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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

#141

Post by dageshi »

mindslight wrote: post #135
jrockway wrote: post #87

Earlier quoted context omitted.

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 wor…

I don't disagree with your gist, but does Steam actually manually solve the examples you gave? It seems like part of the value add of outsourcing comes from the negativity of a policy not directly reflecting on your own business. If you refuse to hunt down a check (or even stop accepting checks altogether), a customer might switch to another ISP. But if your third party mechanically refuses, it's "nobody's fault". Ev…

I'm assuming Steam handles the application of regional sales tax/VAT based on country of purchase (that would apply in the EU I think?) that alone might be worth it? Not to mention they have a really good/fast distribution system.

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

#142

Post by FooHentai »

gnarbarian wrote: post #121
adamrezich wrote: post #114

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…

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…

>In the case of fallout 76, the game is so buggy nobody wants to play it.

Buggy, bland, and hamstrung by silly design decisions:

- No non-player characters transformed into 'we'll use robots to awkwardly get around our self-imposed rule'

- 'Let's use our time-stopping VATS system in a multiplayer environment where you can't pause time, I'm sure that will work well'

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

#143

Post by diminoten »

chupasaurus wrote: post #117
diminoten wrote: post #95

Earlier quoted context omitted.

The major publishers aren't trying to "beat" Steam, they're just trying to release their games without paying the Steam Tax. The point is, it's too late to do the math on the Steam Tax now, those R&D dollars are spent. Steam was too slow.

> they're just trying to release their games without paying the Steam Tax. By not paying the Steam Tax, publishers are paying Engineering Tax and risks for fails in their distribution platforms. I have Vietnam flashbacks from Origin and Uplay. EA fixed their's in 2015, but latter is still a bughole and the reason I don't even look at Ubi's games. Latest Bethesda release is a clear example of that problem.

I don't think the vast majority of gamers give a shit about Uplay's terribleness.

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

#144

Post by lione »

spatz wrote: post #134
Zren wrote: post #113

* 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?

> 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...

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.

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

#145

Post by FooHentai »

spatz wrote: post #134
Zren wrote: post #113

* 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?

> 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...

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.

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

#146

Post by kevingadd »

wmf wrote: post #101
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.

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%.

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

#147

Post by sbuttgereit »

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)?

Back when I was in the retail industry, we saw nowhere near those kinds of gross margins (100% that is) on average (I worked in corporate management with ~4 chains and consulted to a few dozen others of varying size over a little more than a decade).

More typical gross margins were in the ~40% ballpark. Some higher/some lower; the entertainment retailer I worked with was averaging around 35%. That's not to say it couldn't be dramatically higher by business or product line, one of the retailers I worked for had a popular product closer to 95% gross margin (excluding the stupid crazy 50% shrink we were experiencing on that product)... but we were also manufacturing that product and the chain wasn't doing that well across the assortment.

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

#148

Post by JumpCrisscross »

whatshisface wrote: post #140
JumpCrisscross wrote: post #137

Earlier quoted context omitted.

> * a customer representative whose main qualification would be diligent attention to detail?* Flexible problem solvers with attention to detail and solid communications skills are about as expensive as engineers.

What about those rumored thousands who are graduating with "unemployable degrees?" If the market for capable individuals was the same as the market for specialized knowledge then STEM would not be so much more economically attractive to students.

> If the market for capable individuals was the same as the market for specialized knowledge then STEM would not be so much more economically attractive to students

Most people, including those with advanced qualifications in STEM, could not be described as flexible problem solvers with attention to detail and solid communication skills. This confluence, essential for quality customer support, is exceedingly rare, and tends to describe those whom our societies remunerate most richly.

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

#149

Post by akavel »

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…

"So You Want To Compete With Steam": https://www.fortressofdoors.com/so-you-want-to-compete-with-...

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

#150

Post by AmVess »

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…

25% is a steal. They handle all the financial transactions and host and distribute the game files on the most popular client on the planet. They also handle the security.

Handling your own billing is expensive and time consuming. Setting up your own distribution and hosting is also expensive and time consuming, and then there's the bandwidth cost.

All this adds up rather quickly. Having someone else do the business end of selling games, and only for 25% is a bargain.

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