this post was submitted on 14 Mar 2024
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And in the same court case - it was discovered it was not profitable despite their more limited offerings.
I'm not sure what you mean by 'despite' here.
Maybe he meant in the sense that they filtered out the shovelware and asset flips from Epic Games Store (at least until recently) so to make the store look good. That way they're providing hosting only for the games that actually will be downloaded a decent amount of times, avoiding wasting storage on bad/forgotten games.
But hosting is basically a rounding error in the equation of selling games on an online store. The actually significant cost is going to be in developing and maintaining the software powering the online store, and that cost is fixed. This in turn means that having less games in the store is an obvious disadvantage, not an advantage.
....I don't mean to be rude, but you shouldn't speak to things you do not understand or know about. Cloud hosting costs for a large e-commerce site are rather large, definitely variable and not cheap.
Cost of developing software is also not fixed over any meaningful period.
It's also an indefinite cost. It's not like Valve decides to stop hosting a game they've sold after a while. Generally speaking, they store and host it forever even if they never get revenue from sales of it ever again. Of course, I'm sure if the revenue wanes that much that downloads will too, but there's definitely a crossover point where maintenance will start being a permanent negative cashflow. Now multiply that across tens to hundreds of thousands of games and counting. Forever. You kind of have to consider that for the long term when setting your pricing for today since sales cuts are the only revenue you get.
I don't mean to be rude either, but you shouldn't assume that someone doesn't know what they are talking about or understand.
From professional experience I can speak pretty confidently on the subject that staffing opex is almost universally going to supersede cloud opex.
EDIT: I noticed that I was being a bit unclear when saying fixed. What I mean by fixed in this context is that you need to develop the whole e-commerce infrastructure regardless of if you have 1 game or 1000 games - a simplification as you do need to take care to scale well when growing, but it is good enough for the purposes of demonstration. The more games sharing the same e-commerce infrastructure, the less the e-commerce infrastructure costs on a per-transaction basis.
I quite doubt that, infrastructure to provide Terabytes of bandwidth per second isn't cheap, and employing people who are on watch 24/7 and maintain it all, aren't cheap either.
You need to employ relatively fewer people to maintain and remain on-call for a service as you grow it - this is part of the point I'm trying to make. Having fewer games is a disadvantage for Epic, not an advantage.
Hosting is so easy that most companies who do it fail at some point...