymore wrt game development, but instead to companies like Riot and Blizzard. These studios revolve around franchises-as-services and don’t release new IP often. Their core games are pillars of the competitive, casual, and streaming games scenes. I do miss the days of more frequent releases, though. Hooray for Artifact!
- ksec 8y ago
  > but instead to companies like Riot and Blizzard. But both Riot and Blizzard is like 10 times larger than Valve. And has games and franchise that is sustainable business if the worst happens in the next 10 years. Does having CS:Go and DOTA only enough to feed them? I mean even DOTA 2 is like 5 years ago already. And Artifact doesn't seems like a hit at all.
- bytematic 8y ago
  Haha Valve comes nowhere close to Blizzard or other developers. Blizzard at least updates their most popular games more than once every 6 months and doesn't leave them to die.
wingerlang 8y ago
They have 2 upcoming games listed on their website (https://www.valvesoftware.com/en/about https://www.valvesoftware.com/en/about) and 3 'ongoing' games. They have also stated they are working on 3 full-length VR titles.