I recently went over to the Epic store and a couple things made me wonder.
1). So there was a game, Outland or something, and I clicked on it but could find no information other than its an RPG. Being a GenXer, I immediately mistrust and sales pick written by the seller. This is the only information on the page. So, I end up on metacritic to find out what the game is about and think to myself… " Man this is so 2002, what a shitshow."
2). Back to the Epic site and I start scrolling and scrolling. I wonder, will publishers have to pay to stay at the top of the scroll? Do they have to pay on Steam?
That was one of my initial complaints. You know the best way to get a quick overview of the game? Pull up their Steam page. Multiplayer? Gamepad support? Achievements? DRM? It’s all listed in one quick list.
What you’re saying here in a sense, is that Steam’s success itself, and having so many games on the service, is what’s making it less valuable for companies.
I think much of the success of the Switch indie-wise is predicated on it being new and popular, so there’s no backlog for people to compete with.
I just want the best option for consumers. My impression of EGS so far is that consumers are getting none of the benefit of the lower cut.
No, I don’t think I’m saying that. I’m saying is that if Steam was the only game in town, it has no incentive to make it’s product cheaper or it’s product better. That only happens when a new competitor moves in.
When Steam originally started, there was not a lot of competition in the digital game space, and so Steam and others had to create the product themselves. Epic has copied their model, but are charging developers less to use their platform. I assume its because the the size of the market has exploded and the infrastructure necessary has grown significantly cheaper. But if Epic hadn’t come along, Developers would never have realized that the market efficiencies had improved so much that companies could charge them less for similar (or nearly similar services) because Steam, like a good store, wants to maximize it’s profit.
The main problem with itch.io is that Dragon Tax Return Simulator (Dragon Tax Return Simulator 2015 by walsh9) is sucking all the air out of the market. It’s impossible for any other games to be noticed on there.
They’ve made no such statement, so far as I can see, unless they’ve made a commitment to never increase the percentage or otherwise alter their deals that I have not seen.
All that we really know is that they are willing to dump a ton of money into things from Fortnite right now, in exchange for trying to rapidly grab market share.
I have no idea what they will do once they get market share, either to consumers or developers. A company’s pro-consumer/developer stance is fairly easier to alter once they are in a stronger position with regard to market control. We’ll see where Epic goes with things once it has more leverage.
Right now, it’s just saying and doing whatever is convenient to try to suck in a critical mass of developers.
I guess strictly speaking that’s true, since their multiple widely reported statements on this have been far more specific than a wishy-washy “lot less than 30%”. They’ve explicitly stated it’s planned to be a profitable business at 12% and that the variable costs are currently about 7%.
Which I find it impossible to believe unless they are using some novel, non-GAAP definition of variable. Standard credit card charges alone are 2+%. Does anyone realistically think they can hire programmer and their associated equipment, staff for customer care, refunds, engage sales and host this for 5%? There is not a chance of this and those are all variable costs.
No, that is simply another lie. They are almost certainly counting virtual office space, personnel, servers, hosting fees, etc. as fixed (sunk) costs which is inaccurate. There is always a cost, even if it an opportunity cost. No long-term venture lives off the back of others forever. At some point it has to pay for itself and that includes all of the costs, including all of the real variable costs AND some proper allocation of fixed. That will not happen at 7%.
It has been shown many times that when you restrict digital content to non-preferred channels people will use other methods of acquiring it. Furthermore, when customers support you on their preferred sales channel and you turn your back on them, some will not react kindly. For instance, I bet Phoenix Point is going to be a considerably pirated title. I am not advocating piracy but I have limited sympathy for them as this was a predicted outcome. Give the appearance of turning your back on your customers and they will not support you.
Sorry, “variable” is my word. Epic’s word was “direct”. I think variable is actually correct one to use, given they included “customer service” in the breakdown, and to me that’s a clear example of a variable non-direct cost.
Fixed cost.
Fixed cost.
They say the cost of customer service is 1%-1.5%. That seems plausible. Back of the envelope:
Average game on their store costs $30. (Seems to be the case now, but we don’t yet know what Epic’s policy on running huge Steam-style sales will be.)
That’d mean they’re project $0.30-$0.45 in customer service fees on average. What about the cost:
One sale in 100 will cause a customer support case. (Seems plausible to; me I’ve never contacted Steam support despite buying hundreds of games).’
The average time spent on a support case is five minutes. (I think this is conservative. They’ve got enough volume that they surely have a a script for 99% of the cases)
This is not a highly skilled job. Let’s say $15/hour for pay, $25/hour fully loaded cost. (I’m not that familiar with American labor costs for this kind of work. Does that seem
reasonable?)
That’d be $25 customer service costs per hour / 12 cases per hour * 0.01 cases per game =~ average of $0.02 in customer service per game bought. That’s about 20x too loẉ. So you could multiply my original estimate of the customer service contact rate by 5x and the amount of work per case by 4x, and still not reach the top end of Epic’s estimate.
So that seems reasonable enough.
That’s an interesting one. The common wisdom on indie developer boards is that return rates on Steam should remain under 10%; you’d expect it to be a little lower for Epic since they’re hand-curating the store and thus have a higher average game quality, leading to fewer return on average.
The cost of handling a refund is effectively zero, but leaves them out of pocket for costs like payment processing and bandwidth. But still, it’d mean refunds can only increase whatever estimate we have for the other costs by another 10%, not any more than that.
Not sure what you mean by this?
Storage and compute are going to be too cheap to meter for a business like this. They’re claiming 1% on bandwidth, based on their experience with Fortnite. It would not add up at CDN list prices, but on the other hand they’ve easily got enough volume to not pay list prices.
Man, Epic’s store still seems designed to show the minimum amount of entries possible. I opened it up to see if this game was on the front page. The initial view I got, even when maximized, shows four games. Really? Mobile interfaces show more data. I scrolled to a second page and that increased to a whopping seven… but one of those was the game in question. Games on Steam that get buried immediately still sell hundreds of copies (for what that’s worth) so even with this store interface I’m having a hard time believing “9” or “15” is really true.
