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Unity are currently asking for 4% of revenue over $1M for developing the engine and toolchain that game developers will use all day every day. Valve skim 30% of

Unity are currently asking for 4% of revenue over $1M for developing the engine and toolchain that game developers will use all day every day. Valve skim 30% of the retail price of the game for the priveledge of hosting a game on their storefront. This is why Valve makes money.

raincole 3y ago
Yes, tool makers just can't take the same margin as publishers/platforms do. It's nothing new. Microsoft Words can't take 80% (like a traditional publisher) of your book's retail price, nor even 30% (like Amazon). I'm not "defending" Valve (actually I find it's very worrisome that they're a game developer and a platform at the same time.) I'm pointing out the fact in no way Unity can sustain 6x of employees than Valve.
gmerc 3y ago
Valve delivers massive value equivalent to entire departments in a publisher through their steamworks system. Distribution, Analytics, Multiplayer, Anticheat, Publishing Services, Anti Piracy, Storefront, Sales, Mods, Custom Content Integrations, Localisation, and most importantly discovery (things you pay for dearly outside on mobile). They never had need to convince developers that the fee is worth it and they never had to retroactively change terms of service. They have continually invested into the system and built the trust. Most of all, Valve chose the long term sustainable business model when everyone else in the industry tried to extract per download charges from gamers. So gamers chose the company that sold them their game collection, just in the cloud instead of nickel and diming. And developers chose valve because they were infinitely more trustworthy and offered better tools than any of the legacy publishers. They never increased the fees because they made bad bets either (and they had a few like VR) Yes there’s a case to be made that the 30% should be reduced now, but realistically few could compare Valve to Unity when it comes to execution and long term value balancing for developers and gamers.
- teamonkey 3y ago
  I just find it really strange to think of Valve's 30% cut to be value, when its main advantage is being an oligopoly, but Unity's 4% cut to be rent-seeking, when it's the foundation and toolset for the software being made.
  - raincole 3y ago
    It's both rent-seeking. But I can't help but feel you're willing to twist the facts to defend Unity. I'll list some facts for the readers: 1. The 4% cut is a rumor at this point. It's not confirmed. 2. Unity didn't just announce a 4% cut at the first place. They announced a fee per install. It's an unprecedented business model. No other semi-popular game engine does that, ever.
    - teamonkey 3y ago
      I'm not defending Unity, I'm just not defending Valve/Steam (also App Store, Play), which is a much, much bigger drain on revenue. The Unity pricing structure is complicated and badly managed. The fees were previously uncapped, and it allows for edge cases where the fees look like they could exceed revenue. It causes problems for givaways, bundles and Gamepass deals. Still, for many situations the math works out so Unity is cheaper than Unreal, even before this 4% rumour. You wouldn't want to accidentally hit one of those edge cases though.
      - daemin 3y ago
        I think it's easier for people to rationalise a simple cut of each sale rather than a fee for each "unique" installation. In the first case you can calculate that percentage easily in a spreadsheet and account for it in your business. In the second case it's totally unknown how to budget for. Should you assume 1, 2, 5 installs per purchase? How much of your revenue does that account for? People would rather have a higher fee that is certain than a lower but uncertain fee (of course no fee would be best).
        teamonkey 3y ago

raincole 3y ago

Yes, tool makers just can't take the same margin as publishers/platforms do. It's nothing new. Microsoft Words can't take 80% (like a traditional publisher) of your book's retail price, nor even 30% (like Amazon). I'm not "defending" Valve (actually I find it's very worrisome that they're a game developer and a platform at the same time.) I'm pointing out the fact in no way Unity can sustain 6x of employees than Valve.

gmerc 3y ago

Valve delivers massive value equivalent to entire departments in a publisher through their steamworks system. Distribution, Analytics, Multiplayer, Anticheat, Publishing Services, Anti Piracy, Storefront, Sales, Mods, Custom Content Integrations, Localisation, and most importantly discovery (things you pay for dearly outside on mobile). They never had need to convince developers that the fee is worth it and they never had to retroactively change terms of service. They have continually invested into the system and built the trust. Most of all, Valve chose the long term sustainable business model when everyone else in the industry tried to extract per download charges from gamers. So gamers chose the company that sold them their game collection, just in the cloud instead of nickel and diming. And developers chose valve because they were infinitely more trustworthy and offered better tools than any of the legacy publishers. They never increased the fees because they made bad bets either (and they had a few like VR) Yes there’s a case to be made that the 30% should be reduced now, but realistically few could compare Valve to Unity when it comes to execution and long term value balancing for developers and gamers.

teamonkey 3y ago
I just find it really strange to think of Valve's 30% cut to be value, when its main advantage is being an oligopoly, but Unity's 4% cut to be rent-seeking, when it's the foundation and toolset for the software being made.
- raincole 3y ago
  It's both rent-seeking. But I can't help but feel you're willing to twist the facts to defend Unity. I'll list some facts for the readers: 1. The 4% cut is a rumor at this point. It's not confirmed. 2. Unity didn't just announce a 4% cut at the first place. They announced a fee per install. It's an unprecedented business model. No other semi-popular game engine does that, ever.
  - teamonkey 3y ago
    I'm not defending Unity, I'm just not defending Valve/Steam (also App Store, Play), which is a much, much bigger drain on revenue. The Unity pricing structure is complicated and badly managed. The fees were previously uncapped, and it allows for edge cases where the fees look like they could exceed revenue. It causes problems for givaways, bundles and Gamepass deals. Still, for many situations the math works out so Unity is cheaper than Unreal, even before this 4% rumour. You wouldn't want to accidentally hit one of those edge cases though.
    - daemin 3y ago
      I think it's easier for people to rationalise a simple cut of each sale rather than a fee for each "unique" installation. In the first case you can calculate that percentage easily in a spreadsheet and account for it in your business. In the second case it's totally unknown how to budget for. Should you assume 1, 2, 5 installs per purchase? How much of your revenue does that account for? People would rather have a higher fee that is certain than a lower but uncertain fee (of course no fee would be best).
      - teamonkey 3y ago