Monday, April 8th 2019

"Steam Was Killing PC Gaming", Former Valve Dev Says

The EPIC confrontation with Valve has become a hot topic in recent months, as a veritable Exodus of titles have migrated to the greener, 12%-limited cut that the EPIC Games Store takes from publishers who put their games on the EPIC Games Store digital storefront. Mostly, user reception of EPIC's practice of securing mostly one-year timed exclusivity deals for games that would otherwise also be available through Steam has left a sour taste oin gamers' mouths, as it is seen as a forced way for EPIC to fracture the PC gaming space.

However, a former Valve developer has come forth to say that in his view, Valve's 30% cut was already way behind the times, and was actually "killing PC gaming". The train of thought is that Steam itself changed Valve from a software company to what mostly amounts to a service provider, with Steam serving as a veritable digital money printing machine, that stole focus from games to games publishing, due to higher margins and much lower development costs. It's interesting - and logical - to assume that the reason an Half Life 3 never saw the light of day was because Valve had its revenue stream well secured in Steam. Why invest for a game that could be a flop, when you can just take a 30% cut from other developers' efforts?
Of course, the argument does make some sense. At the same time, it's true that Valve's Steam platform did advance gaming for publishers more than is being let on - a 40% royalty on digitally published games beat the usually 50% take that brick-and-mortar stores usually took in order to reserve shelf space for a new game release. However, as times changed and digital publishing became more commonplace (and game development costs rise and rise), it's understandable that a 30% cut was hitting a new sustainability ceiling for developers. And that's where Richard Geldreich's argument makes more sense: a 12% cut will allow for developers to invest more heavily into their games due to the much reduced revenue cut they have to take into account on projected sales.
That, or they'll invest the same amount of money and take a deeper cut for investors. It could go both ways. Source: @Richard Geldreich's Twitter
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98 Comments on "Steam Was Killing PC Gaming", Former Valve Dev Says

#1
Lightning
So much killing, PC gaming is dead etc.
That's why I went from pirating in my teens to buying games.
Those millions of users must be bots, too.
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#2
64K
Valve is going to have to lower their cut on Steam a little or sit on their thumbs and watch Epic snatch up one AAA exclusive after another. Steam deserves to ask for more because they offer more than Epic right now but not 2.5 times more than Epic charges.
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#3
TheOne
That poll could use a fourth option.
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#4
Agent_D
It boggles my mind that so many gamers think any of the storefront battles are a bad thing. Sure, Steam has had almost two decades to tweak and improve their product, but being stubborn just for stubborn sake and wanting Steam to be a monopoly on the sales side of things because they're too lazy to install another launcher, is just pure willful ignorance. Don't get me wrong, I do like Steam, a lot (5 digit steam ID, it's been a while), for what it does, but unless they get with the times, Steam is going to go down the drain because they got complacent.
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#5
erocker
*
Valve can afford to cut prices/fees/etc. Just kinda strange there's been no news or word from Valve on it. Maybe they really just don't care? Money will do that I suppose.
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#6
TheOne
Aside from VR I'm curious to see if Valve will address anything else over the next few months.
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#7
dicktracy
It's interesting - and logical - to assume that the reason an Half Life 3 never saw the light of day was because Valve had its revenue stream well secured in Steam. Why invest for a game that could be a flop, when you can just take a 30% cut from other developers' efforts?
This is why any true Valve fans would not blindly defend Valve or Steam.
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#8
theoneandonlymrk
erocker, post: 4027072, member: 28484"
Valve can afford to cut prices/fees/etc. Just kinda strange there's been no news or word from Valve on it. Maybe they really just don't care? Money will do that I suppose.
They changed it December 2018 , it's a more variable fee now 30% at worst 20% at best with some exceptions for indies.
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#9
TheOne
You know if Valve hasn't resumed development on HL3 by now, I wouldn't mind seeing some of the old employee's band together to make a new studio and license the IP and develop a sequel.
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#10
silentbogo
Another game to be put on a backburner. Got an entire collection of Borderlands games with most of the DLC on my Steam account.
erocker, post: 4027072, member: 28484"
Valve can afford to cut prices/fees/etc. Just kinda strange there's been no news or word from Valve on it. Maybe they really just don't care? Money will do that I suppose.
That's because Valve knows their value. It's not just userbase, but also expansive feature set that makes it attractive, and their fees justifiable. Until Epic gets at least reviews, community features and achievements, I ain't gonna spend a penny in their store. For devs - no way to ensure a continuing stream of income (standardized DLC distribution, in-game currency/cosmetics sales etc.).
It's been awhile already, and we still have no new features in Epic store. None whatsoever. I don't think it changed at all since it was launched as a storefront for UE-based games many-many moons ago, except now it has lots of in-yo-face pictures and "pre-order now" and "coming soon" all over the place.
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#11
64K
silentbogo, post: 4027090, member: 141875"
Another game to be put on a backburner. Got an entire collection of Borderlands games with most of the DLC on my Steam account.

That's because Valve knows their value. It's not just userbase, but also expansive feature set that makes it attractive, and their fees justifiable. Until Epic gets at least reviews, community features and achievements, I ain't gonna spend a penny in their store. For devs - no way to ensure a continuing stream of income (standardized DLC distribution, in-game currency/cosmetics sales etc.).
It's been awhile already, and we still have no new features in Epic store. None whatsoever. I don't think it changed at all since it was launched as a storefront for UE-based games many-many moons ago, except now it has lots of in-yo-face pictures and "pre-order now" and "coming soon" all over the place.
There have been some improvements since the store launched. Search bar, code redemption improvements, collections and bundles, offline mode, enabled pre-loading and regional pricing. Here is a link to what they are planning and a time frame for added features:

https://trello.com/b/GXLc34hk/epic-games-store-roadmap
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#12
CounterZeus
It's ok, now I can finally play through some of my gigantic backlog on Steam, instead of buying new games :-)
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#13
FordGT90Concept
"I go fast!1!11!1!"
erocker, post: 4027072, member: 28484"
Valve can afford to cut prices/fees/etc. Just kinda strange there's been no news or word from Valve on it. Maybe they really just don't care? Money will do that I suppose.
I suspect there's a technical hurdle. Steam was never designed to have revenue shares other than 30%. When they did make a change last year (I think it was an attempt to stave off AAA EGS exclusives), they ruled out every game that makes less than $10,000,000 which is the vast majority of them. The model for them might be applied as a discount which was something they could quickly patch in.

They likely have to add a new column to their databases which reflect the revenue share Valve keeps, applying a default of 30% to everything. Then they have to update their contracts so new products get an updated rate which is reflected in the databases. Then they have to do a trial run to make sure everything works from start to finish. Then they have to start signing people at the new rate.

The change they made in December really complicated things in the back end because everyone that applies to must still get it. They're probably trying to bake that into the updated code too.

In theory, they should be able to get it done in a week, but in practice, they can't afford any mistakes.
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#14
silentbogo
64K, post: 4027096, member: 148270"
There have been some improvements since the store launched. Search bar, code redemption improvements, collections and bundles, offline mode, enabled pre-loading and regional pricing. Here is a link to what they are planning and a time frame for added features:

https://trello.com/b/GXLc34hk/epic-games-store-roadmap
Those are the type of features that should've been there since the beginning. Just say it out lout "Epic store was missing a search bar", and think how much sense it makes and how much f$%k do you have to give about your own storefront to miss this most basic feature that even a 13y.o. neighbor's kid can implement on a weekend.
Galyonkin has been crawling and data-mining Steam for nearly 4 years, and the end-result is a miserable landing page with a bunch of pictures, and a game client which basically shows you their web front-end after login.

Regarding regional pricing - they are using XSolla, same as steam in most regions, only for Epic it's the only payment system(for now, I guess). Conversion is automatic. Pricing on the storefront is adjusted via a couple of API calls. Transactions are handled exactly the same way for any currency.

They were too lazy to implement it off the start (or too busy negotiating timed exclusives). It's kind of back-ass-ackwards approach to the general "store" notion. Instead of "clients first" and "users must be happy", they go with "suppliers first, users can wait".
Achievements and Shopping cart by 2020? My beard will turn grey by then.
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#15
sam_86314
Wish GOG was on the poll. If their game selection was as big as Steam's, and they had some killer sale, I'd ditch Steam in a heartbeat.
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#16
GoldenX
I just use Pira... I mean GoG, I couldn't care less about Steam Vs Epic.
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#17
Dimi
erocker, post: 4027072, member: 28484"
Valve can afford to cut prices/fees/etc. Just kinda strange there's been no news or word from Valve on it. Maybe they really just don't care? Money will do that I suppose.
I'm not so sure that they can. I don't know if you are aware that Valve provides an unlimited amount of FREE Steam keys to devs/pubs to sell on different storefronts such as Amazon, GMG, HumbleBundle or even G2A. They have a 0% cut on those keys.

I can only imagine the bandwith cost of all those Steam keys sold on other storefronts. They actually lose money on those.
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#18
Mistral
Quick, someone remind me, what cut was brick-and-mortar distributioin taking..?
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#19
64K
silentbogo, post: 4027135, member: 141875"
Those are the type of features that should've been there since the beginning. Just say it out lout "Epic store was missing a search bar", and think how much sense it makes and how much f$%k do you have to give about your own storefront to miss this most basic feature that even a 13y.o. neighbor's kid can implement on a weekend.
Galyonkin has been crawling and data-mining Steam for nearly 4 years, and the end-result is a miserable landing page with a bunch of pictures, and a game client which basically shows you their web front-end after login.

Regarding regional pricing - they are using XSolla, same as steam in most regions, only for Epic it's the only payment system(for now, I guess). Conversion is automatic. Pricing on the storefront is adjusted via a couple of API calls. Transactions are handled exactly the same way for any currency.

They were too lazy to implement it off the start (or too busy negotiating timed exclusives). It's kind of back-ass-ackwards approach to the general "store" notion. Instead of "clients first" and "users must be happy", they go with "suppliers first, users can wait".
Achievements and Shopping cart by 2020? My beard will turn grey by then.
Hell, I was laughing at them too for not even having a Search Bar at launch too. They should have waited until the improvements were a little further along before launching the store. Well, what's done is done. The important thing is whether they will add these promised features that most people want in the near future from their roadmap.

btw I'm not advocating for anyone to sign up for an account on the Epic store right now. I'm certainly not going to until they have proven that they will maintain their store properly. I did the same with Steam, GOG, Origin, Uplay and MS Store when all of those stores launched.
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#20
theoneandonlymrk
Personally I'm ok with all the store's im even ok with exclusive's if the store's made it.
Just not timed exclusive, differentiate with price exclusives , there's a consumer friendly and enticing plan, ill buy no exclusive despite having the epic store installed.
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#21
Prince Valiant
Agent_D, post: 4027071, member: 12941"
It boggles my mind that so many gamers think any of the storefront battles are a bad thing. Sure, Steam has had almost two decades to tweak and improve their product, but being stubborn just for stubborn sake and wanting Steam to be a monopoly on the sales side of things because they're too lazy to install another launcher, is just pure willful ignorance. Don't get me wrong, I do like Steam, a lot (5 digit steam ID, it's been a while), for what it does, but unless they get with the times, Steam is going to go down the drain because they got complacent.
I think people have forgotten what it's like to have options or weren't around when there were options.
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#22
ZeppMan217
Prince Valiant, post: 4027166, member: 170024"
I think people have forgotten what it's like to have options or weren't around when there were options.
What options? You can buy only apples in Store #1 and only oranges in Store #2. You don't have options here. Pick up that can.
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#23
silentbogo
64K, post: 4027163, member: 148270"
btw I'm not advocating for anyone to sign up for an account on the Epic store right now.
I do have an Epic account myself. Signed up that one time Epic promised a new UT. Re-installed it a few months ago just to see what's all the fuss about and score some freebie indie titles in the process, but after rebuilding my rig decided not to re-install it (at least not this decade).

Prince Valiant, post: 4027166, member: 170024"
I think people have forgotten what it's like to have options or weren't around when there were options.
You mean that time when we had GameSpy, when Steam only had a playlist and chat, and when HP and Gateway were pre-installing tencent games, and when most of us did not give a flying f#$k about either of those cause you could buy physical copies? Or that time when every game publisher wanted to have its own distribution platform? I sure don't miss it. Even physical copies went to crap around 2005-ish, when DRM became more invasive and in some cases prevented people from playing even if they have a legit copy (my heart still aches and I have nightmarish flashbacks when I hear a word "Starforce").
Don't get me wrong: competition is good, options are good, good options are even better... but strongarming userbase into committing to a pathetic half-assed platform by paying off timed exclusives is not the right thing for us - consumers. Maybe it's fair[-er] to devs, but we are the ones paying their bills.
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#24
Agent_D
Prince Valiant, post: 4027166, member: 170024"
I think people have forgotten what it's like to have options or weren't around when there were options.
True true. The spirit of Capitalism is dwindling away.

Epic essentially just did what Steam did so long ago; offer a smaller chunk of the profits be taken out. Steam took the ~50% of storefront sales to 30%; now Epic is doing to them what they did back then, they'll either compete, or wither away slowly.

If I were Valve, I'd drop my percentage to match Epic store, then I'd get devs to work on implementing a way for Steam to integrate the launch process for any other storefront launcher natively and offer to charge a nominal fee to the other storefronts for this integration. Not only does that bring the pricing of your service in line with what will become the standard, it also incentivizes the other storefronts to pay for the integration because it will appease the consumers. Valve wins, consumers win (sort of), and they get some good PR for making an attempt at doing something like that. It's not exactly a fair strategy, as any storefront that refused to be a part of it would get lynched hard, so Valve would have a powerful (maybe too powerful) weapon with that strategy.
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#25
Splinterdog
It's about time Steam faced the music and started playing in a more competitive marketplace. They've had it good for too long, but there comes a time when the gravy train runs out of gravy.
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