Steam Stuff - What Has the Digital Distribution Giant Done Lately?


#402

I don’t think saying that Steam is still the best (or perhaps least bad) option and that it isn’t earning its 30% are mutually exclusive options.


#403

Valve earnt their 30% cut by creating steam and managing to overwhelmingly grow and dominate the market. The devs are paying for access more than anything else.

This can’t (or at least shouldn’t) last forever. Epic are smart by leveraging the popularity of Fornite to try and get a foothold in the market. It’s clearly a case of a company artificially lowering their price, if they are able to establish themselves and get a chunk of the market share I bet their fees will go up as well to at least 15% if not 20%+.


#404

Yeah, Valve completely earned their cut over the last decade by building an incredibly robust storefront, features for multiplayer and otherwise which save developers a ton of time, and so many other features.

But that was “earned”, and is not necessarily “continuing to earn”. It’ll be for sure interesting to see if they react to Epic’s and Discord’s moves any time soon.


#405

Being the default place PC gamers go to get their games, I believe Valve could probably get away with charging 40% or even 50%.

But if Valve suddenly raised their fees to say 40%, how many devs and publishers would continue to use them? I mean, if I were getting 75% of my sales from Steam, I’d probably continue to pay it, because to abandon that ship would be almost certain suicide.

But Valve is smart enough to know that they’ve found a number that, for them at least, is a good balance.


#406

One thing people might not realize is that Valve makes most of their money from a tiny number of their biggest sellers, and that the long tail of indie games and lower-selling AAA games don’t actually contribute that much:

The top ~0.5% of games contribute over 50% of revenue, at least for outright purchases (SteamSpy has never been able to track DLC / microtransactions)

So all it takes is a few more big hitters like Ubisoft (Division 2), Rockstar (whenever Red Dead 2 comes out), and Activision (Call of Duty) and they’ll be seriously hurting.


#407

…where “seriously hurting” means, what, only $3 billion instead of $5 billion in revenue?


#408

My time on steam? 97 %. Gog? 2 percent. All others? 1 %.

How has steam done any consumer wrong? Every quarter they have a sale and even A+ titles are sold cheaper?

Though now that I summarize I begin to get a little suspicious about their hegemony…


#409

I think one is trying to give no value to the storefront that was made over years of hard work and convincing players that’s the place to go. There is value in it. Whether it’s 10, 20 or 30%, I don’t know, but it is perfectly reasonable for Valve to ask developers to pay for the value they built, even if it was years before that developer was even a second thought to one person and certainly not a company.


#410

Steam’s value is in its monopoly position. If anything, what is going on makes a good argument for why it would be great for game devs if Steam was broken up somehow.

I do think Steam has acted fairly responsibly with its monopoly power so far, but that can change.

Epic moneyhatting its way into the conversation would be annoying for consumers but not too terrible (mostly having to get a 2nd client), but it would be the best thing for devs, because Valve would have to lower its cut.

I don’t think valve’s community features matter all that much. Ultimately, I think all people want out of a game client is to be able to play their games (and as many as possible on one service) without headaches, everything else is a nice, but unneeded bonus.


#411

Well this requires some of those features you kind of just dismissed. Steam helped remove almost all the complications from modding and multiplayer and hell just gifting a digital game to someone. Those features are the reason there actually are less headaches today.


#412

The thing is they aren’t lowering their price here in the UK. The only place you can ge this game is Epic and at the full £50, places like GMG were doing upwards of 25% off pre order.

It’s like the bad old days, one place to buy and at a premium price. The publisher makes more money due to the 12% and then on top of that makes even more money as the price is kept artifically high as the only place to buy it.

Certainly not a win for the consumer in the UK.


#413

Or anywhere. Even US people could have gotten the game cheaper than it is on Epic Fail Store.


#414

Games are, and have been too cheap for too long. It’s why we ended up with DLCs and loot boxes.


#415

I disagree. If that were the case we would see either fewer games being developed or higher prices for indie games. The only market that has loot boxes and excessive DLC typically are the AAA games. And if AAA games are too expensive then I think that has something to do with the way the development is done in those markets given of the quality we have seen in the indie market with much fewer people and much lower prices.

Other developers namely paradox who engage in many DLCs have changed their business model. They build a platform game from which to continually update rather than launching new games. So their game lifespan is far in excess of a normal product.

But of course your argument may be genre-specific and the genres I typically play do not have loot boxes or excessive DLC.


#416

And mobile and sports games and MOBAs and CCGs and battle royales and pretty much any GAAS. So, most of the market.


#417

I don’t think this is right. It’s simple supply and demand. Digital games pile up in our backlog – in reality, there’s no need for us to buy any games, and it’s only our transient attention span that makes us buy more. Games are a media that’s consumed very slowly, sometimes taking years per game. There are simply too many of them being produced and preserved relative to the consumption rate. Market-wise, this means that many game developers will go destitute without selling, which is precisely what you see. The only thing you can try doing is spreading the wealth a little more, so it’s not just the few top 20 devs who make all the money, but rather the top 100 or the top 500. That’s very hard to do though without strongly intervening in the market.


#418

I find the argument that games are too cheap entirely incorrect from an economic standpoint. If James Cameron create the next Avatar and it costs ten billion dollars to make and he wants to sell tickets at $50 each, when no one comes is it because movies are too cheap? The market bears what it will bear. There have been plenty of opportunities with high-profile games to raise the price of the product. It hasn’t been done for two reasons.

First the price elasticity the market will not bear $80 or $90 games. The marketing departments of these organizations have determined this. It is really that simple. Entertainment in general is a pretty elastic good.

Secondly the game industry learn something unexpected and very valuable from Mobile gaming. That is you can make a lot more money by catering to whales. The mobile market originally priced games much as the PC market continues to do. Then they realized that with a different gaming model free to play that they will make more money in aggregate from just a handful of users.

It really comes down to that. If Madden could be priced at $90 EA would do so but the market will not bear it. And even if they could the DLC and loot boxes would not go away because of the whales. That does not mean the market is under priced, it means the market is priced where it should be. But EA also knows that they can make a lot of money from relatively few users. Hence the excessive DLC and gated content and loot boxes or. player cards. This allows them to maximize their revenue all the while still pricing their product at what the market will allow.


#419

Games are regularly priced at $80 and $90. The Madden Hall of Fame edition is in fact $80.


#420

I think you missed the point. Special editions, collector’s editions and so forth all appeal to the very whales I was speaking of.

The price of games has not really gone up in 30 years. It is because entertainment is very elastic and there are a lot of choices. If there were few games the price would be much higher. This does not mean games are under priced. They are priced at what the market will pay to maximize revenue. Gaming companies learned they can maximize revenue by essentially double-dipping - by charging the market price for the game and also creating paths to gather the money that the whales are willing to spend. Where they get in trouble is when they charge that full price and create so many roadblocks in their game that the non-whale feels cheated or ripped off.

but put to bed the whole notion that games are underpriced. It simply is not true.

PostScript any errors or punctuation issues I a tribute to the voice recognition of my phone speaking with both an accent and a head cold. For all I know the above paragraphs could contain selected works of Shakespeare or be illegible.


#421

Yeah, the idea that companies would skip the enormous and extremely high return-for-effort revenue streams of things like lootboxes and cosmetic DLC (actual content DLC is a mixed bag - the price is much higher for the content than the base game, but it also has much lower uptake) if they could charge another $10-20 up front doesn’t hold water, IMO.