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

gamasutra.com

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

#101

Post by wmf »

Zelmor wrote: post #72

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.

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.

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

#102

Post by on_and_off »

methodover wrote: post #36
PakG1 wrote: 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…

> 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 t…

Steam used to be the best way to make your game visible .. but now haha, not really.

Not that I am against Steam opening its doors .. the curation was very subjective which was problematic since it could mean life or death for a studio.

Right now .. I guess it is still better than nothing if you have an unknown game to sell .. but I would not have my game only sold on steam.

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

#103

Post by methodover »

kbwt wrote: post #46
methodover wrote: post #36

Earlier quoted context omitted.

> 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 t…

> Any game needs to be 25% better Actually, 42.86% better with the 30% cut, and 33.33% better with the 25% cut, and 25% better with the 20% cut.

I appreciate the precision!

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

#104

Post by scarejunba »

yellowapple wrote: post #88
scarejunba wrote: post #61

Earlier quoted context omitted.

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.

I just mean it’s possible.

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

#105

Post by sorenjan »

PakG1 wrote: 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…

Epic haven't put Fortnite on Play store, they distribute it themselves instead. It's probably easier on Android than iOS.

30% is ok for small to medium developers to not have to deal with payment and distribution, but large companies like Epic, Blizzard, EA, and so on doesn't need that. 30% is way too much, Google and Apple doesn't add 30% of the value to a AAA game.

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

#106

Post by methodover »

tylerl wrote: post #45
methodover wrote: post #36

Earlier quoted context omitted.

> 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 t…

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…

For sure, a service like Steam offers tons of value for a game developer. And I’m sure you’re right that the price of Steam matches the cost of an individual developer developing a launcher and hosting service. That’s all true.

But I feel like the margins for Steam are so wide that it’s wide open for undercutting; for others to offer a cheaper, probably better product. I’d hope that game hosting quickly becomes commoditized due to lots of competitors vying for the cheapest possible price.

That’s good for developers, and really good for gamers.

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

#107

Post by e12e »

dogma1138 wrote: post #52
PakG1 wrote: 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…

Brick and mortar stores pay about $45 for a $60 dollar game, and have additional bonuses for sales targets. Some larger publishers operate on a different scheme similar to the large DIY and big box stores in which they “rent” shelf space, pay for promotional services and share a smaller percentage of each sale revenue. A lot of times there are other restrictions such as game stores need approval for things like unoff…

> Brick and mortar stores pay about $45 for a $60 dollar game

Really? I thought anything less than a 100% mark-up generally meant retail wasn't profitable? (ie 30 for a 60 dollar game)?

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

#108

Post by JusticeJuice »

methodover wrote: post #36
PakG1 wrote: 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…

> 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 t…

The money games can make on steam is infinitely higher than other platforms - what you're paying for is to get your game on the platform with the most users.

A local game company I knew had a game on the humble bundle, their website, and a few other platform for months - they made a few thousand. Then it got greenlight on steam and they pulled 1m over 4 months.

Steam is not merely a payment processing system, it's an audience.

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

#109

Post by muro »

sorenjan wrote: post #105
PakG1 wrote: 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…

Epic haven't put Fortnite on Play store, they distribute it themselves instead. It's probably easier on Android than iOS. 30% is ok for small to medium developers to not have to deal with payment and distribution, but large companies like Epic, Blizzard, EA, and so on doesn't need that. 30% is way too much, Google and Apple doesn't add 30% of the value to a AAA game.

s/easier/possible/ on Android

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

#110

Post by georgeecollins »

e12e wrote: post #107
dogma1138 wrote: post #52

Earlier quoted context omitted.

Brick and mortar stores pay about $45 for a $60 dollar game, and have additional bonuses for sales targets. Some larger publishers operate on a different scheme similar to the large DIY and big box stores in which they “rent” shelf space, pay for promotional services and share a smaller percentage of each sale revenue. A lot of times there are other restrictions such as game stores need approval for things like unoff…

> Brick and mortar stores pay about $45 for a $60 dollar game Really? I thought anything less than a 100% mark-up generally meant retail wasn't profitable? (ie 30 for a 60 dollar game)?

Most dedicated game retailers (GameStop) make their profit from selling used games. There is a higher markup for that.
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