Tim Sweeney on EGS' Impact

A lengthy series of tweets from Tim Sweeney looks to address some of the concerns gamers have expressed over Epic Games Store exclusives and other issues:
This question gets to the core of Epic’s strategy for competing with dominant storefronts. We believe exclusives are the only strategy that will change the 70/30 status quo at a large enough scale to permanently affect the whole game industry.

For example, after years of great work by independent stores (excluding big publishers like EA-Activision-Ubi), none seem to have reached 5% of Steam’s scale. Nearly all have more features than Epic; and the ability to discount games is limited by various external pressures.

This leads to the strategy of exclusives which, though unpopular with dedicated Steam gamers, do work, as established by the major publisher storefronts and by the key Epic Games store releases compared to their former Steam revenue projections and their actual console sales.

In judging whether a disruptive move like this is reasonable in gaming, I suggest considering two questions: Is the solution proportionate to the problem it addresses, and are gamers likely benefit from the end goal if it’s ultimately achieved?

The 30% store tax usually exceeds the entire profits of the developer who built the game that’s sold. This is a disastrous situation for developers and publishers alike, so I believe the strategy of exclusives is proportionate to the problem.

If the Epic strategy either succeeds in building a second major storefront for PC games with an 88/12 revenue split, or even just leads other stores to significantly improve their terms, the result will be a major wave of reinvestment in game development and a lowering of costs.

Will the resulting 18% increase in developer and publisher revenue benefit gamers? Such gains are generally split among (1) reinvestment, (2) profit, and (3) price reduction. The more games are competing with each other, the more likely the proceeds are to go to (1) and (3).

So I believe this approach passes the test of ultimately benefitting gamers after game storefronts have rebalanced and developers have reinvested more of their fruits of their labor into creation rather than taxation.

Of course, there are LOTS of challenges along the way, and Epic is fully committed to solving all problems that arise for gamers are for our partners as the Epic Games store grows.
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124.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 04:00
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 04:00
Jun 27, 2019, 04:00
 
grudgebearer wrote on Jun 26, 2019, 17:33:
jdreyer wrote on Jun 26, 2019, 17:17:
[
We've already seen one Steam change: increased revenue sharing by sales numbers. That change doesn't happen without EGS. As EGS improves and gains market share, we'll see further changes. The exclusive thing won't last forever, but will get EGS strong enough so they can compete.

So as a consumer, how are you benefiting from this?

Threads like these and comments like yours are providing me with endless entertainment. Laugh2
'I am' is reportedly the shortest sentence in the English language. Could it be that 'I do' is the longest sentence? - GC
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123.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 02:44
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 02:44
Jun 27, 2019, 02:44
 
Red886 wrote on Jun 27, 2019, 00:55:
there was once a time where you can buy games directly from the game publishers website, and download directly from their own server, for a AMAZING share of 100%.

But Sweeney would get 0% of these sales, no that is a big no-no

or you know, Sweeney could just provide the back end for selling games, and leave the sales, promo and processing of payment to the game's actual publishers. The split would then be 99.5-0.5%.

AMAZING for game developers. AMAZING !

Funny you should bring this up, as Steam does allow this very thing (they take 0% from the sale of keys that are manually activated). Seems a lot of developers feel like it's too much of a hassle to handle it themselves and maximize their profit, though, which is why there are so many re-seller sites. I know Humble Bundle offers a payment processing service that takes something like 10%, too, but you still need your own website for that.
122.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 02:01
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 02:01
Jun 27, 2019, 02:01
 
Wow, when did monopolies become a good thing?

All I know is a lot of idiots refuse to play phenomenal stuff like The Outer Wilds because they are sooky sooks who can't enjoy their games unless they have a white supremacist forum to shitpost on directly baked into the UI of their launcher.

And I love Steam. It's made plenty of money over the last decade and a half for making our amazing digital future a reality. But whatever other bullshit Tim is spewing, he is right that nobody else has really made a dent in Steam's market share playing fair. Let him throw money around at Devs. They can take it or not take it, whatever they need to keep a roof over their kid's heads. Making games is hard, I want them to have options. Exclusivity sucks but so do monopolies and all sorts of other industry shenanigans. It's like the Bible, it's full of insane nonsense but everyone gets hung up on the gays instead of the important shit like why can't we sell our children into slavery or quarantine menstruating women. Selective outrage at it's finest.

Also EGS is way better than Steam was for like what, the first 3 years? It was a garbage piece of bloatware that we installed because of a certain beloved exclusive. Fuck off with the moral highground.
121.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 01:40
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 01:40
Jun 27, 2019, 01:40
 
I'm not sure why you think I needed any of that painstakingly restated...

Look at the parts I quoted from you two.
You're both acknowledging the advance, and that royalties are not paid until the advance is recouped. That's all I was pointing out.

The negotiating part is something else, and I didn't include it in my quote.
Just seems to make sense that if the publisher makes more (due to a more favorable cut from the storefront) theoretically they would recoup that advance faster and thus pay out royalties faster. Right?

Which seems to conflict with this:
The EGS 88/12 split, unless a dev is acting as their own publisher is not guaranteed to aid the developers in any way.
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120.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 01:24
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 01:24
Jun 27, 2019, 01:24
 
Sepharo wrote on Jun 27, 2019, 00:36:
grudgebearer wrote on Jun 27, 2019, 00:30:
CJ_Parker wrote on Jun 26, 2019, 23:47:
Re royalties: Due to the common royalties against advance model, the dev would definitely always benefit from maximized publisher profits because the sooner the publisher breaks even, the sooner the royalties begin to flow.

You don't seem to have a very good understanding of the imbalance of the publisher/developer relationship in the gaming industry.

Most devs are paid up font on royalties in a prepay structure from the publisher, and quite often royalty payments from the actual game sales are nonexistent until the publisher recoups all of their advance on royalties to the developer.

Isn't that what he said?

He's insinuating that royalties after the advance are actually being paid out out on a regular basis, and that the developer is actually in a position to renegotiate a publishing deal that they've agreed to, and taken several million dollars in royalty advancement.

If you are a developer, and take let's say $20 million in royalty advancement on a game, the publisher is going to have to receive at least $20 million and $1 dollars before any additional royalties outside of the original advancement are paid out.

The bad part is royalties are not computed from the retail sale price but on net income, allowing the publisher to recoup all costs before any royalty is computed.

So, for an EGS exlusive game published by Iceberg with a 20% dev royalty sold at $60.00, Epic is going to take 12%, down to $52.8/sale right off the bat. If the publisher advanced you $20 million, spent $50 million on marketing and localization or whatever else they've put into the contract as an expenditure for the game, then the dev will not see that 20% royalty on sales until the game has sold over 1.3 million copies (at the original retail price). It's even worse if there's a retail store or physical goods involved

It only gets more difficult for the developer to see a piece of sales once the price starts dropping on the game. For many games, developers never see royalties other than the original advance, which is why you see developers make a really good game that sells well, and still go out of business. If by chance your game sells so well that you eventually do see royalties when it's selling regularly for $19.99 on Steam, then the dev is going to get a whopping $4.00/sale, and the publisher will still be pocketing 80%.
Violence, naked force, has settled more issues in history than any other factor, and the contrary opinion is wishfull thinking at its worst. Breeds that forget this basic truth have always paid for it with their lives and freedoms.
-Robert Heinlein
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119.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 00:55
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 00:55
Jun 27, 2019, 00:55
 
there was once a time where you can buy games directly from the game publishers website, and download directly from their own server, for a AMAZING share of 100%.

But Sweeney would get 0% of these sales, no that is a big no-no

or you know, Sweeney could just provide the back end for selling games, and leave the sales, promo and processing of payment to the game's actual publishers. The split would then be 99.5-0.5%.

AMAZING for game developers. AMAZING !



118.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 00:36
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 00:36
Jun 27, 2019, 00:36
 
grudgebearer wrote on Jun 27, 2019, 00:30:
CJ_Parker wrote on Jun 26, 2019, 23:47:
Re royalties: Due to the common royalties against advance model, the dev would definitely always benefit from maximized publisher profits because the sooner the publisher breaks even, the sooner the royalties begin to flow.

You don't seem to have a very good understanding of the imbalance of the publisher/developer relationship in the gaming industry.

Most devs are paid up font on royalties in a prepay structure from the publisher, and quite often royalty payments from the actual game sales are nonexistent until the publisher recoups all of their advance on royalties to the developer.

Isn't that what he said?


unrelated to the above:
I dare y'all to total up how many posts in this thread are actually people as upset about EGS as claimed vs the people making that claim and saying stuff like #113 #114 and #116 etc.
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117.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 00:30
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 00:30
Jun 27, 2019, 00:30
 
CJ_Parker wrote on Jun 26, 2019, 23:47:

If you are very short-sighted then you might arrive at such a simple conclusion, yes.

First, the self-publishing devs obviously get the full 88% or even 93% if their game uses the Unreal engine. More income for a self-publishing dev could definitely result in growth, thus in higher quality games and/or allow a dev to maintain their independent status instead of being forced to seek external funding.

The dev could also be a selfish asshole and buy a yacht but that's hardly in Epic's hands to decide. All that Epic can do and *are* doing is create the opportunity for devs to earn more which equals the opportunity for a developer to invest in their future because that is what profits are for in classic 101 economics: Profits -> investment -> growth -> more profit -> more investments -> more growth and so on.

Secondly, in a classic dev/publisher relationship the publisher could increase the budget for games due to a higher income. The publisher could also fund the development of more games in parallel which would help them diversify their risks which is always good, both for the publisher as well as all developers depending on a certain publisher's funding.

Similarly, the developer could negotiate a better deal if they know that the publisher is getting to keep a higher cut. It gives the devs more leverage in negotiations. They could even demand that the publisher at least co-publishes the game on EGS in addition to other storefronts in order to maximize profits which would result in receiving royalties sooner.
Re royalties: Due to the common royalties against advance model, the dev would definitely always benefit from maximized publisher profits because the sooner the publisher breaks even, the sooner the royalties begin to flow.

You don't seem to have a very good understanding of the imbalance of the publisher/developer relationship in the gaming industry.

Most devs are paid up font on royalties in a prepay structure from the publisher, and quite often royalty payments from the actual game sales are nonexistent until the publisher recoups all of their advance on royalties to the developer.

The EGS 88/12 split, unless a dev is acting as their own publisher is not guaranteed to aid the developers in any way. Not even Sweeney has been so stupid as to claim that publishers through their benevolent altruism have restructured their agreements with developers to give them more money because the publisher has a better revenue split on the Epic store. The publisher has literally zero incentive to renegotiate an already in place contract with the developer, it's actual terrible business to do so.

You might want that to be the case, but it's not reality.
Violence, naked force, has settled more issues in history than any other factor, and the contrary opinion is wishfull thinking at its worst. Breeds that forget this basic truth have always paid for it with their lives and freedoms.
-Robert Heinlein
Avatar 17580
116.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 00:17
MattyC
 
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 00:17
Jun 27, 2019, 00:17
 MattyC
 
jdreyer wrote on Jun 26, 2019, 23:50:
Potato Head Jesus, this thread has gone full Star Citizen while I was busy with work.

Sshh. Don’t you know the EGS is a trigger word now? Keep the volume down or you will summon a wrathful D.S.!
Zagreb ebnom zlotdik diev!
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115.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 00:16
Jivaro
 
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 00:16
Jun 27, 2019, 00:16
 Jivaro
 
/*snipped because who really cares after 100+ other comments*/

The exclusives were inevitable and the free games are nice too.
Avatar 55841
114.
 
Re: Tim Sweeney on EGS' Impact
Jun 27, 2019, 00:12
Re: Tim Sweeney on EGS' Impact Jun 27, 2019, 00:12
Jun 27, 2019, 00:12
 
jdreyer wrote on Jun 26, 2019, 23:50:
Potato Head Jesus, this thread has gone full Star Citizen while I was busy with work.

LOL. I was about to comment to about this thread. Its full blown hot. Just shows how many feel about ratface and EGS.
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113.
 
Re: Tim Sweeney on EGS' Impact
Jun 26, 2019, 23:50
Re: Tim Sweeney on EGS' Impact Jun 26, 2019, 23:50
Jun 26, 2019, 23:50
 
Potato Head Jesus, this thread has gone full Star Citizen while I was busy with work.
'I am' is reportedly the shortest sentence in the English language. Could it be that 'I do' is the longest sentence? - GC
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112.
 
Re: Tim Sweeney on EGS' Impact
Jun 26, 2019, 23:47
Re: Tim Sweeney on EGS' Impact Jun 26, 2019, 23:47
Jun 26, 2019, 23:47
 
grudgebearer wrote on Jun 26, 2019, 23:16:
CJ_Parker wrote on Jun 26, 2019, 22:43:

The 88% goes to whoever is officially the "publisher" on the storefront, i.e. the EGS' registered sales partner.

Which would render moot the whargarble argument that EGS exclusivity and the 88/12 split is better for consumers because devs will get more money and will make more and better games with the additional funds. Except in the case where the developer is also the publisher.


If you are very short-sighted then you might arrive at such a simple conclusion, yes.

First, the self-publishing devs obviously get the full 88% or even 93% if their game uses the Unreal engine. More income for a self-publishing dev could definitely result in growth, thus in higher quality games and/or allow a dev to maintain their independent status instead of being forced to seek external funding.

The dev could also be a selfish asshole and buy a yacht but that's hardly in Epic's hands to decide. All that Epic can do and *are* doing is create the opportunity for devs to earn more which equals the opportunity for a developer to invest in their future because that is what profits are for in classic 101 economics: Profits -> investment -> growth -> more profit -> more investments -> more growth and so on.

Secondly, in a classic dev/publisher relationship the publisher could increase the budget for games due to a higher income. The publisher could also fund the development of more games in parallel which would help them diversify their risks which is always good, both for the publisher as well as all developers depending on a certain publisher's funding.

Similarly, the developer could negotiate a better deal if they know that the publisher is getting to keep a higher cut. It gives the devs more leverage in negotiations. They could even demand that the publisher at least co-publishes the game on EGS in addition to other storefronts in order to maximize profits which would result in receiving royalties sooner.
Re royalties: Due to the common royalties against advance model, the dev would definitely always benefit from maximized publisher profits because the sooner the publisher breaks even, the sooner the royalties begin to flow.
111.
 
Re: Tim Sweeney on EGS' Impact
Jun 26, 2019, 23:41
Re: Tim Sweeney on EGS' Impact Jun 26, 2019, 23:41
Jun 26, 2019, 23:41
 
CJ_Parker wrote on Jun 26, 2019, 23:01:
Sepharo wrote on Jun 26, 2019, 22:48:
Another competitive store? Yeah that's a good thing for consumers for sure.
A store that pays to remove choices from the consumers? Nah.

Doesn't seem complicated to me.

You mean a store that makes publishers an exclusivity OFFER, of course.

What is removing the choice from consumers is NOT the offer or the payment per se but the greedy as fuck publishers who ACCEPT the offer, fully well knowing that consumer choice will be (time) limited.

It's all semantics to me. There are plenty of games that are "exclusive" to Steam. Sure Valve does not pay for the exclusivity, but by virtue of their sheer dominance of the digital download market, many publishers just don't go anywhere else. There are plenty of games I'd rather buy on GoG or another platform, but you can only get what you want on Steam …

And you want to tell me THAT'S good for the market?
Avatar 19028
110.
 
Re: Tim Sweeney on EGS' Impact
Jun 26, 2019, 23:16
Re: Tim Sweeney on EGS' Impact Jun 26, 2019, 23:16
Jun 26, 2019, 23:16
 
CJ_Parker wrote on Jun 26, 2019, 22:43:

The 88% goes to whoever is officially the "publisher" on the storefront, i.e. the EGS' registered sales partner.

Which would render moot the whargarble argument that EGS exclusivity and the 88/12 split is better for consumers because devs will get more money and will make more and better games with the additional funds. Except in the case where the developer is also the publisher.

Violence, naked force, has settled more issues in history than any other factor, and the contrary opinion is wishfull thinking at its worst. Breeds that forget this basic truth have always paid for it with their lives and freedoms.
-Robert Heinlein
Avatar 17580
109.
 
Re: Tim Sweeney on EGS' Impact
Jun 26, 2019, 23:15
Re: Tim Sweeney on EGS' Impact Jun 26, 2019, 23:15
Jun 26, 2019, 23:15
 
RedEye9 wrote on Jun 26, 2019, 23:07:
Acleacius wrote on Jun 26, 2019, 23:04:
Tag your it, next person up, bring more Ahoy and Popcorn !
I'm waiting on the "dumb invalid" guy's response. Hopefully it will be a classic of epic proportions.

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‘What is this bullshit that you people are doing?’
The worst criminal in human history, undeniably.
Beating and Gassing Americans for Jesus!
Ain't no tweetin, in jail jammies!
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108.
 
Re: Tim Sweeney on EGS' Impact
Jun 26, 2019, 23:13
Re: Tim Sweeney on EGS' Impact Jun 26, 2019, 23:13
Jun 26, 2019, 23:13
 
CJ_Parker wrote on Jun 26, 2019, 23:01:
Sepharo wrote on Jun 26, 2019, 22:48:
Another competitive store? Yeah that's a good thing for consumers for sure.
A store that pays to remove choices from the consumers? Nah.

Doesn't seem complicated to me.

You mean a store that makes publishers an exclusivity OFFER, of course.

What is removing the choice from consumers is NOT the offer or the payment per se but the greedy as fuck publishers who ACCEPT the offer, fully well knowing that consumer choice will be (time) limited.

It is 100% the publisher's fault. THEY are the only ones who determine when, where, how, why a product of theirs gets published. If THEY take money from anyone for limited exclusivity then that's on them and their fucking unlimited greed. THEY are making the final anti-consumer decision, not EGS. THEY could say 'no' but they don't.

Yeah, as I said the last time someone wanted to point this out to me... I don't exclude them from the blame.
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107.
 
Re: Tim Sweeney on EGS' Impact
Jun 26, 2019, 23:12
Dev
Re: Tim Sweeney on EGS' Impact Jun 26, 2019, 23:12
Jun 26, 2019, 23:12
Dev
 
Price reduction?
HAHAHAAHAAHAAHAH.
Exactly ONE game has done that.
And most publishers/developers aren't going to, because either they have contracts signed that they can't differ prices between stores, or they won't want to cannibalize sales that way.
106.
 
Re: Tim Sweeney on EGS' Impact
Jun 26, 2019, 23:07
Re: Tim Sweeney on EGS' Impact Jun 26, 2019, 23:07
Jun 26, 2019, 23:07
 
Acleacius wrote on Jun 26, 2019, 23:04:
Tag your it, next person up, bring more Ahoy and Popcorn !
I'm waiting on the "dumb invalid" guy's response. Hopefully it will be a classic of epic proportions.

- I refer to it as BC, Before Corona, and AD, After Disaster. -
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105.
 
Re: Tim Sweeney on EGS' Impact
Jun 26, 2019, 23:04
Re: Tim Sweeney on EGS' Impact Jun 26, 2019, 23:04
Jun 26, 2019, 23:04
 
Tag your it, next person up, bring more Ahoy and Popcorn !
‘What is this bullshit that you people are doing?’
The worst criminal in human history, undeniably.
Beating and Gassing Americans for Jesus!
Ain't no tweetin, in jail jammies!
Avatar 1858
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