Then Sweeney adjusts his flight goggles and gets ready for takeoff on one of his pet peeves: the 30% platform fee on Steam. “There was a good case for [such fees] in the early days,” writes Sweeney, “but the scale is now high and operating costs have been driven down, while the churn of new game releases is so fast that the brief marketing or UA value the storefront provides is far disproportionate to the fee.”
Sweeney opines that, if you were to strip away the top 25 selling games on Steam, “I bet Valve made more profit from most of the next 1000 than the developer themselves made.” The maths to get there is 30% to Valve, 30% on marketing, and 15% on servers / engine costs, so “the system takes 75% and that leaves 25% for actually creating the game, worse than the retail distribution economics of the 1990s.”
Sounds valid, it’s a really high cut
“Right now, you assholes are telling the world that the strong and powerful get special terms, while 30% is for the little people,” writes Sweeney. “We’re all in for a prolonged battle if Apple tries to keep their monopoly and 30% by cutting backroom deals with big publishers to keep them quiet. Why not give ALL developers a better deal? What better way is there to convince Apple quickly that their model is now totally untenable?”
Sounds valid, making deals with the big publishers for smaller cut and taking the big cut from smaller publishers. Sounds pretty shit
Yeah but OTOH I can easily see this be discussed away. Economy of scale is very much a thing in physical distribution (so smaller board games have to set aside significantly higher percentages to manufacturing, logistics and marketing), and I lack the business knowledge to know how this does or does not translates to digital distribution.
In other words I cannot judge that, but I have two indicators to suggest it might be a thing:
Physical distribution mirrors it.
Sweeney is an absolutely untrustworthy source, and him so vehemently poking at it suggests it’s a false narrative.
(Plus let’s not forget that Sweeney would take a 105% cut if he could get away with, he himself is a money-greedy bastard)
I think their claims seem credible. I think Steam lowering their take shows that 30% was indeed higher than necessary. And lowering it for those selling shitloads of copies and keeping it high for smaller sellers does sound a bit backwards and scummy.
But both Epic and Valve are businesses. Of course they’re going to be greedy and scummy. I wouldn’t really expect anything else. I just think in this case the specific arguments towards Steam seem valid.
Well
Sounds valid, it’s a really high cut
Sounds valid, making deals with the big publishers for smaller cut and taking the big cut from smaller publishers. Sounds pretty shit
Yeah but OTOH I can easily see this be discussed away. Economy of scale is very much a thing in physical distribution (so smaller board games have to set aside significantly higher percentages to manufacturing, logistics and marketing), and I lack the business knowledge to know how this does or does not translates to digital distribution.
In other words I cannot judge that, but I have two indicators to suggest it might be a thing:
(Plus let’s not forget that Sweeney would take a 105% cut if he could get away with, he himself is a money-greedy bastard)
I think their claims seem credible. I think Steam lowering their take shows that 30% was indeed higher than necessary. And lowering it for those selling shitloads of copies and keeping it high for smaller sellers does sound a bit backwards and scummy.
But both Epic and Valve are businesses. Of course they’re going to be greedy and scummy. I wouldn’t really expect anything else. I just think in this case the specific arguments towards Steam seem valid.