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>>> 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 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. What makes you think that they have high margin? It's not like each game creators could run a worldwide distribution and payment operation with just a few percent more of revenues.

michaelmrose 8y ago
"It's not like each game creators could run a worldwide distribution and payment operation" You mean like a website? I think it's more fruitful to imagine multiple merchants competing to sell devs wares and lessor commissions as a result of competition.
- user5994461 8y ago
  You realize that it takes a lot of work to make a website to accept payment from a hundred countries in dozens of currencies and handle customer support and chargeback and fight fraud? You can try to run your own website, to save 10% fees on a minuscule userbase, it simply doesn't cover the costs.
  - azhenley 8y ago
    Serious question: isn’t this what services like PayPal are for? Along with customer service services. Certainly not trivial, but it seems doable.
    - mschuster91 8y ago
      Paypal only handles payment. You still gotta do customer support, CDN infra (with games running at over 60GB each, that's not easy!), fraud detection, client dev and technical support for over three platforms (Win with 3 major versions, OS X with probably the same, and a myriad of Linux distros/kernel versions/GPU drivers), social networking/messaging stuff and a whole lot of small-ish stuff to get at half the functionality Steam offers.
    - notSupplied 8y ago
      What handling refunds? Some are legit, some will be fraudulent. What a out dealing with foreign currency? What if your game becomes popular in a country where PayPal isn't prevalent?
    - richardknop 8y ago
      What about billing support? You need people on the phone to handle complaints and issues from customers, deal with chargebacks, refunds and thousands of various weird requests from people that will keep coming. Also you need a software engineer team to work on the payment processing system / website. It's not "build it once and leave on autopilot". These things need continuous maintenance, bug fixes and improvements. All of that costs a lot of money and you have to have a really large revenue to be able to handle this yourself.
  - kbwt 8y ago
    Can't something like Stripe + Braintree provide the same at a fraction of the cost?
    - user5994461 8y ago
      Not at all. For starter Stripe is only usable if you are a small US company selling to a US user base. It also restricts your audience to customers with a card and willing to enter it on your website. It's better than nothing but it's in no way comparable to what steam offers.
      - gomox 8y ago
        That's a dramatic misrepresentation. Source: operated startup selling to LATAM customers, used Stripe.
      - rblatz 8y ago
        Lyft uses stripe, I wouldn’t consider them small.
  - pnloyd 8y ago
    Don't companies like stripe aim to make packaged solutions to problems like these?
    - user5994461 8y ago
      Definitely not. It's quite the opposite actually. Stripe gives you a basic solution to accept payments in some locations and under some circumstances. Once a company reaches in the tens of millions in yearly turnaround or expand internationally, it has to move on and run multiple payment providers.
  - michaelmrose 8y ago
    I would be interested in data but logically wouldn't most of revenue at present come from 12-18 countries?
    - user5994461 8y ago
      That's the point. Doing internationalization and payments for 12-18 countries is a pain. Steam helps you with that. You could try to do better yourself but the effort is not worth saving a few percent of fees (on a lot less sales).
      - kbwt 8y ago
        Steam certainly won't internationalize your game for you.
        user5994461 8y ago
        Steam is translated and comes with support for many languages. It takes all currency and it has region settings for pricing, currency and release dates. For the anecdote, it's maybe the only US service that sells well in Russia. It certainly won't translate the game for you, not that translating a bunch of text files is the hardest part, but it will help with everything else. Ask international users what they think of other platforms. Like the one they couldn't use because it didn't accept their names with an accent or couldn't enter a billing address without a state.
        michaelmrose 8y ago
        How will that give your game an international user base? Woudn't the first step being making the game actually playable by users in a given language before worrying about being able to sell to them.
        mango7283 8y ago
        Not necessarily, assuming the game is in English, the payment barrier is higher than the language barrier. OTOH if the game is in Japanese and only sold on a Japanese internet platform then you have two barriers - language and payment
  - scarejunba 8y ago
    Minecraft did it when it was tiny and it scaled all the way up.
    - yellowapple 8y ago
      Just because one game managed to pull it off a decade or so ago doesn't mean that sort of success is the norm.
      - scarejunba 8y ago
        I just mean it’s possible.
  - gomox 8y ago
    "Bitcoin is useless!" -- every HN comment thread ever
- adanto6840 8y ago
  Payment processing is a big part of it, but it's not just that. The deployment framework, testing branches, the workshop/user content/mods support, etc. That stuff could certainly be replicated, but the exposure to the existing user base of active customers is the tough one. Admittedly it is supposedly lower value now, with Steam Direct replacing Greenlight, but it shouldn't be overlooked -- it's the same reason that tons of products are sold on Amazon even though you can also purchase the same product directly via the brand's website... FWIW, I'm lead dev of SimAirport[0] which is in Steam's Early Access program. The 30% has been tough to swallow, but without Steam (and given our lack of internal marketing/spend) we probably wouldn't have sold a quarter of what we have thus far. And while we wouldn't qualify for any of these tiers had they been in place previously, it's still a solid upside "just in case" your game blows expectations out of the water. I'd love to see them add a tier around $2-5M at 27-29%, even if just as a "bone" to indie developers; it'd make developing a 'game as a service' (ie long & consistent feedback-driven dev cycle) more palatable and likely result in demonstrably better games. Tangentially related at best, but sometimes I wonder what Steam _actually_ optimizes for -- if their algorithms always show the "best" games (ie ones that players spend hundreds++ hours playing) then I'd expect that to actually hurt their revenues short term. In theory they'd be better off marketing/optimizing to push games that satisfy users but that have low play-time/hours on average, so that they can sell the player a different game that much sooner. It's a strange set of incentives & it's hard to tell how aligned they really are (with either players or developers). [0] - https://store.steampowered.com/app/598330/SimAirport/ https://store.steampowered.com/app/598330/SimAirport/
  - yellowapple 8y ago
    I probably wouldn't have bought SimAirport if it didn't show up in my Discovery Queue or whatever on Steam, and I'm glad I did because it's filling a void in my soul left behind by Air Mogul. (And by the way: awesome job!) Valve's rather enthusiastic and concrete support for Linux gaming certainly doesn't hurt, either. Coupled with the discovery features above, it makes it a lot easier to figure out which developers I'd like to keep supporting.
  - Dextro 8y ago
    I just created an account to thank you for making this game. I have been looking for a game just like this after reaching all the limits in Airport Tycoon ages ago. And I mean literal limits. That game had a bug where flights were limited by an internal variable that was smaller than the capacity you could build so after a while the game would just stop and you would be unable to get any more use out of your airport. You could easily test this by cancelling one contract which would immediately make a new offer pop up. Anyway your game looks just the thing I've been looking for since that old early 2000s game. I'll be throwing some money your way for sure.
- redisman 8y ago
  It's also a major sales channel. Valve has over the decade rounded up a huge chunk of the people who buy PC games into one place.
MattRix 8y ago
uh, see Itch.io or Humble, which do the exact same thing for a fraction of the cost
- ehsankia 8y ago
  Does itch.io have a world wide CDN delivering high enough speeds to handle 50GB games? Do they provide match making, voice communication, game hub, cloud saves, workshop, achievements, stats, and so on? Steam provides a huge amount of services behind the scenes.
  - MattRix 8y ago
    This is the whole point. Indie devs don't need a CDN that can handle 50gb games, or most of those other services you listed... Yet we're stuck paying the full 30% that those mega studios that actually use those features are paying.
    - ehsankia 8y ago
      Steam still brings a lot more traffic that they would get if they sold directly. Most people who do both Steam and direct report that Steam consists of more than 95% of their revenue.

michaelmrose 8y ago

"It's not like each game creators could run a worldwide distribution and payment operation" You mean like a website? I think it's more fruitful to imagine multiple merchants competing to sell devs wares and lessor commissions as a result of competition.

user5994461 8y ago
You realize that it takes a lot of work to make a website to accept payment from a hundred countries in dozens of currencies and handle customer support and chargeback and fight fraud? You can try to run your own website, to save 10% fees on a minuscule userbase, it simply doesn't cover the costs.
- azhenley 8y ago
  Serious question: isn’t this what services like PayPal are for? Along with customer service services. Certainly not trivial, but it seems doable.
  - mschuster91 8y ago
    Paypal only handles payment. You still gotta do customer support, CDN infra (with games running at over 60GB each, that's not easy!), fraud detection, client dev and technical support for over three platforms (Win with 3 major versions, OS X with probably the same, and a myriad of Linux distros/kernel versions/GPU drivers), social networking/messaging stuff and a whole lot of small-ish stuff to get at half the functionality Steam offers.
  - notSupplied 8y ago
    What handling refunds? Some are legit, some will be fraudulent. What a out dealing with foreign currency? What if your game becomes popular in a country where PayPal isn't prevalent?
  - richardknop 8y ago
    What about billing support? You need people on the phone to handle complaints and issues from customers, deal with chargebacks, refunds and thousands of various weird requests from people that will keep coming. Also you need a software engineer team to work on the payment processing system / website. It's not "build it once and leave on autopilot". These things need continuous maintenance, bug fixes and improvements. All of that costs a lot of money and you have to have a really large revenue to be able to handle this yourself.
- kbwt 8y ago
  Can't something like Stripe + Braintree provide the same at a fraction of the cost?
  - user5994461 8y ago
    Not at all. For starter Stripe is only usable if you are a small US company selling to a US user base. It also restricts your audience to customers with a card and willing to enter it on your website. It's better than nothing but it's in no way comparable to what steam offers.
    - gomox 8y ago
      That's a dramatic misrepresentation. Source: operated startup selling to LATAM customers, used Stripe.
    - rblatz 8y ago
      Lyft uses stripe, I wouldn’t consider them small.
- pnloyd 8y ago
  Don't companies like stripe aim to make packaged solutions to problems like these?
  - user5994461 8y ago
    Definitely not. It's quite the opposite actually. Stripe gives you a basic solution to accept payments in some locations and under some circumstances. Once a company reaches in the tens of millions in yearly turnaround or expand internationally, it has to move on and run multiple payment providers.
- michaelmrose 8y ago
  I would be interested in data but logically wouldn't most of revenue at present come from 12-18 countries?
  - user5994461 8y ago
    That's the point. Doing internationalization and payments for 12-18 countries is a pain. Steam helps you with that. You could try to do better yourself but the effort is not worth saving a few percent of fees (on a lot less sales).
    - kbwt 8y ago
      Steam certainly won't internationalize your game for you.
      - user5994461 8y ago
        Steam is translated and comes with support for many languages. It takes all currency and it has region settings for pricing, currency and release dates. For the anecdote, it's maybe the only US service that sells well in Russia. It certainly won't translate the game for you, not that translating a bunch of text files is the hardest part, but it will help with everything else. Ask international users what they think of other platforms. Like the one they couldn't use because it didn't accept their names with an accent or couldn't enter a billing address without a state.
        michaelmrose 8y ago
        How will that give your game an international user base? Woudn't the first step being making the game actually playable by users in a given language before worrying about being able to sell to them.
        mango7283 8y ago
        Not necessarily, assuming the game is in English, the payment barrier is higher than the language barrier. OTOH if the game is in Japanese and only sold on a Japanese internet platform then you have two barriers - language and payment
- scarejunba 8y ago
  Minecraft did it when it was tiny and it scaled all the way up.
  - yellowapple 8y ago
    Just because one game managed to pull it off a decade or so ago doesn't mean that sort of success is the norm.
    - scarejunba 8y ago
      I just mean it’s possible.
- gomox 8y ago
  "Bitcoin is useless!" -- every HN comment thread ever
adanto6840 8y ago
Payment processing is a big part of it, but it's not just that. The deployment framework, testing branches, the workshop/user content/mods support, etc. That stuff could certainly be replicated, but the exposure to the existing user base of active customers is the tough one. Admittedly it is supposedly lower value now, with Steam Direct replacing Greenlight, but it shouldn't be overlooked -- it's the same reason that tons of products are sold on Amazon even though you can also purchase the same product directly via the brand's website... FWIW, I'm lead dev of SimAirport[0] which is in Steam's Early Access program. The 30% has been tough to swallow, but without Steam (and given our lack of internal marketing/spend) we probably wouldn't have sold a quarter of what we have thus far. And while we wouldn't qualify for any of these tiers had they been in place previously, it's still a solid upside "just in case" your game blows expectations out of the water. I'd love to see them add a tier around $2-5M at 27-29%, even if just as a "bone" to indie developers; it'd make developing a 'game as a service' (ie long & consistent feedback-driven dev cycle) more palatable and likely result in demonstrably better games. Tangentially related at best, but sometimes I wonder what Steam _actually_ optimizes for -- if their algorithms always show the "best" games (ie ones that players spend hundreds++ hours playing) then I'd expect that to actually hurt their revenues short term. In theory they'd be better off marketing/optimizing to push games that satisfy users but that have low play-time/hours on average, so that they can sell the player a different game that much sooner. It's a strange set of incentives & it's hard to tell how aligned they really are (with either players or developers). [0] - https://store.steampowered.com/app/598330/SimAirport/ https://store.steampowered.com/app/598330/SimAirport/
- yellowapple 8y ago
  I probably wouldn't have bought SimAirport if it didn't show up in my Discovery Queue or whatever on Steam, and I'm glad I did because it's filling a void in my soul left behind by Air Mogul. (And by the way: awesome job!) Valve's rather enthusiastic and concrete support for Linux gaming certainly doesn't hurt, either. Coupled with the discovery features above, it makes it a lot easier to figure out which developers I'd like to keep supporting.
- Dextro 8y ago
  I just created an account to thank you for making this game. I have been looking for a game just like this after reaching all the limits in Airport Tycoon ages ago. And I mean literal limits. That game had a bug where flights were limited by an internal variable that was smaller than the capacity you could build so after a while the game would just stop and you would be unable to get any more use out of your airport. You could easily test this by cancelling one contract which would immediately make a new offer pop up. Anyway your game looks just the thing I've been looking for since that old early 2000s game. I'll be throwing some money your way for sure.
redisman 8y ago
It's also a major sales channel. Valve has over the decade rounded up a huge chunk of the people who buy PC games into one place.

MattRix 8y ago

uh, see Itch.io or Humble, which do the exact same thing for a fraction of the cost

ehsankia 8y ago
Does itch.io have a world wide CDN delivering high enough speeds to handle 50GB games? Do they provide match making, voice communication, game hub, cloud saves, workshop, achievements, stats, and so on? Steam provides a huge amount of services behind the scenes.
- MattRix 8y ago
  This is the whole point. Indie devs don't need a CDN that can handle 50gb games, or most of those other services you listed... Yet we're stuck paying the full 30% that those mega studios that actually use those features are paying.
  - ehsankia 8y ago
    Steam still brings a lot more traffic that they would get if they sold directly. Most people who do both Steam and direct report that Steam consists of more than 95% of their revenue.