Today, Epic announced their new platform for selling games on PC and Mac. The Epic Games Store launches this year with a hand-curated set of games on PC and Mac, before opening up to more games and platforms, including Android in 2019.
Epic plans to compete with Steam by letting developers take home 88% of all revenue. Epic’s 12% cut is considerably less than Valve’s 30% cut of all Steam sales.
The image below, released by Epic, shows how revenue is divided on Steam and the Epic Games Store. Note that the Unity fees do not include up-front licensing costs, so those numbers may be different in reality.
Epic is further incentivizing developers that are using Unreal Engine 4. If you’re using Unreal Engine for your game, “Epic will cover the 5% engine royalty for sales on the Epic Games store, out of Epic’s 12%”. However, you won’t be excluded if you use Unreal 4. Epic states that “all engines are welcome”, including internal engines.
The Support-A-Creator program is another unique feature of the store. The program aims to connect content creators on YouTube and Twitch with developers and allows influencers to earn a small cut of revenue if they’re seen to have encouraged sales of a game. For the first 24 months, Epic Games will cover the first 5% of the Support-A-Creator program to get it off the ground.
“As a developer ourselves, we have always wanted a platform with great economics that connects us directly with our players,” said Epic Games founder and CEO, Tim Sweeney. “Thanks to the success of Fortnite, we now have this and are ready to share it with other developers.”
MCV talked to Epic Games founder and CEO Tim Sweeney about the new store.
“While running Fortnite we learned a lot about the cost of running a digital store on PC. The math is quite simple: we pay around 2.5 per cent to 3.5 per cent for payment processing for major payment methods, less than 1.5 per cent for CDN costs (assuming all games are updated as often as Fortnite), and between 1 and 2 per cent for variable operating and customer support costs.” Sweeney told MCV.
“Fixed costs of developing and supporting the platform become negligible at a large scale. In our analysis, stores charging 30 per cent are marking up their costs by 300 to 400 per cent,” he revealed. “But with developers receiving 88 per cent of revenue and Epic receiving 12 per cent, this store will still be a profitable business for us,” he explained.
Interestingly enough, this news comes just days after Valve announced they were reducing the cut it takes from some games. Steam will now take 25% and 20% of a game’s revenue once they make over $10m and $50m respectively. The announcement seemed to be aimed at bigger publisher seeking to release their games exclusively on their own launchers, like Activision-Blizzard and Bethesda. Naturally, the response from smaller developers was less than enthusiastic.
Big questions for the store include how will Epic curate the store and what games can get on. Talking with Eurogamer Sweeney said that Epic will manually curate the store rather than relying on algorithms or paid ads for placement and discovery. As for what games can make it onto the store, at first, it will be a hand-curated selection but it will open up a lot after that – but precisely how far remains to be seen. In that discussion, they aren’t ready to discuss how developers get on the store and still working on setting that up for the future, but they did share a bit more on releasing a title.
We’ll have an approval process for new developers to go through to release a title. It will mostly focus on the technical side of things and general quality. Except for adult-only content, we don’t plan to curate based on developers’ creative or artistic expression.
That does make one wonder what does quality mean to Epic Games in this case, especially when Steam is overrun with many games of dubious quality, and stores like GOG get complaints about not letting good games onto the storefronts at times. It’s been a conundrum for many digital storefronts and doesn’t appear to be going away.
Steam is a massive platform and it’s hard to imagine Epic will wipe it out completely, but they’re making the right steps to counter Valve’s goliath sales machine. A cut of revenue and the UE 4 licensing fees being waived are sure to be good incentives and for players, you have things like a 14-day no-questions-asked refund policy being enacted.
We’ll find out more about what games are launching with the store at The Game Awards on December 6th.
What do you think? Will you be picking up games from the Epic Games Store from now on? Do you think it’ll be able to compete with Steam? Let us know in the comments!