Epic Games is Launching Its Own Digital Game Store in 2019
It’s a wonderful time to be a PC gamer. Valve’s Steam gives you access to thousands upon thousands of games in a one stop shop for digital downloads. That’s on top of the still thriving browser game industry (even seeing a resurgence with all the .IO sites, like slither.io or agar.io), proprietary sellers like Ubisoft’s UPlay or EA’s Origin, and smaller competitors like Itchi.io or Humble Bundle offering DRM-free downloads. Steam is still king because of ease of use and variety of games.
That might change. Epic Games, the company best known right now for Fortnite, is launching its own game store. This might seem like an odd move until you realize that Epic Games also created the Unreal Engine, one of the most popular game development software engines out there. Epic already has its fingers in game sales by virtue of controlling the software people use to build games for Steam and charging royalties for successful games. Why not go all in and try to take a bigger piece of that action?
The real reason an Epic Games Store launching is big news is revenue split for game developers. When you sell your game through an online service like Steam, you are trading the convenience of a large existing platform for a portion of your revenue. Valve, the owners of Steam, take 25% of your revenue unless you sell between $10 and $50 million dollars of your game; then they take 20%. Other storefronts take 30%. Epic Games is only going to take 12%. While there are no guarantees, it is possible that indie developers would be able to charge less for their titles if they don’t have to pad their price point to turn a profit with a 25 or 30% loss. That’s a win for gamers.
Further, and perhaps more exciting, Epic Games is essentially going to incentivize developing with the Unreal Engine. Games built in Unreal will not have to pay Epic Games any royalties for using the engine if they sell on the Epic Games Store. The traditional agreement is 5% of your revenue after your game earns $3000 each quarter of the year. That’s at least $150 more in your pocket as a developer each quarter that would otherwise go to Epic Games if your game is successful on another platform. Epic Games will essentially collect the royalty you would typically owe from the 12% cut they’re taking for selling through their storefront.
Epic Games is also hopping ahead of Steam with clear incentives for streamers and content creators. Steam is in this nebulous spot of sort-of offering a streaming service for gamers. You can broadcast your gameplay to other Steam users. There is no monetization in it yet and the features are limited. Epic Games’ new Support-a-Creator program will continue with the storefront. The current $5 for every 10000 v-bucks spent by a supporter in Fortnite event was clearly a pilot for the more expansive program coming soon. The new storefront is going to launch with a full affiliate program offering accepted partners a percentage of the sales they generate through their content.
Last week, Steam updated its revenue sharing agreement to that 25/75 split. Until then, it was also 30/70. While there is no direct proof that Steam changed its model in anticipation of Epic Game’s announcement, the timing is a little bit too convenient to be totally unrelated.
Epic Games is going to do a controlled launch with a comparatively smaller number of games before expanding to include more games. They are launching with customization features for games listings, content creator support, and a generous revenue model that Steam does not have. Only time will tell if the one-two punch of Fortnite and Unreal Engine can sustain the initial bumps in the road for any new distribution platform, but the Epic Games Store sure sounds promising.
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