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

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

#81
post #49
post #45

Earlier quoted context omitted.

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…

I'm pretty sure it's not the talk you're thinking of, but Jeff Vogel (who has been mostly-successfully making indie games consistently since 1995) mentions it in this GDC vault talk: https://www.youtube.com/watch?v=stxVBJem3Rs They were able to stop paying a third employee when they went to Steam. That's a lot of value to the business.

> They were able to stop paying a third employee when they went to Steam. That's a lot of value to the business.

They were able to stop paying? Doesn't that mean they make less money?

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

#82
post #32

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…

> are able to command as high a margin as they do for sales commission.

People are surprised that the entity that controls distribution and maintains the relationship with the customer can command whatever premium they want?

I don't know how to say this any in any non-snarky way, but this is business 101. Control distribution = control the market.

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

#84
post #29

Earlier quoted context omitted.

At least some of these games are only available through non steam launchers. E.g. Overwatch only launches from battle.net.

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.

Which makes the experience frankly painful in my experience. You have launchers launching launchers etc... I bought some Ubisoft games on steam but now I can't play them because when I launch them they ask for my uplay login and for some reason it doesn't work anymore (I could reset it but I couldn't be bothered).

It also generally doesn't play well with Steam "family sharing" that lets you share your games with family members without having to share the same steam session.

I don't like DRM very much but I do use Steam and Spotify because they mostly just work and don't usually get in the way. Cloud saves are pretty convenient too. I haven't bought a Ubisoft or EA game in a long time, mostly because I know it's going to be a pain to deal with their launchers.

If only I could buy a boxed game and not have to deal with any of that nonsense like back in the days... Some days I long for CD keys.

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

#85
post #81
post #49

Earlier quoted context omitted.

I'm pretty sure it's not the talk you're thinking of, but Jeff Vogel (who has been mostly-successfully making indie games consistently since 1995) mentions it in this GDC vault talk: https://www.youtube.com/watch?v=stxVBJem3Rs They were able to stop paying a third employee when they went to Steam. That's a lot of value to the business.

> They were able to stop paying a third employee when they went to Steam. That's a lot of value to the business. They were able to stop paying? Doesn't that mean they make less money?

Revenue is fairly useless it’s profit that you care about. Having less employees also means less effort managing them.

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

#86

Earlier quoted context omitted.

"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.

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…

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.

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

#87
post #32

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…

Collecting money is an important part of a business, but also not trivial. It therefore makes sense that people would outsource this. If you get big enough, you probably don't want a middleman in the way; this is why companies like Blizzard have their own store/launcher app. For everyone else, whatever they take is cheaper than having their own army of software engineers, lawyers, billing phone support, etc. In a world with Steam, as a game company, you don't have to worry about collecting money (and the associated customer support) and distribution. You can focus on your game. That is valuable, which is why people pay for it.

I work at an ISP. Billing is a constant influx of "interesting" requests that I would love to outsource so our software engineering team could focus on stuff specific to our business. But we never found a service that could do it better than our homegrown system.

Every week there are several one-off issues like "I overpaid because I didn't see the service credit" or "I would like to pay for the next 3 months in advance" or "my accounts payable department sent the wrong check, can you shred it and we'll pay with credit card". These things have to be handled manually. Not to mention people calling to change their payment method because they don't remember their password to the website, or just want to chat. All that is a drain on actually running the business, but unavoidable. You can't just say "nah we won't shred your check", so someone has to go find it and deal with it. While they're doing that, they're not making our product more innovative or reliable. They're running a check through a shredder. Anyone could do that, but unless you have 8 hours of check shredding to do a day, you are spending CFO salary on the task instead of check shredder salary on it. Therein lies the problem.

If this could all be outsourced, I'd pay a lot of money for it. So would any business. Billing is something you have to do if you want to collect money, but it's a time sink. Game developers don't have to worry about this, and generally seem OK with that. I don't blame them. They are lucky Steam exists.

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

#88

Earlier quoted context omitted.

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.

Minecraft did it when it was tiny and it scaled all the way up.

Just because one game managed to pull it off a decade or so ago doesn't mean that sort of success is the norm.

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

#89
post #50

Earlier quoted context omitted.

Can't something like Stripe + Braintree provide the same at a fraction of the cost?

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.

Lyft uses stripe, I wouldn’t consider them small.

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

#90
post #2

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…

>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".

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