this post was submitted on 14 Mar 2024
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If I recall correctly valve did lower their cut in the wake of EGS having better terms for devs.
For the first $10m earned it's 30%, then it's 25% until $50m, then it's 20% from then on.
Ok yeah that’s still pretty shitty
Why?
If steam has to do the work to host the game then the majority of effort is going to be getting to the published and available to buy step, which is recouped along with server costs early on. As it scales, the efficiencies kick in and the price gets lowered a bit.
A company keeping 70% of retail price is still a higher cut than they would get for a game on a shelf at a store, and most likely with a far higher number of sales through steam. Plus it is digital so they don't have all the physical distribution costs. For smaller games those additional costs and advertising are going to keep them from being feasible.
Valheim and Palworld wouldn't have been massive successes on store shelves. 30% for visibility and unlimited scaling if the game is more successful than expected is a pretty good deal for the benefits it provides. It actually does buy something, it isn't the mob's cut for pretending to protect your business.
It's the other overheads too, publishing cuts, marketing cuts, QA etc before you get down to the money made for wages etc.
Valve are absolutely in a position to take less, but the service they provide is like no other.
I don't give a fuck about EA/Ubisoft etc getting a smaller cut, but independent developers could absolutely benefit from some sort of program.
Plus the income lets them take care of their employees, and to the best of my understanding it is a pretty good working environment.
Many studios are in a real pinch right now. I don’t know what valve’s overhead costs are but I’d imagine they could afford to kick back some more to devs.
Many studios are in a real pinch because the executives are fucking awful and the first people they punish are the people who would also never get raises because Valve took 12% instead of 20%.
The real difference is for games that don't sell a lot of copies, that don't reach that 20% at $50 million in sales and 25% at $10 million in sales. We're talking about really small games at this point. Even games like Factorio should be around this $50 million in sales point with 3.5 million sales although idk how much for each sale with regional pricing.
We'd honestly be pretty hard-pressed to come up with a game small enough to be in the 30% cut tier but also a game where the cut is what makes or breaks the game instead of market saturation. I agree that Steam should lower the cut they take but I do not believe in the crap Sweeny spits about caring for devs while also making the devs who work for him do so much overtime.
He doesn't mean "devs" he means "profits" that he will never share with devs, he just can't play with your emotions and make you care as the trickle down economics never come around again.
It should be reversed so that small devs don't get shafted for not being able to sell millions of dollars worth of copies of their game. The ones making tens of millions of dollars should be paying more.
Was about to ask what's with all the shilling here but just realized which community this is. Have fun shilling for a mega Corp. Go tell yourselves that 30% cut isn't ridiculous.
Okay, so you say a 30% cut is ridiculous.
But let's move that away from the mega Corp [sic] everyone here is supposedly shilling for. Let's talk about cuts lost to distribution and delivery for a second.
I cannot answer this for a lot of industries, but for example for board games ~7%-9% go to the actual designer. That's 91%-93% that is lost along the way. Even if we take Sweeney's 25% example that the devs get, that's still 3x-3.5x as much as for physical products.
This would indicate that digital distribution is far better than physical for developers making games, as they get a vastly bigger percentage of the money. Within the digital space, we can compare things a little bit, at least for video games.
Digital storefronts seem to roughly all come out at 30%, for which Valve provides more value than say Google or Apple, as they also give you forums, mod integrations, and various dev tool to use to simplify development of your game's modding and multiplayer features.
We also know that consoles are pricier, as you have to pay certification costs for updates on top of the original distribution, and in a way this is true of the mobile stores, too.
Now, don't get me wrong: 30% is a ton of money, and I cannot see where a rich company needs this much money. However, I would argue they're one of the last companies to tackle in improving as far as them not taking excessive money goes, and everyone else (Google, Apple, MS, Sony, even Epic considering how they do fuck all for the 12% cut they take) should get impacted first, plus it's still difficult to argue that digital cut is excessive to begin with comparing the vastly improved developer cut comparing the physical distribution space - as good as I can compare board games vs video games, granted. But I would estimate that the overhead costs of physical sales for video games aren't that different, manufacture, shipping, it's all comparable after all. Video games need less container space, but they also sell for less.
Overall, calling a 30% cut "ridiculous" is patently false. It is the industry standard.
Digital marketplaces use a near monopoly to extort developers into accepting these inflated cuts. I simply will never accept an inflated rate caused by a monopoly as a good thing. Without that near monopoly there is no way they could maintain a 30% cut.
I admit, it sounds high to me - like I said above. But I also got 0 clue, for all I know 80% of that are their costs. 🤷 Lack knowledge to judge that. At least in digital space 70% go to the makers, and usually 20-25% remain at the end, not 2%-8% like with physical goods.
I think the high profit margin on digital goods is almost entirely due to the more efficient distribution of the Internet vs a supply chain, not because steam enabled it. If anyone deserves that cut because of the lower cost of distribution it's the people that created the Internet, and thank God they were publicly funded scientists and not corporations.
Also keep in mind that the infrastructure of the Internet charges a usage fee, not a percentage of profit. If I change $5 for a game on steam vs $60, is steam really doing more work to justify a percentage fee?
To be fair, Steam provides a lot more than "just being a storefront". There's large feature set there in Steamworks which is 'free' for developers to use.
The game developers would probably spend more than 30% of revenue hosting their own game on their own store, so the value is there already.
It would be strange if Valve's cut went up the more money your game made, but it would be better for independent developers.
That tells me you don't understand what they offer or the value of it.
And if you think hosting a CDN across the world is cheap, you have a surprise coming. Ignoring the fact Steam has a large audience and hosting your own game would bring in a lot less revenue than you would through Steam (even with the 30% cut), it's a lot of work to host and market a game online. If there's updates, you have to alert people the game has been updated and direct them to download it again.
Valve Index was successful, Steam link was great, Steam Deck is great, the Steam controller was good in it's own right and it's trackpads are now one of the best features of the Deck. They can experiment with hardware because of the profits, they can afford for them to "flop". Now Linux gaming is a lot better because of Proton too.
Not that I agree with the 30% cut in it's entirety, I think they could subsidise more for small independent developers.
Why should valve, or sony, or Apple, or Google get 30% of the revenue of entire industries for having a download and payment service.
It's extortionate and undeserved. When I play a game I absolutely love, one third of the money for that game didn't go to the people who made it, it went to valves endless bucket of money. It's not right and we should not be defending these extremely high cuts.
Valve runs a profitable Launcher that allows them to try expanding into ventures like the Steam Deck and pushing Linux gaming adoption even if it ends in failures. That extra cash is what allows for businesses to expand beyond only one field.
Otherwise a company is just stuck being just a reseller, and I think gaming space currently is better for Steam Deck and how it's pushed more people to try Linux. And even before the Steam Deck work on Proton helped. Having profits makes it easier to absorb failures and put resources towards stuff like Linux that is niche and may never gain a significant enough adoption.
Like epic even with fortnite can't financially justify supporting Linux anticheat for fortnite, so I guess that's what happens if a company is not taking in enough profits. And Epic store is only being kept afloat because of fortnite, and is losing money.
Also, it's worth pointing out that Gabe seems like a decent guy, and Tim Sweeney is a fucking prick. So I think that's a pretty big difference right there too. Valve has earned respect, Epic has not.
Not just the Steam Deck. It or the Index (or IMO even better the Link and the Controller) are certainly more noticable things they did, but big wins to me are stuff like the integrated modding in Steam, or the ease of user reviews.
And for a newer feature that has become somewhat standard across stores but only because Valve startedi t and they had to keep up, refunding without any questions asked.
When you buy something at the store, did you know that in most cases the company selling probably saw less than half of what you paid? What if they don't have it in stock?
steam provides a ton of benefits at scale that would have probably eaten up more than 30% of the price for the game company, with the ability to instantly scale with no limitation if it picks up in popularity.
If I buy a single player game, more than likely, valve is making entirely profit on that 30%. The cost of the download is below a penny to valve. Yet they still get s third of that companies revenue.
Charge them for the services if you want. They aren't doing thst, they are taking 30% of an industries revenue for doing nearly nothing.
And Valve has other bills to pay, servers to run, employees to pay. Software to develop, did you think all of these great features Steam has were free to develop? Incidentally, remember when Valve released their in house animation software for free when people asked to buy it?
You pay for the game once, whether you download it once or a million times. Valve gets the 30% once, because if you don't pay again, 30% of 0 is still 0. At least that's how percentages worked back in the day, who knows how it works now 🤣🤣
Valve is at least helping out to grow a community ofbgamers that want to have nothing to do with Crapple, Google, Microshit, etc. Look at the cost of a Steam Deck. Now to see if you can buy or assemble a computer with similar specs. Why do you think Asus and Ayaneo have similar devices that are way more expensive? Valve sells the decks at a loss (which they make up for by that 30% on sapes, sure). How would they be able to pull something like that off if they weren't swimming in money? Is 30% disproportionately hefty? Hell yes! But developers and gamers alike get much more out of that cut Valve gets, just Proton development alone is good enough. Can you say the same about Crapple, for example? Valve is a corporation, for profit, like every other corp out there, but at least they do bring innovation (not to be confused with the bullshit that Google and all Tue other crooks want to call that when all they are doing is knocking down walls between them and your money) and value across the board.