Epic Games Issues Challenge To Valve Over Steam Revenue Sharing Policies And Exclusivity
Epic Games has caught some flak for serving up paid exclusives in its recently launched Epic Games store, such as Borderlands 3—publisher 2K Games agreed to give the Epic Games store dibs for the first six months, a decision that developer Gearbox Software had no part of. Valve has the power to stop that sort of thing though, if it agrees to certain terms.
In a Twitter post, Epic Games founder and CEO Tim Sweeney called on Valve to offer a bigger chunk of revenue to developers and publishers, in exchange for no more Epic Game store exclusives. Specifically, Sweeney wants Valve to bump the revenue share on Steam to a permanent 88 percent "without major strings attached." In return, Epic Games would "hastily organize a retreat from exclusives," and also consider putting its own games on Steam.
If Steam committed to a permanent 88% revenue share for all developers and publishers without major strings attached, Epic would hastily organize a retreat from exclusives (while honoring our partner commitments) and consider putting our own games on Steam.
— Tim Sweeney (@TimSweeneyEpic) April 25, 2019
"Such a move would be a glorious moment in the history of PC gaming, and would have a sweeping impact on other platforms for generations to come.
Then stores could go back to just being nice places to buy stuff, rather than the Game Developer IRS," Sweeney stated in a followup tweet.
How much of Sweeney's challenge is legitimate versus online posturing is up for debate, and whether anyone thinks Valve could sustain the Steam platform in the way that it currently does with a 12 percent cut of revenue across the board. As it stands, the standard split on Steam is 70/30, according to Games Industry. It's a sliding scale, though—games that top $10 million fall into a 75/25 split, and ones that make at least $50 million get bumped to an 80/20 tier.
In contrast, the Epic Games store takes a 12 percent chunk of revenue, the same amount Sweeney is challenging Valve to match in Steam.
Why 12%? We chose this number to provide a super-competitive deal for partners while building an enduring and profitable store business for Epic.
— Tim Sweeney (@TimSweeneyEpic) April 22, 2019
From that 12%, we net around 5% after direct costs and that could grow to 6-7% with greater economies of scale.
"Why 12 percent? We chose this number to provide a super-competitive deal for partners while building an enduring and profitable store business for Epic," Sweeney explained in a separate tweet. "From that 12 percent, we net around 5 percent after direct costs and that could grow to 6-7 percent with greater economies of scale."
Realistically, Valve is not likely to bend down to a 12 percent cut—we'd be surprised if it did, anyway. That means the train of exclusives for the Epic Games store will not stop with games like Borderlands 3, Metro Exodus, and Tom Clancy's The Division 2.
