Monday, September 23rd 2019

Exclusivity Costs: EPIC Games Store's Control Cost $10.5 million to Become PC Exclusive

Control is one of the better single player releases of this year already, and has been enough of a success for Remedy and 505 Games to launch a content roadmap stretching all the way to 2020. The game is being served on PC exclusively through the EPIC Games Store, which, besides offering developers higher revenues than Steam, has also launched an all-out campaign to secure high-profile exclusives such as Control and Metro: Exodus (even if some of them are timed exclusives).

Now, an Italian earnings report from 505 games highlights that the developers received a lump, $10.5 million upfront from EPIC; according to the report, "Revenue comes from the computer version of Control (...) The game was released on August 27 but the structure of the marketplace who requested the PC exclusivity has made possible to gain the revenue starting from this quarter." It appears EPIC is offering a safety net for developers in exchange for the exclusivity deals, paying upfront the amount of revenue developers expect to receive from the games' sales throughout the PC platform. In this case, the $10.5 million correspond to a total of 200,000 individual sales of Control. Until that number is achieved, EPIC keeps the full revenue from every sale. Any units sold starting from 200,000, and the revenue is split between the developer and EPIC. It's a win-win, really: EPIC gets more and more traction and publicity on its store, and developers guarantee they get the minimum amount they'd expect to earn by selling the game across the full spectrum of PC marketplaces.
Source: Ars Technica
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119 Comments on Exclusivity Costs: EPIC Games Store's Control Cost $10.5 million to Become PC Exclusive

#76
oxidized
moproblems99, post: 4121961, member: 155919"
I think you need to study the fundamentals of software development seeing as no reasonable statement seems to resonate. Eventually you'll figure out the real world is tough and generally not idealistic.
Again, you're sleepy go to bed.
Posted on Reply
#77
64K
I think 505 Games knew that Control would sell well. They just made it an EGS exclusive to make an extra 10.5 million dollars. Who wouldn't do that? These video game Publishers are a business. They make money any way they can just like every other business.
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#78
oxidized
64K, post: 4122147, member: 148270"
I think 505 Games knew that Control would sell well. They just made it an EGS exclusive to make an extra 10.5 million dollars. Who wouldn't do that? These video game Publishers are a business. They make money any way they can just like every other business.
Sell well? Honestly doesn't look like it sold that well, it sold just like it should on EGS, i still haven't seen anywhere anyone talking about even 1 million copies sold, it's probably still kinda far from that, not that i would trust what Epic says, but not reaching even virtually a million copies sold after 1 month and with all the money spent on it...Ah right i forgot Epic and their briefcases loaded with money to the rescue. Control is pretty good technically, the gameplay is kinda fun and physics are glorious, but overall the game feels like a 6/10 mainly because the story is confusing and poorly structured, who they think they are David Lynch? Stanley Kubrick? Not even in the same galaxy, so if there wasn't Epic saving Remedy's a** it would've gone down just like it did with Quantum Break.
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#79
64K
oxidized, post: 4122305, member: 170038"
Sell well? Honestly doesn't look like it sold that well, it sold just like it should on EGS, i still haven't seen anywhere anyone talking about even 1 million copies sold, it's probably still kinda far from that, not that i would trust what Epic says, but not reaching even virtually a million copies sold after 1 month and with all the money spent on it...Ah right i forgot Epic and their briefcases loaded with money to the rescue. Control is pretty good technically, the gameplay is kinda fun and physics are glorious, but overall the game feels like a 6/10 mainly because the story is confusing and poorly structured, who they think they are David Lynch? Stanley Kubrick? Not even in the same galaxy, so if there wasn't Epic saving Remedy's a** it would've gone down just like it did with Quantum Break.
I think only PCGamer gave a somewhat bad review on the game. The other sites that I saw gave it a good to very good review. This site said it was a good game as well. W1zzard summed it up in his performance review:

"Overall, Borderlands 3 is a highly entertaining shooter that's worth the cost if you liked Borderlands 2 and are willing to overlook that it's an Epic Store exclusive."

https://www.techpowerup.com/review/borderlands-3-benchmark-test-performance-analysis/5.html

I haven't played the game yet but I will probably enjoy it. I'm expecting the game to be a typical Borderlands game and I don't take the story seriously in that type of game.
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#80
moproblems99
64K, post: 4122323, member: 148270"
W1zzard summed it up in his performance review
I think you grabbed the wrong review.
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#81
FordGT90Concept
"I go fast!1!11!1!"
64K, post: 4122147, member: 148270"
I think 505 Games knew that Control would sell well. They just made it an EGS exclusive to make an extra 10.5 million dollars. Who wouldn't do that? These video game Publishers are a business. They make money any way they can just like every other business.
505 Games thought Control was a major risk which is why they went with an exclusivity agreement. It's a new IP and new IPs have an extremely high chance of being a market flop.

There's no "extra" involved with exclusivity contracts as I explained in this thread. The only thing "extra" is that the publisher gets 18% more per copy sold than they do on GOG/Steam. I made a mistake on that thread (17% share instead of 12%) so I'll redo the math and tell you exactly how much "extra" they got versus making those sales on Steam/GOG...

88/100=9,490,000/x
88x=9,490,000*100
88x=949,000,000
x=949,000,000/88
x=‭10,784,090.91

‬Digital Bros/505 Game received approximately 10,784,090.91 euros from EGS for signing the exclusivity contract.

Because of those gross sales happening at EGS with 12% stake, they received 9,490,000 euros for those sales. If those sales were at GOG/Steam, they would have received 7,438,853.64 euros. By making those sales on EGS instead of GOG/Steam, they got 1,941,136.36 euros "extra." As you can clearly see, it's revenue sharing that makes a huge difference, not the exclusivity contract.

Control has for sure sold over 179,765 copies.
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#82
64K
moproblems99, post: 4122326, member: 155919"
I think you grabbed the wrong review.
It's the last line on the 5th page that I linked to.

FordGT90Concept, post: 4122327, member: 60463"
505 Games thought Control was a major risk which is why they went with an exclusivity agreement. It's a new IP and new IPs have an extremely high chance of being a market flop.

There's no "extra" involved with exclusivity contracts as I explained in this thread. The only thing "extra" is that the publisher gets 18% more per copy sold than they do on GOG/Steam. I made a mistake on that thread (17% share instead of 12%) so I'll redo the math and tell you exactly how much "extra" they got versus making those sales on Steam/GOG...

88/100=9,490,000/x
88x=9,490,000*100
88x=949,000,000
x=949,000,000/88
x=‭10,784,090.91

‬Digital Bros/505 Game received approximately 10,784,090.91 euros from EGS for signing the exclusivity contract.

Because of those gross sales happening at EGS with 12% stake, they received 9,490,000 euros for those sales. If those sales were at GOG/Steam, they would have received 7,438,853.64 euros. By making those sales on EGS instead of GOG/Steam, they got 1,941,136.36 euros "extra." As you can clearly see, it's revenue sharing that makes a huge difference, not the exclusivity contract.

Control has for sure sold over 179,765 copies.
We have yet to see what the sales of any of these Epic exclusives will be on Steam. We don't know how many are really holding out until it comes to Steam. I suspect most that wanted the game went ahead and bought it on EGS but it will be interesting to know in 6 months if Valve does make that info known. One thing is obvious though. This hurts Steams sales because people that already have the game aren't going to buy it again when it comes to Steam. If 505 Games gave people the option I think most would have chosen Steam.
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#83
moproblems99
64K, post: 4122348, member: 148270"
It's the last line on the 5th page that I linked to.
Somehow it went from Control to Borderlands 3. I got confused.
Posted on Reply
#84
kapone32
We have yet to see what the sales of any of these Epic exclusives will be on Steam. We don't know how many are really holding out until it comes to Steam. I suspect most that wanted the game went ahead and bought it on EGS but it will be interesting to know in 6 months if Valve does make that info known. One thing is obvious though. This hurts Steams sales because people that already have the game aren't going to buy it again when it comes to Steam. If 505 Games gave people the option I think most would have chosen Steam.[/quote]Based on some quotes in this very thread I think there are a ton of people that will wait for the game to come to Steam.
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#85
FordGT90Concept
"I go fast!1!11!1!"
64K, post: 4122348, member: 148270"
We have yet to see what the sales of any of these Epic exclusives will be on Steam. We don't know how many are really holding out until it comes to Steam. I suspect most that wanted the game went ahead and bought it on EGS but it will be interesting to know in 6 months if Valve does make that info known. One thing is obvious though. This hurts Steams sales because people that already have the game aren't going to buy it again when it comes to Steam. If 505 Games gave people the option I think most would have chosen Steam.
I would propose that the only reason why anyone has even heard of Control is because of the controversy caused by it being an EGS exclusive. It wouldn't have got a quarter the publicity it did without that. Digital Bros/505 Games took the exclusivity contract because they feared it would flop no matter where it was sold.
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#86
64K
kapone32, post: 4122350, member: 181865"
We have yet to see what the sales of any of these Epic exclusives will be on Steam. We don't know how many are really holding out until it comes to Steam. I suspect most that wanted the game went ahead and bought it on EGS but it will be interesting to know in 6 months if Valve does make that info known. One thing is obvious though. This hurts Steams sales because people that already have the game aren't going to buy it again when it comes to Steam. If 505 Games gave people the option I think most would have chosen Steam.


Based on some quotes in this very thread I think there are a ton of people that will wait for the game to come to Steam.
This may be cynical on my part but I think there's a big difference between what some people say on the forums and what they really do. An example is when EA started the Origin Store. People were all over the internet calling for a ban of Origin because they were making some of EA's published games exclusive to the Origin Store. 2 years later and Origin claimed to have over 40 million active accounts.

FordGT90Concept, post: 4122352, member: 60463"
I would propose that the only reason why anyone has even heard of Control is because of the controversy caused by it being an EGS exclusive. It wouldn't have got a quarter the publicity it did without that. Digital Bros/505 Games took the exclusivity contract because they feared it would flop no matter where it was sold.
It got pretty wide spread coverage by the gaming press. I just checked Metacritic and there are 29 reviews listed so far and most of the major sites reviewed it.
Posted on Reply
#87
kapone32
64K, post: 4122359, member: 148270"
This may be cynical on my part but I think there's a big difference between what some people say on the forums and what they really do. An example is when EA started the Origin Store. People were all over the internet calling for a ban of Origin because they were making some of EA's published games exclusive to the Origin Store. 2 years later and Origin claimed to have over 40 million active accounts.
:laugh: You are absolutely right. I could be included in that as I was blasting Steam when I got TW Shogun 2 and had to install Steam to play the game.
Posted on Reply
#88
FordGT90Concept
"I go fast!1!11!1!"
64K, post: 4122359, member: 148270"
It got pretty wide spread coverage by the gaming press. I just checked Metacritic and there are 29 reviews listed so far and most of the major sites reviewed it.
Even games that flop get a lot of reviews. This is proof of nothing.
Posted on Reply
#89
oxidized
64K, post: 4122323, member: 148270"
I think only PCGamer gave a somewhat bad review on the game. The other sites that I saw gave it a good to very good review. This site said it was a good game as well. W1zzard summed it up in his performance review:

"Overall, Borderlands 3 is a highly entertaining shooter that's worth the cost if you liked Borderlands 2 and are willing to overlook that it's an Epic Store exclusive."

https://www.techpowerup.com/review/borderlands-3-benchmark-test-performance-analysis/5.html

I haven't played the game yet but I will probably enjoy it. I'm expecting the game to be a typical Borderlands game and I don't take the story seriously in that type of game.
No idea why you brought up Borderlands, but whatever. Control isn't not a poor game, it's an ok game, but it's heavily weighed down by the story and the characters, it's all confusing and nothing is explained, the ending is a clusterfu** and i guess that even replaying that won't help anyone understand, because the story is just poorly structured and narration is nonexistent. Also saying that many sites gave it a very good review, isn't going to make me change the idea, besides most of those sites have very low standards, and give non sufficient rates only to stuff i wouldn't even dare to rate, ridden with bugs and problems of all sorts.
Posted on Reply
#90
64K
FordGT90Concept, post: 4122371, member: 60463"
Even games that flop get a lot of reviews. This is proof of nothing.
My point was that Control did get a lot of press. Not just because it is an Epic exclusive.
Posted on Reply
#91
FordGT90Concept
"I go fast!1!11!1!"
64K, post: 4122379, member: 148270"
My point was that Control did get a lot of press. Not just because it is an Epic exclusive.
My point is that press coverage doesn't directly translate to sales.

505 Games/Digital Bros signed an exclusivity contract and it paid off. The rest is theory and conjecture.
Posted on Reply
#92
64K
FordGT90Concept, post: 4122394, member: 60463"
My point is that press coverage doesn't directly translate to sales.

505 Games/Digital Bros signed an exclusivity contract and it paid off. The rest is theory and conjecture.
I don't know why you said that no one would have heard about Control if not for being an EGS exclusive. It's getting plenty of reviews by major sites. Here's the latest review I read:

https://arstechnica.com/gaming/2019/08/review-control-is-remedys-best-game-yet-and-a-ray-tracing-masterpiece/

Surely sales will improve with such glowing reviews.
Posted on Reply
#93
FordGT90Concept
"I go fast!1!11!1!"
Just look at TPU:
https://www.techpowerup.com/news-tags/Control

The 2017 E3 announcement for Control got no coverage. What did get coverage? How did the press mostly find out about it? Remedy signing an EGS exclusivity contract in March of 2019. TPU is proof of this--other sites are similar. It wasn't on the radar for most people until EGS controversy put it there.

Websites like TPU and Arstechnica decided to review it because of RTX support. As demonstrated by your link, RTX is keeping Control in the tech press because it's now one of their benchmarking titles.


Edit: Arstechnica is the same way:
https://arstechnica.com/search/?ie=UTF-8&q=Control

Went through 10 pages of results going back to October 25, 2018, and only got four hits, all after the exclusivity contract was announced:
https://arstechnica.com/gaming/2019/09/epic-seems-to-have-paid-10-5-million-for-controls-pc-exclusivity/
https://arstechnica.com/staff/2019/08/dealmaster-1tb-ssds-control-ps4-pros-and-more-in-todays-top-tech-deals/
https://arstechnica.com/gaming/2019/08/review-control-is-remedys-best-game-yet-and-a-ray-tracing-masterpiece/
https://arstechnica.com/gaming/2019/06/control-pre-e3-hands-on-the-modern-day-x-men-video-game-weve-always-wanted/
Posted on Reply
#94
oxidized
FordGT90Concept, post: 4122403, member: 60463"
Just look at TPU:
https://www.techpowerup.com/news-tags/Control

The 2017 E3 announcement for Control got no coverage. What did get coverage? How did the press mostly find out about it? Remedy signing an EGS exclusivity contract in March of 2019. TPU is proof of this--other sites are similar. It wasn't on the radar for most people until EGS controversy put it there.

Websites like TPU and Arstechnica decided to review it because of RTX support. As demonstrated by your link, RTX is keeping Control in the tech press because it's now one of their benchmarking titles.
It's remedy we're talking about here, they're pretty known, they don't need to sign an EGS exclusive to make people talk about them, they teased their P7 project and who follows the industry certainly was hyped for that, i was too, but ofc that was killed after they announced it would be EGS exclusive and it was buried when they showed the story trailer and hinted part of the game's plot.
Posted on Reply
#96
FordGT90Concept
"I go fast!1!11!1!"
By PC Gamers which is literally their job. They cover everything at E3 (literally titled the article "Every game at E3" :laugh:).

Meh, you're trying to dismiss the importance of EGS in generating sales for Control. I've provided plenty of evidence EGS is the reason why Control did well. The fact 505 Games signed an exclusivity deal with EGS demonstrates they weren't confident it would do well to pay off their 7.75 million euro investment in Remedy to finish the game. By signing the deal, 505 Games was guaranteed to make a profit so they could go ahead and invest in another game before Control even launched.

I'm not even sure why this discussion is still continuing.
Posted on Reply
#97
64K
FordGT90Concept, post: 4122426, member: 60463"
By PC Gamers which is literally their job. They cover everything at E3 (literally titled the article "Every game at E3" :laugh:).

Meh, you're trying to dismiss the importance of EGS in generating sales for Control. I've provided plenty of evidence EGS is the reason why Control did well. The fact 505 Games signed an exclusivity deal with EGS demonstrates they weren't confident it would do well to pay off their 7.75 million euro investment in Remedy to finish the game. By signing the deal, 505 Games was guaranteed to make a profit so they could go ahead and invest in another game before Control even launched.
The EGS exclusive controversity probably did add to the game's coverage but I think 505 Games did it for the 10.5 million dollars and not because they feared it would fail. If Valve had offered a cash payment then they probably would have put the game on Steam.

It's just a drop in the bucket for Epic. Fortnite is still a cash cow for them. They had revenue of 2.4 billion dollars in 2018. Sweeney said he can't keep up doing exclusives on EGS but with that kind of success he can probably keep it up for years. I don't know how this is affecting Steam's bottom line because they are a privately held business and they aren't required to make their finances public.
Posted on Reply
#98
moproblems99
64K, post: 4122434, member: 148270"
The EGS exclusive controversity probably did add to the game's coverage but I think 505 Games did it for the 10.5 million dollars and not because they feared it would fail. If Valve had offered a cash payment then they probably would have put the game on Steam.
Come on now, you are way smarter than this reply. If they took the 10 mil guaranteed, why? Because they likely didn't think they would get 10 mil back on it through a normal release.

It didn't matter who offered the money, they would have taken the safety net.
Posted on Reply
#99
FordGT90Concept
"I go fast!1!11!1!"
64K, post: 4122434, member: 148270"
The EGS exclusive controversity probably did add to the game's coverage but I think 505 Games did it for the 10.5 million dollars and not because they feared it would fail. If Valve had offered a cash payment then they probably would have put the game on Steam.
Games usually make well over 90% of their revenue in the first six months. EGS exclusivity is like a laser beam where no exclusivity means casting a wide net (Origin, uPlay, Steam, GOG, Humble Bundle, Fanatical, Windows Store, etc.). It was a huge gamble for them to go with exclusivity because they lose a lot of market exposure by doing so. Even though EGS guarantees 9.49 million euros in sales, casting a wider net could potentially get much, much more. For Control, it's pretty obvious that 505 Games was not confident it would make 8 million euros...

The oddball is Borderlands 3. It's a known quantity and has sold exceptionally well in the past so why did Gearbox pursue exclusivity for that title? The most probable reason is Gearbox couldn't afford to finish the game without taking out a loan or finding some investors. A prepayment from EGS where they don't have to sell a share of the game is much more attractive and less risky. Yes, they still have the risk of not being able to cast a wide net but Gearbox is confident they can get that back through post-release DLCs and a re-release after exclusivity with much of the content baked into the game. The value added will keep the game attractive to buyers outside of EGS.


64K, post: 4122434, member: 148270"
It's just a drop in the bucket for Epic. Fortnite is still a cash cow for them. They had revenue of 2.4 billion dollars in 2018. Sweeney said he can't keep up doing exclusives on EGS but with that kind of success he can probably keep it up for years. I don't know how this is affecting Steam's bottom line because they are a privately held business and they aren't required to make their finances public.
I think every exclusivity contract EGS signed has been win-win. Sweeney is going to keep doing it because it's profitable for everyone. There's a lot more demand for it than he anticipated.

The fact Valve hasn't done anything this year suggests Valve doesn't care.
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#100
64K
They would have only needed to sell 175,000 copies to reach that 10.5 million dollars. If they had released on every store then they surely would have sold at least that many. I know that most games sell on release or shortly thereafter but I don't think it's 90%. Like I was saying before we don't know yet how these EGS exclusives will sell once they hit Steam and possibly GOG and Origin. It could turn out that most of the fuss about waiting for a Steam release might have been just that. A fuss.

Also every year more and more people are buying games either because they just bought a PC or a console or they are old enough now for their parents to allow them to play a game like Control. Some of these people will no doubt by Control.

FordGT90Concept, post: 4122442, member: 60463"
The fact Valve hasn't done anything this year suggests Valve doesn't care.
We don't know how much Valve is losing on sales. Maybe Newell just wants to wait until the exclusives start hitting Steam to see how much money they are losing and also I bet Newell knows that Epic can't keep this up forever and so he doesn't view this as a long term problem for Steam.
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